Today’s buyers are smart. The reason why they are in that position is because they are capable of protecting the interests of their company by effectively researching a product and avoiding any future hassle.
As a disclaimer, the manufacturers are going to hate me for telling the truth but that’s the journey we are on at Clarity - giving you market intelligence...
Having sat on both sides of the fence as a sales manager for a manufacturer of products and a sales manager for a distributor of products - There is an argument for both sides.
When I was in the role of distributing products, we used to ‘pretend’ that we were the manufacturer of the products, we branded everything as our own. We thought that our biggest competition was the big manufacturers of the product, but it actually wasn’t - our competition was the distributors of the big manufacturers’ products.
In this article, you will learn more about the differences between manufacturers and distributors and find out whether Clarity manufacture their own industrial barriers or not.
A manufacturer has 3 types of customers: an end user, a distributor for the brand and an own label distributor. When I was a manufacturer, we could sell products at the lowest possible pricing, but we didn’t. Our profit margins ranged from <20% right up to 90% and sometimes even higher. As a manufacturer - we got what we could get away with - sounds bad but that’s the truth.
When selling to distributors - they have market knowledge and know what industry base rates are. As such you would struggle to sell a core product for a high margin to a distributor. Some distributors would be paying less than a 20% margin for the products.
When selling direct to an end user however, we had to protect the brand image of a high-quality product so had to keep the margins high. We did this to avoid having a distributor come in and ‘Chop our legs off’, by offering the same customer, the same product for a lot cheaper price.
A distributor knows what the market price of the products are, otherwise, they wouldn’t exist. There could be times when a manufacturer offers a price to an end-user and slashes the prices to take the account, however, price is never the only reason why people would switch suppliers. If a manufacturer could offer the service of a distributor - Amazon would not exist, distributors would not exist.
Distributors are most likely to deliver a fair price for their services because they know there is a ceiling to how high they can quote - that ceiling is usually below the manufacturers list price because they know most people like the idea of buying direct from the manufacturer, so they offer the same products as the manufacturer at a lower price! Mad, isn’t it?
A perfect example of this is VW and the diesel gate scandal, where emissions tests were cheated. Read more about that here.
In the barrier industry - manufacturers are claiming their products are made from ‘Technopolymer’. What is that?! It doesn’t exist - at least my professors at Sheffield university didn’t discuss it at any point while I was there. ‘Advanced Polymer technology’ sounds far more sophisticated than HDPE, doesn’t it?
As a manufacturer, we had test equipment to make sure our products were amazing. If there was ever a failure we could ‘prove’ the problem to be the fault of the customer, not our product.
So why do manufacturers try to mislead customers? You could call it marketing. I would class this as bad marketing, but it is simply an attempt to divert your gaze from facts and data. They don’t want you to know that what you are actually buying is in fact a standard product and you are quite within your rights to get a fair price from elsewhere.
Who is paying for all the heavy marketing and the test equipment? You are when you buy their products. If something seems too good to be true - it probably is.
Typically, a new customer would be given sky-high pricing as you can always come down but never go up. However, when you get a buyer with market intelligence – they are hard work because they know what they are getting, and you cannot mislead them into paying extortionate pricing for a standard product.
Once someone has called BS on the marketing department and stated what they actually need, the hyper-inflated pricing structure is dead in the water.
Here are some of the tricks of the trade to make you pay more:
Let’s say a product consistently hits a strength figure of 20, normally you could use that as your test result, but let’s say you got a random wild result of 30, an unethical company would use that as the data figure. Yes, it actually happens.
A buyer with market intelligence would identify a universally recognised test method and insist on compliance with that.
So, to conclude, Clarity do not manufacture barriers for this reason; we like to offer our clients a fair price with the project management capabilities that manufacturers do not have. Our advantage as a distributor, is that we can offer multiple different products at a fair price and install them in your factory all in one go, ultimately saving you time and money.
If you want to find out more about our barriers, click here, or if you would like pricing on a factory fit out project for your company, click here.