Seven levers that reduce landed cost without squeezing the supplier
Beating up a factory on unit price is the least effective lever available, and the one most likely to come back as a quality problem.
1. Consolidate
Multiple LCL shipments carry duplicated documentation, handling and clearance charges. Consolidating several vendors into one FCL is frequently the single largest saving available to a multi-vendor buyer, and it costs the supplier nothing.
2. Fix the packing
Cartons sized to the pallet and the container rather than to the product save real money on every shipment. Paying to ship air is common and almost always invisible on the invoice.
3. Check the HS classification
Misclassification costs duty on every single shipment, permanently. It is worth having the classification reviewed properly once, the saving compounds and it is entirely legitimate.
4. Use preferential origin
Trade agreements can eliminate duty entirely on qualifying goods, but only if the origin documentation is issued correctly. Buyers leave this on the table constantly because the certificate was not requested at order stage.
5. Move the order quantity to a break point
Most factories price in bands tied to a batch size, a coil width or a mould run. Increasing an order by a small percentage to reach the next break often reduces unit cost by considerably more than the extra quantity costs to hold.
6. Buy on the right Incoterm
If you have better freight rates than your supplier, buy FOB and control the freight. If you do not, buy CIF and stop paying a margin on a service you are not managing well.
7. Get the specification right the first time
Rework, rejection, air freight to recover a delay and emergency substitution dwarf any unit price saving. Time spent writing a precise specification is the highest-return hour in the whole procurement cycle.
Next step
Send us a specification. Get a real quotation.
Drawings, a bill of quantities, a line list or a written brief, whatever you have. We come back with a costed, line-by-line offer, and tell you plainly if anything in it will not work.