How You Can Cut the Cost of Product Materials

If your business is concerned with making one or more products, then no matter how efficiently you think you’re running your operation, chances are you could cut the cost of manufacturing your products even further, and you could do this WITHOUT cutting the quality of your goods. Here are just some of the ways you make be able to cut the cost of essential product materials: 

Switch to Lower Cost Materials 

This one is obvious, but it’s worth mentioning because so many businesses start using certain materials and then stick with them no matter what. This isn’t a good way to do things because newer and more affordable materials are becoming available all the time in most industries, and even when that’s not the case, market prices in one place or at one business may be much cheaper than another, allowing you to purchase the same quality for less. 

Use Automation 

Automating as many of your manufacturing processes as possible is the perfect way to cut down on costs because it will make your business more productive. If you can’t afford to invest in automated equipment yourself, many manufacturing companies like Proto Plastics can help you to cut the cost of production by giving you access to automated equipment, which will do the jobs you require in a fraction of the time, pumping out perfectly molded plastics that will stand up to your high standards. 

Do Away with ‘Pointless’ Features 

Another thing you might want to consider doing, if you want to make your business more frugal is getting rid of unnecessary features, which require customization, and which will typically cost more to produce than standard mass-produced goods. Obviously, you should only consider doing this if those extra features aren’t a key reason why your products are purchased, so it’s worth doing a little market research before putting this option into action. 

Negotiate With Everyone 

Image source If your business is even moderately successful and you’re ordering a lot of supplies, you are in a good position to negotiate a better deal with suppliers and manufacturers, who don’t want to lose your business. You’d be surprised at how much of a discount you can get when you threaten to go elsewhere, especially now when the economy is still on shaky ground and companies are looking to retain as many clients as possible. 

Buy Only What You Need 

Instead of bulk buying for any potential future sales, consider switching to a ‘just in time’ model, by which you only purchase the supplies you need for the immediate future. Even big companies like Toyota do this, and it stops them from buying supplies they don’t need, often leads to lower prices, when the market changes and means that less time, effort and money has to be invested in storing and maintaining supplies. 

Buy from Other Businesses 

More often than you would think, other businesses and vendors will need to get rid of supplies quickly, either because they need the money, they’ve over ordered and have nowhere to store things, or most commonly because they’re going out of business. You can make huge savings by buying what you need from them rather than your traditional buyers, so it is always worth keeping a close eye on what is going in in your niche if you want to cut the cost of manufacturing your products. 

Cost Cutting Conclusion

Is your company product-based? How do you cut the costs of essential materials? Tweet @MikeSchiemer with your thoughts and experiences cutting company costs creatively!

I hope you enjoyed this article about how you can reduce the business cost of production materials and cut overall overhead.

Interested in more articles about business budgeting?

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Published by Michael J Schiemer
Owner of Bootstrap Business
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