For furniture manufacturers, construction companies and signage designers, the best way to reduce material expenses is buying PVC boards at the factory. However, to save money, one need not look just for the least price per unit. The key is knowing how factory-direct procurement can benefit you, from the volume discounts you can get, to optimizing logistics to the relationships that can provide you with consistent quality.
Volume Discounts and Tiered Pricing
The biggest first economy benefit to purchasing direct from the factory is the ability to take advantage of tiered pricing options. The higher the order size, the lower the unit cost. Many vendors also lower their prices as orders grow - for example, orders for below 10 tonnes might be US$0.71 per kg, but fall to US$0.69 if over 100 tonnes. Prices can be lowered down to US$ 0.40 per kg when purchasing more than 1000kg from big producers.
The important thing to consider when assessing these levels is to take into account the volume discounts with the costs of holding inventory. The cost savings of 5%, on a 20 tonne order, might be worth US$1,000, but the money invested in inventory storage and working capital could be lost. For customers who place their orders on a regular basis, it may make more sense to ship them through the quarter.
Some suppliers will provide mixed container pricing, where buyers can mix different thicknesses, colors, products etc. in a single container to achieve a volume. This flexibility can prove beneficial especially for those buyers that are requesting several PVC board types.
Factory-Direct Pricing and MOQ Negotiation
Factory-direct procurement means that you won't have to pay the distributor for the mark-up that is placed on material costs. To run the production in an efficient way, manufactures set their MOQ, generally at around 500 pieces or 3 tonnes per item (with normal color). MOQ may be raised up to 6 ton per specification if a customized color is needed or special finishes such as laminated. Special circumstance MOQ can be negotiated when buyers cannot accept our standard MOQs. Smaller trial order placed by the supplier may be accepted for building of a relationship, with the understanding that the volume will increase. Some manufactures do provide free sample programmes so that buyers can check the quality before making their bulk orders.
Take payment terms into account when negotiating. Normally the supplier will ask for 30% deposit and the remaining 70% before the goods are shipped. Prices may be further negotiated with buyers whose terms are more favorable, such as 100% letter of credit at sight.
Logistics Optimisation and Shipping Strategy
However, with careful management, shipping costs can negate the savings from factory-direct. Major ports like Shanghai, Ningbo and Qingdao have most Chinese suppliers who trade under FOB. There is freight, insurance and inland transportation, the costs of which depend on destination, container, and shipping season.
Full container load (FCL) is usually the most cost-effective option for shipping when sending goods in full truckload quantities. For buyers who do not buy in container loads, however, less-than-container load (LCL) services are available which cost more and take more time. Some of the manufacturers have logistics support, or have preferred freight forwarders that can make the logistics process simple and low cost.
Standard orders are usually delivered from Chinese factories in 7 to 15 days after the deposit and custom production in 20 to 35 days after the deposit. Samples are expected within 7 to 10 days when sent by air freight and 15 to 25 days for bulk orders by sea freight depending on the destination.
Supplier Selection and Quality Assurance
Factory direct benefit is useless unless your product is consistent in quality. In the long run the cheapest way to procure items is to use a supplier that has excellent quality systems and an excellent track record. Look for such markers as an ISO 9001 certificate, 3rd party SGS test reports and on time delivery of over 94%. Always get samples in to physically check them out for dimensions surface finish and material uniformity before you proceed to larger quantities. Free small sample (shipping collected) or 50–100% discount on the unit price for full size samples are available from some suppliers, and credited to subsequent orders. An easy quality test to avoid costly rejections: measure thickness at several points on a sample sheet. There are reputable manufacturers who have dimensional tolerance of ±0.2mm. Require original test reports of the raw material to ensure the use of virgin PVC resin instead of recycling one or recycle PVC resin will not have negative effects on hardness, usability.
19 years of fully in industry, 10 years of exportation to all around the world, JIAYING (PLUSWIN) is professional for PVC board production. With ISO certified production, factory direct competitive price and quality assurance, JIAYING (PLUSWIN) enables the B2B customer to achieve cost reduction without sacrificing quality. Feel free to contact us for a discussion on your requirements of bulk PVC board.