Supplier

[Ghazi]

Hi,

If your supplier won't give you a breakdown of the costs to granular level would you still use them?

I have a potential supplier in China who is willing to meet my cost that I need for my product but won't divulge in this cost in greater detail. This is bothering me as I can't account for my costs to the level I would like.

 

[The Byre]

If you are a huge company like Aldi buying staggering amounts for shops on every continent and you need to know if this supplier is still going to be there next year and to do that, you must look into their books, then you would regard knowing their costs down to 'granular' level, as you put it, would be just a part of normal due diligence.

If you are an SME, then some larger company is hardly likely to want you poking about in their costing calculations!

 

[Ghazi]

Hi, They will be sourcing and assembling components to make my product. My level of granularity is based around each cost of the part and their labour charge to see what it costs to make the final product they have quoted.

 

[J Arnold]

Your happy with your cost. Why would they divulge what their costs are?

 

[The Byre]

OK, so imagine that you are buying electronics boards for $10 each and housings for $15 and get somebody in the UK to put the one into the other for about $1 each. You sell these on-line for £49.98 and somebody wants to know what it costs to build, do you tell them?

"Yer, they only cost me £16 to put together! The rest is all overheads, fixed costs and profit!"

You would no more do that, than Honda would tell you that a £30,000 Accord costs under £4,000 (marginal cost) to build!