Going offshore when sourcing products may seem like the sensible choice, but purchases from overseas suppliers can present a false economy. We’ve heard tell of boatbuilders lamenting the cost of sourcing equipment from New Zealand, labouring under the impression that buying offshore saves money in the production process.
“Buying offshore does look attractive from certain angles but all aspects need to be considered to make the correct decision” says Mike Harris, Chairman of the NZ Marine Suppliers Group and MD of Lighthouse Marine Equipment.
When completing a costing analysis there are a number of factors that need to be considered and addressed before you commit to the purchase.
1) What is the actual rate you will pay if you complete the transaction? Exchange rates vary and using the bank’s best-looking rate is often the price they pay you for currency returning rather than for remitting to a foreign bank to pay for goods or services.
2) Freight costs and internal shipping costs can be equal to the value of the sea and or airfreight costs if factory location is remote.
3) Unless costs are quoted door- to-door there are local importing charges, GST, and local transport charges that need to be accounted for in the costing exercise.
4) Consider the costs that will be incurred if the order isn’t complete due to misunderstanding with supplier.
5) Consider who will covers costs of commissioning if equipment is not performing to specification.
6) If product is faulty or not fit
for application, who will support the products and reimburse the customer?
Most reputable importers and distributors have a vested interest in supplying NZ customers competitively priced goods and services.
The cost of stock, warehousing, spare parts and service technicians
all add to the cost of goods available from a NZ supplier but all customers are then protected by the NZ Sales of Goods Act and Consumer Guarantees Act which protects NZ businesses and consumers.
Any goods or services purchased in NZ are covered by warranty from the manufacturer via NZ distributor. Any issues, such as product failure or manufacturing defects, will be covered by the local supplier. If not, then the customer has a legitimate course of action to follow through the NZ Marine Industry Association, or the NZ legal system. Not so with goods sourced directly.
When you buy from a NZ distributor and reseller you have the right to negotiate pricing based on requirement, volume and delivery. Most companies are happy to help purchasers exercise this right as all have had long associations with other member companies and want the opportunity to work through correct channels where ever possible.
The NZ Marine Industry Association’s code of ethics has been designed to make the most of New Zealand’s reputation for quality products, and straightforward transactions. Dealing with members following these ethics allows you to expect:
Clearly defined, in writing, prices of any goods or services to be supplied, as well as a written copy passed to the purchaser before undertaking the sale or service.
Having a satisfactory guarantee policy, promptly and equitably remedying any genuine cause for dissatisfaction and honouring to the fullest all guarantees or undertakings given as to quality or service.
To make information available to customers on safe handling, usage and enjoyment of boating products sold, and draw the customer’.s attention to the legal requirements of safe boating.