A failure to properly purchase your APU can cost you thousands of dollars and hours of your time.
Between the financials, the POs, the chasing, the follow-up and all of the small details, there’s a lot to processing your APU purchases.
So what’s the best way to process your next APU?
There's a lot of debate, sometimes confusion, about whether to focus on total cost or price.
If you choose price over total cost, you leave out important factors like delays, lead time, and financial risk. I’ve read stories of someone wiring $300,000 for an engine they never received. All of these risks play a factor when you focus only on price.
And then, really think about after-purchase support.
Will there be any? If not, what will it cost to get the support you need? And how much is it worth to have the peace of mind that your partner will actually deliver?
Let’s consider two example APU purchases:
APU A comes from an inexpensive provider you haven’t dealt with before. Their price is $300,000, and shipping costs $10,000. There’s stress and anxiety over whether they’ll actually deliver, and when they’re late, you stress even more. Maybe you spend $5,000 or more following up and chasing the provider, or worrying that they’ll never ship your APU. When they do ship, you find out that support isn’t included and costs up to $15,000 in additional components. Suddenly, you find that the total cost has jumped to as much as $330,000.
APU B comes from a trusted material partner. Their price is a little higher, at $310,000, but they reliably and frequently ship, so their volume discounts make shipping only $8,000. Because they’re well-known and respected in the industry, it’s not necessary to follow up with them regularly. You know that what they say, they will do. They provide after-purchase support, grease, components and other necessities. All said and done, APU B comes in with a total cost of $318,000.
Which one is more expensive?
When you're processing, you want to focus on saving total costs, not just price. Outsource with trust to a partner that can get you an APU with all the accessories and support that you need, because the goal isn't to get the cheapest price, it's to get the best total cost and value for your time.
As you begin processing your APU purchase, it’s imperative you prepare the logistics beforehand.
Where are you located? Do you have a freight forwarder you trust, and that you’ve used before? What’s the estimated freight cost, and have you accounted for surprise delays or expenses? Have you coordinated with your forwarder beforehand?
It’s essential to maintain an understanding of the logistics to help you not make last-minute decisions that could end up costing you even more time and money.
As you answer these questions and get clear on the logistical strategy, you’ll adopt, you'll want to...
Consolidate as much material as you can on one order. There’s a direct correlation of consolidating and a reduction in total purchasing cost.
Consolidation takes us back to the price versus total cost concept.
Your APU order might have ten or 15 additional components, expendables and consumables all in the mix.
Imagine how costly it would be to order that material from all over the world and have it shipped individually.
If you consolidate, you reduce total costs. And, when you lower overall cost, your operation is happy. A win/win.
Purchase all necessary accessories.
What are additional roadable you need to install the APU? What expendables and consumables will you need? Do you need anything extra, like renewables, expendables, consumables, grease or gaskets?
Planning ahead gives you the time and perspective to purchase all the necessary accessories at once.
Getting them at once lets you consolidate and save on total processing costs. By ordering everything together, you can drive down total cost and regain hours of you and your team's time.
Outsource many of your processing tasks.
You want to outsource as much of the material demand as you need to a trusted advisor.
The goal of your trusted material partner is to have all of the accessories you need, which you can then consolidate to save you time, money and stress.
Outsourcing to such a partner helps you drive down total cost and, when processing, that’s the goal.
The objective isn’t to get the cheapest price, but to get the best total cost and the best value for your time.
That’s where you need to focus your attention when purchasing your next APU.