Page 46 - The Inside Scoop Archive

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To: Inside Scoop Reader

Do You Know the Difference Between Cost and Price?

A hundred years ago when I first started out in sales with Procter & Gamble selling Frymax shortening, I used to remind
people that the price you pay is not what it costs to use. That is true whether you're buying frying shortening or stretch
film. It is important to recognize the "cost points" in a product that contribute to, or take away from its value. Low price
is never a value if the product ends up costing more to use than another product that might have had a higher initial buy
price.
Many buyers of stretch film have a problem in never getting past the "what is your price per pound?" question. That is an
interesting question, but it has absolutely nothing to do with "what will it cost me to use your product?". One of my
salesmen used to say that our product was cheaper to use at twice the price, and in at least some cases he was right. Let
me give you an illustration:

The film on the left costs $ 0.26 per pound less to buy and costs 25%
MORE to Use. Both will give you the same results in your distribution center
or plant.

Would you rather save $ 0.26 per pound or reduce the cost to use this product by 25% ?

Here are some things to consider when buying stretch film for your distribution center or plant.

l Can I buy a new technology stretch film that is thinner but will give me the same performance that I have been
getting with a thicker film? Why would I want to buy a thicker stretch film when I can buy a thinner film that is
stronger for a much lower price per foot?
l Will my new technology thinner machine film allow me to use a higher pre-stretch gear on my machine and thus give
me a much better yield from my film than I have been able to get from my traditional thicker gauge machine film?
l Will my workers benefit from the lighter weight rolls of the new technology thinner films as the rolls can be up to
3.5 lbs less in weight for them to have to carry around the pallet as they wrap?
l As the new technology thinner stretch films are stronger and tougher, not just thinner, it will result in less film
breaks and better wrapped pallets. This equals increased productivity.

Remember, the price you pay ( What is your price per pound? ) is not what it costs to use. New Technology, thinner films,
that are tougher and stronger than conventional full gauge films, cost less to use. Maybe even at twice the price!

file://C:\Documents and Settings\William Jackson\Local Settings\Temp\tmpB3.htm 11/29/2006