Why do manufacturers pinch pennies so badly?

[Brian Elfert]

If a manufacturer sells a trailer at wholesale for $3,000 or so, would it hurt them to spend an extra dollar or two on paint and actually paint the whole frame? Are they that hard up for money? I would never buy a new trailer from these guys after rebuilding one from the ground up.

I bought a used trailer that I knew had rust issues. After tearing the whole trailer apart I figured out they only painted the parts of the frame the customer could see. The parts of the frame inside the wall are not painted and have rust on them too.

I suppose when you manufacture 10,000 trailers a year a penny here and a dollar there adds up, but if you want a customer down the road you can't do things too cheap.

[Steve Peterson]

Everyone talks about how skipping the paint on 10000 trailers adds up to a lot of savings. I don't understand the logic. My thinking is that it upsets 10000 people, many of them needing to tear the whole thing apart to fix the problem. It may have saved $1 per trailer, but adding the paint would easily add $10 in value.

Of course, not many people seem to consider quality over cost anymore. Notice how busy Harbor Freight or Walmart are most of the time.

Steve

[Greg Peterson]

What's worse, some unhappy consumers or unhappy investors?

Business today is geared towards keeping the investors happy first.

[Brian Elfert]

The thing is most customers would never see the part of the frame that isn't painted. Most customers would just buy another trailer when they needed a larger one or the current one wore out.

The trailer I bought has seen so much salty road spray that even the aluminum skin is corroded. I have had to remove the aluminum skin and now I see that the frame isn't painted underneath the the skin.

[Ken Fitzgerald]

and if only 1 out of 10,000 finds out..pretty low percentage.

Often it's the fit and finish that separates the good products from the cheap ones.

[Dave Lehnert]

I have worked in retail a long, long time. I can tell you fact with most shoppers at purchase is PRICE, PRICE, PRICE. Most customer ask "Do you have" and "How much is it"
You can be a retailer that wants to sell a better product but the guy next door keeps advertising his less quality product for less. That forces you to get a better price from your manufacture. Why? because when you tell your customer that the frame on the other store product is only painted on one side they look at you like "ya, right buddy"
I have been in meetings with manufactures and seen grown men argue over $0.20. Profits can be so tight that .20 can be your profit.

[Ken Fitzgerald]

Dave.....and over the past 10 years or so it's gotten even tougher IMHO. I work on HIGH dollar stuff. Often a machine will cost 1-2.4 million dollars. The difference of a few thousand dollars today can make or break a sale where 20 years ago it had little effect. There used to be a certain brand loyalty among customers. That is rapidly being replaced by best price. At one time, having an established service organization in an area would often swing deals where now it has little influence. The short term worry is price and they will take a chance that there is someone available to fix it when the problem arises.

The consumer is a cause of a lot of this.

If I can't sell my better made products but I can move my cheaper made products, that's where I will be if I want to stay in business.

[Brian Elfert]

I would never buy a certain brand of trailer because they are so cheaply built. There are just all kinds of little things they cut corners on. Doing it right would probably cost less than $50 additional at the retail level for a $2,600 trailer. They do put on flashy LED lights that cost as much as doing things right would cost.

These trailers are mostly sold at big box stores so many customers may have never seen a trailer with everything done right.

I guess they aren't losing enough sales to make changes.

[Bryan Morgan]

What's worse, some unhappy consumers or unhappy investors?

Business today is geared towards keeping the investors happy first.

This is a sad truth. I experience it every day.

[Mitchell Andrus]

There is a difference between company policy and a lazy employee and his foreman.

Company policy says paint all surfaces, employee policy says paint what shows and don't work too hard.

Also, a lousy $3.00 or $7.00 on the assembly line here and there does add up, but the bean counters don't see it as 5% of the retail sale figure, they see it as 8, 10, 13% of the company's net profit on that item. Manufacturing is a contact sport with slim margins where spending an additional 3% or 4% on the ass'y line can send a company into chapter 11.
.

[Brian Elfert]

I don't think I would make it as a product or manufacturing engineer. My conscience wouldn't allow me to design some of the crap manufacturers sell.

[Prashun Patel]

I'm a manufacturer of chemical products.

I've seen quality deteriorate because of competition - not because we have lazy people or our policy is to make bad product.

I can sit on my high horse and refuse to play the game, but I wouldn't have a business then.

We can lament the world we live in, but I think it's naive for you all to blame the manufacturer.

It's the consumers' refusal to pay for quality that drives the supply chain to cheapen itself on all levels.

[Jim Rimmer]

and if only 1 out of 10,000 finds out..pretty low percentage.

Often it's the fit and finish that separates the good products from the cheap ones.

There's an old story about a farmer whose mule died. He sold raffle tickets for $1 to win a mule. He sold $500 worth of tickets. A friend asked him about making 500 people angry when they found out the mule was dead. His reply was "I'll only make one person angry and I'll give him his dollar back."

[John Coloccia]

This is the same bulletin board where you can reliably get choruses of "overpriced", "not worth it", "snobbery", etc at the mention of Lie-Neilsen, Festool and SawStop? It's pretty obvious to me why they pinch pennies. It's because WE pinch pennies.

[Cliff Rohrabacher]

because a tenth of a penny every time you make something adds up over time to one whopping lot of money, if you make enough of something.

It's part of the war against trial lawyers if you can believe it. I often hear bitter complaints about the claims of fraud by plaintiffs whose credit card companies were bilking them of a whopping tenth of a penny on the dollar of interest charges. Resulting in Incredible sums per month of maybe a whole half a penny being wrongly charged to credit customers. Sounds like real exciting stuff huh?
Except that when you have a gozilllion customers and you unlawfully squeeze a tenth of a cent from each of them on a regular basis it adds up and the only way to address it is is by class action.