“So, tell me” The builder said, “Why can I buy a concrete grinder that looks just like yours online for half the price? The only difference I could see was the colour”
“That’s a good question” I replied “Let’s consider the difference between cheap and profitable”
The short answer is that design knock offs of concrete grinders, made in countries with cheap labour and minimal quality control, are not actually cheap. They are between a half and a third cheaper than brand name equipment, but does cheaper make them cheap? We don’t think so.
Consider the cheap chainsaw. The Stihl copy shown here is said to retail for around $350. In actual fact these copies of older Stihl models are always “on special” for between $150 and $200. This reflects the market value of a cheap chainsaw. The brand name equivalent as shown retails for $1300, almost ten times the price.
Typical cheap copies and imitations, whether they be Rolex watches or power tools, tend to be priced between a tenth and a fifth of the cost of the genuine article. Paying even a quarter of the price of the genuine article would be considered too much.
This reflects the absence of overheads such as research, development, market testing, first world wages, advertising, after sales service and spare parts, as well as the prestige of owning a brand name item.
For a cheap concrete grinder to meet these parameters, the 480mm size grinder should retail for under $3000 to be viable, about half of what it is currently advertised for sale.
To pay half the price of an Australian made item, without the back up and support to keep the machine running, not to mention substandard build quality, is rarely a wise investment. Therefore, you don’t see no-brand chainsaws or concrete grinders at your local equipment hire company.
This is also why cheap tools are often available in times of shortage, when brand names are not available, as successful contactors use quality tools.
When considering a cheaper tool ask yourself the following questions:
- Will the cheaper tool do the job? Even if I have a one-off job, buying an undersized tool that won’t complete the job is pointless.
- Are you happy purchasing the cheapest brand of tool available, and risking losing time with breakdowns?
- What is the back-up plan? If the tool doesn’t meet expectations, do the one-star Google reviews for the company indicate these types of problems regularly get resolved?
- Ignore five-star reviews from reviewers with one or two reviews, they are unlikely to be genuine.
- If I can’t afford to invest in a quality machine, what options do I have to hire a suitable machine?
- What will my business reputation look like if my clients see me using cheap machinery?
- If you are using the machine regularly, can you afford not having proper technical support from someone who stocks a comprehensive range of spare parts?
- Service from online budget tool suppliers typically requires submitting a request online.
The cost of running cheap equipment is rarely cheaper in the long run. At Floorex we pride ourselves on offering long lasting quality Australian made equipment, that will make your business profitable.
Maintenance reports from major hire companies consistently show quality equipment returns higher profit, even when taking into account the higher initial investment.
The common law of business balance, attributed to John Ruskin, sums this up clearly:
“There is hardly anything in the world that cannot be made a little worse and sell a little cheaper, and those who consider price alone are that man’s lawful prey.
It’s unwise to pay too much, but it’s worse to pay too little. When you pay too much, you lose a little money – that is all. When you pay too little, you sometimes lose everything, because the thing you bought was incapable of doing the thing it was bought to do.
The common law of business balance prohibits paying a little and getting a lot – it can’t be done. If you deal with the lowest bidder, it is well to add something for the risk you run, and if you do that you will have enough to pay for something better.”