Price vs. Cost: What is the Difference?
At Weiss Bros, we sometimes hear clients say “the price is too high.” People often correlate price and cost, but it’s important to recognize the significant difference between the two. Price is defined as the amount of money which anything is bought or sold. Cost is defined as the expenditure of money, time, labor, trouble, etc.
There is an old adage, “Beware the cost of the lowest price”. Simply stated, just because a product is less expensive than another, doesn’t mean you (or your business) save money in the long run. Many times you end up spending more because of the time and efficiency lost to a less expensive, inferior, or differently packaged product. Or, you could potentially spend twice as much as you’d originally planned because you simply use more of the less expensive product than you would of the more expensive product. Below is a Return on Investment comparison of a $60 Roll Towel (71400) versus a $30 Multifold Towel (48000) which provides a great example of the Price vs Cost question:
In the above example:
The Roll Towel price is $60 per case which is double the price per case of the Multifold Towel. Over time however, after the total cost of use is calculated, the client saves 32.8% or $236.40 per year.
Our job as your partner is to help you, our valued client, control your costs to allow you to remain competitive at what you do best. We are here to help so please let us know how we can. Contact us today.
