…especially if you’re a manufacturer in Canada.The strong US dollar creates some interesting situations for Canadian manufacturers who export to the US (or any other country). With a de-valued Canadian dollar, our manufactured goods may cost less for international buyers, but what if these same products consist of largely US materials and components? Hopefully, the added cost of US components doesn’t significantly affect the end product’s cost, but it’s still in any manufacturer’s best interest to control these component costs as much as possible. We import most of our goods from the US for our Canadian customers. Over the past year, we’ve seen the cost of components increase by nearly 45%, and that’s solely due to the exchange difference. As you can imagine, this poses a major challenge for manufacturers who strive to remain competitive in their markets. The good news is that there are some very easy ways to combat these increases, and even remove them completely.
Buy in USDThe easiest and most obvious way to take the exchange cost out of the equation is to trade in the same currency. If you have a US Dollar bank account, you can buy in USD. We have many customers who pay in USD for their orders. This method works very well especially when your customers pay you in USD as well, but at the very least you can be sure that you’re always paying the most current rate.
Dollar Cost AveragingBuy low! Sell high! Buying USD when you think the rate is about to climb is a good way to try and stay ahead of any increases. You may not get the lowest exchange rate all the time, but if you buy most of your US currency when the rates are “good”, you can usually save a few basis points over the long term. If you’re not confident in your ability to exchange currency, or if you don’t have time to watch the markets, that’s okay! There are experts who can help you with that. If you don’t already deal with any of the Currency Exchange companies in your area, you should consider reaching out to them. They have a good sense of the markets and will give you a heads up when it’s the best time to make a currency trade.
Take Advantage of DiscountsIf you could save 2% just by paying your invoice within 10 days, would you do it? Studies have shown that early payment discounts are a great way to reduce costs in the long term and ultimately earn you far more than the 2% you save immediately. If your vendors don’t offer early payment discounts like 2%10/N30, ask them about it! Another form of discount that many companies overlook is the Quantity Pricing discounts, or Bulk Pricing. If you’re a manufacturer, you’re likely very familiar with bulk pricing and how it can save you money. A good vendor will typically tell you about any available discounts and will alert you when it makes sense to buy just a few more to qualify for huge savings. Even if it means buying less frequently, volume pricing can be a great benefit.
Automate Your Regular Purchases with Blanket OrdersBlanket Order is a bulk quantity order with scheduled releases for up to a year from the order date. Blanket orders are great for companies who place consistent, repetitive orders. They’re also beneficial because they allow you to guarantee delivery and pricing for a long period of time, which frees you up for other things that may be more urgent and time-sensitive. Blanket orders give us the ability to purchase at larger quantities too, which means we can pass along those savings to you.
..or use any combination of the above!Every manufacturer is different and it may not be possible to take advantage of all of these options. You might not be sure if any of them are right for you. We can help with that. We can tell you very quickly if you might benefit from consolidating orders into larger, less frequent orders. We can show you the benefit of buying in USD, and we can discuss how blanket orders might help your bottom line. If none of these options seem right for you, then we’ll just carry on giving you the best possible pricing and all of the technical support we can give you. If you would like us to review your purchase history and give you some feedback about how we can help reduce your costs, please use our Contact Form to reach us! Thanks for visiting us! We hope to hear from you soon!
Steeves Agencies is proud to support the Canadian Manufacturers and Exporters Association!
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The CME does a lot of great work to help develop the manufacturing sector in Canada and works hard to make Canada a leader in manufacturing innovation and efficiency. With their lean manufacturing initiatives, member-driven committees and their trade development programs, the CME is an amazing organization. If you’re not a member, check them out!
Steeves Agencies is a Canadian-owned distributor of specialty access hardware, and we’ve been serving Canadian manufacturers for over 30 years. We’re the hardware specialists! Call us today or use our Contact Form to reach us.
Steeves Agencies is a 100% Canadian-owned family business, and we’ve been serving Original Equipment Manufacturers in Canada for over 30 years. We carry a range of industrial hardware that’s used in trucks, buses, boats (and ships!), airplanes, RV’s, campers, metal boxes, and so much more.
Call us today or use our Contact Form to reach us. We’re here to help!