Purchasing Wisdom

18 Items to consider before you make a capital purchase

In these days of outrageous marketing tactics and deceptive sales come ones, it would appear that discerning between fraud and legitimate offers would be an easy task.  Unfortunately, that is not always the case.

 

The crafty company knows to mix enough truth into the offer that will lend strong credibility to the business proposition.  The potential consumer owes it to their company to thoroughly check out the offer before proceeding with a major commitment.

 

The thorough investigation of the potential products and services falls under the category of due diligence responsibilities for the institutional consumer.  Some commonly asked questions and activities required before a significant business to business purchase are as follows:

 Pre-Qualification Questions

• Product sampled and tested in a “real-life” situation
• Product performance meets or exceeds accepted engineering standards
• Product performance meets or exceeds internal company criteria
• Warranty provisions
• Competitive market pricing provided
• Ability to meet delivery criteria
• Determine financial stability of the supplier
• Commitment to support product with parts and engineering support for a minimum period of time
• Training provisions-personal, computer and written programs
• Local support necessary?
• Back up inventory available within specific period of time
• Repair capability
• Willingness to custom program or engineer product changes
• Product history provided – mean time between failures
• Third party references
• UL, CE, or other testing agencies approval
• ISO listings, internal, external quality audit scores provided
• Totally unique product or multiple sources of similar product available

 

These types of criteria help protect the institutional consumer, but what clues can we use to protect ourselves against unscrupulous providers of personal goods and services?

 

Once again research in the area of a potential purchase is an important aspect of avoiding a painful personal decision.  The internet allows us a significant method of comparing features and pricing in many common product categories.  Look closely at features versus pricing in comparable items.  The old cliché that says if it sounds too good to be true, it probably is, holds a great deal of truth.

 

A good example is used automobiles.  You will typically see a correlation between age, miles on the car and brand.  The newer the car and the lower the miles, the higher the price.  High miles on a newer car drives down the cost.  Low miles on an older car will command a higher price than a car the same age, but with more miles on it.  Other aspects such as gas mileage, sound systems and comfort features will demand variations in pricing.

 

Don’t get pushed into the “same day” close tactics employed by many high ticket consumer items.  Most of these methods are used to complete a sale when your emotions are running strongly in favor of ego satisfaction and not the long term cost of credit.  And it is rarely true that “there is only one item left like this.” 

 

Watch for the fine print in contracts which may weigh heavily in favor of the seller.  This is especially true is some financing options, where interest rates can be escalated dramatically in the case of tardiness.

 

We all should know there are physical clues to someone who is malicious in their pursuit of business.  As stated in Proverbs 10:10, “He who winks maliciously causes grief, and a chattering fool comes to grief.”

 

Watch closely for other clues such as a lack of eye contact, absolute statements about the superiority of their product, strong bait and switch tactics, overly emotional appeals and the inability to adequately explain the features of their product.  Look at the physical appearance of their facilities, the individual salespeople, the product brochures, printed forms, and record keeping procedures.

 

I clearly remember being taken by a local attorney in my hometown over a teenage fender bender incident.  Convinced I was in the right, (despite the traffic ticket I received).   I hired a wrong side of the tracks lawyer based on the recommendation of some friends.

 

His office was a disaster of piled up paperwork and dust in a small frame building in the center of town by the railroad freight depot.  His physical appearance was unkempt and he quickly took my case and money.  On the day of the trial he appeared late and unprepared.  The judge quickly found me guilty as charged.  My attorney told me to go to the clerk and plead “nolo contendre” and he would see that the charge did not go on my driving record.  However, what actually took place was that he paid the reduced fine and pocketed the remainder of the fee.  My ignorance of the legal system and poor choice of attorney cost me and the other party involved, money and time.  It also meant higher insurance bills for me, a driving record incident and the sting of legal system distrust generated by the lackadaisical approach used by my lawyer.

 

These examples are just a reminder that it always pays to practice wise purchasing tactics or suffer the consequences.  Therefore, don’t get caught up in the folly of fools by rushing into quick decisions or failing to ask the appropriate questions.  The penalty you bring on yourself will be justly deserved.