First, make sure you are comparing the same product
The product group name is not enough. Compare the brand or agreed characteristics, packaging, origin and volume. Differences in quality or composition must be assessed separately from price differences.
For an alternative, it helps to consider dosage and finished-product yield after trials. A lower price per kilogram alone does not guarantee a lower formulation cost.
Bring quotations to the same delivery point
Factory prices and prices delivered to your production site include different expenses. Clarify the currency, VAT treatment, goods transfer point and which services are already included.
Direct procurement accounts for the ingredient cost and agreed delivery fulfilment expenses: payments, logistics, clearance, necessary documents and delivery. Their scope is determined by the transaction.
Review the cash cycle
Stock items and advance-payment orders differ in payment timing and lead time. For planned procurement, assess how advance payments affect working capital and how much stock is needed until the shipment arrives.
With urgent requirements, small volumes or an untested formulation, the advantages of direct sourcing may not be realised. Base the decision on the total costs and production needs.
A short comparison checklist
- The same characteristics or a confirmed application result.
- The same currency and comparable VAT treatment.
- The same delivery point and scope of expenses.
- Comparable shipment volume, pack size and arrival schedule.
- Payment terms and stock requirements taken into account.