Over the past three years, South Africa’s contracting economy has placed companies under immense financial pressure. To add to these already trying times, the Covid-19 lockdown, instated earlier this year, further contributed to negatively impacting the bottom line of businesses. This has consequently brought about a mass drive for organisations to minimise costs wherever they can.
With regards to bearings, this may mean pressing existing suppliers for reduced pricing or alternatively seeking less costly – and subsequently, lower quality – suppliers and/or brands as substitutes which may ultimately cost businesses considerably more than expected.
Consider the following risks when attempting to minimise spend on bearings:
Negotiating Cheaper Pricing with your Existing Supplier:
- While this may appear the easiest solution, it is not always the most effective. Bearings are not a high margin product and reputable distributors are operating at already low margins with limited scope to further reduce costs.
- It is worthwhile requesting if your supplier has the capacity to assist with reduced pricing. However, if implemented too aggressively, a once trusting and long-term relationship with your supplier may be negatively and irreversibly damaged as they feel pressurised to operate at an unsustainable margin to retain you as a customer, thereby adversely affecting the hard-earned level of loyalty between the two companies.
Onboarding a New Supplier with Cheaper Prices:
- It is not recommended to change from a reputable supplier to one that is less familiar based on pricing alone. Instead, consider the full offer of services the suppliers are competently able to offer you such as product range, reliable supply, after sales support, BBBEE level, competitive pricing along with friendly and experienced staff to deal with.
- Onboarding a new supplier for the sole reason of lower pricing can damage the long-standing trust and loyalty established with your existing distributor, while a new relationship with an unknown and untested supplier commences. Hastily sourcing a new supplier may introduce the following risks:
- Being supplied counterfeits as the new supplier still lacks credibility.
- Poor service and unreliable supply that can cost considerably more than the minimal saving on the bearing price. Receiving the correct bearing at the right time remains critical to buyers to reduce downtime and ensure projects are delivered punctually.
- Poor after sales support in the event of any post sale issues such as during fitment, after commissioning of the machine, or at any time in the future.
- Not receiving the level of loyalty your company has become accustomed to from your current supplier. Such loyalty is built over many years and is exceptionally powerful, making a considerable difference in times of need.
Accepting an Alternative Brand Due to Cheaper Pricing:
- Sourcing and fitting bearing brands of Japanese origin in previously FAG and SKF applications to save costs poses risks to the machine repairer or manufacturer. It has been contended that Japanese bearing brands are two to three generations behind FAG and SKF bearings in terms of research and development, innovation, and design, which are universally considered leading brands within the global market.
- Machines often have an OEM specification to be fitted with either FAG or SKF bearings.
End-customers (the final user of the product that the bearing is fitted to) may specify or expect FAG or SKF bearings to be exclusively used. If this is not satisfactorily achieved and a premature failure occurs owing to the fitment of an alternative bearings brand, claims against the machine repairer or manufacturer that supplied those bearings could be made.
- The support offered by FAG and SKF is what differentiates these brands from their bearing counterparts. FAG and SKF products are backed by a manufacturer’s warrantee and local engineering services are available to provide after-sales support in the case of any issues that may arise.
- In the case of customers that use economical brands manufactured in China; there is a broad spectrum of quality available from China, ranging from defective to near-premium quality. Buying a cheaper brand ultimately poses the risk of receiving inferior quality bearings, that may cost a lot more in the long run.
Risk of being Supplied Counterfeit Bearings:
- Saving on the purchase price of bearings alone presents the risk of purchasing counterfeit bearings.
- Ordering from untrustworthy suppliers presents a major risk of being supplied counterfeit bearings.
- If the price of an item of the same brand is considerably less costly than other reputable suppliers, proceed with caution.
- Such inferior quality, counterfeit bearings can cause substantial damage and resultant setbacks such as unnecessary legal costs, machine damage, loss of a customer, reputational damage as well as the cost of replacement bearing.
If you haven’t read the article, check out our 10 tips to navigate the counterfeit bearing epidemic in South Africa here.
Bearings 2000 firmly believes in the old adage ‘Good work ain’t cheap, cheap work ain’t good’. With almost three decades of industry experience and three-generations of supplier relationships established globally, we offer a wide spectrum and comprehensive local stockholding. The stockholding, combined with our proficient, dedicated employees and use of cutting-edge technology, enables us to provide top tier service at a competitive and fair price.
Our “Long-term Thinking” value pillar rings true in this regard: We remain resolute in not overcharging our customers to maximise short term profits and rather offer competitive and fair pricing with a simplified and efficient service and after sales support. Partnering with our customers for the next 30 years and beyond is far more important to us than leveraging off an instantaneous sale.