A cheap procurement price can be tempting for manufacturers that need to produce goods and assemblies at a certain price point to optimize operating costs. But low quotes on imported stainless steel don’t always tell the whole story. Not only can they fail to disclose direct fees and associated costs, but they also don’t show the extra costs that can pile up from delays, tariffs, and general turbulence at the docks.
Understanding the total cost of ownership (TCO) for obtaining stainless steel from different sources helps businesses understand the full price they will pay and more clearly compare supplier options. At AAA Metals, we provide transparent pricing details so our customers can calculate costs using the TCO approach and evaluate all of their potential vendors on equal grounds.
Why Import Quotes Often Hide Real Costs
A common procurement mistake in the stainless steel market is not understanding the full cost of buying materials from different sources. A domestic stainless steel fabricator in the local region, state, or county may have a higher per unit price, which seems high compared to a lower per unit price for imported materials. However, the import sticker price does not include transportation costs, administrative costs, and the added cost of potentially broken pieces and poor quality. Inexpensive imported metals always carry extra costs that are rarely disclosed up front. Many suppliers do this because they compete based on unit price, and by hiding the total cost, it’s easier to win bids and then force the incidental costs onto customers that don’t have the time or bandwidth to pursue backup suppliers.
Freight, Delays, and Communication Barriers
What exactly are the costs that import quotes don’t disclose? Consider these:
- Direct freight costs.
- Administrative and freight management costs for handling customs and proper import regulations.
- Transportation for moving stainless steel stock from the docks to the customer’s location.
- The direct and indirect costs of delays, such as emergency purchases with backup vendors, returns and potential penalties to downstream producers and clients, and the reputational cost of being considered unreliable.
- Logistical frustrations due to language barriers, different import regulations, and time zone differences.
Some of these costs are directly quantifiable but won’t be visible on your quote. Other costs are high-likelihood risks that will eat through your budget if delays or disasters strike.
The TCO Approach to Sourcing Metals
Switching from comparing quotes directly to a TCO approach makes it easier to see all of the costs incurred when sourcing and importing materials. The TCO for stainless steel encompasses
tariffs, logistics expenses, quality control expenses, additional inventory needed to cover damaged and lost goods, and initial acquisition costs, on top of the price of the material itself.
This total cost is a better number for comparing the price of imported goods against domestic suppliers of stainless steel stock.
How Quality and Traceability Save Money Long-Term
Imports often come with risks that are hard to calculate, including data theft, delays, supply chain volatility, and material quality deficits. If quality control measures are poorly defined or unenforced, or if material origins are not traceable, it’s difficult or impossible to verify the quality and source of the order. Conversely, domestic stainless steel sources often have quality control measures and traceability standards compliance built into the price.
For example, at AAA Metals, we meet AMS, QQ-S, ASTM, ASME, and MIL-S standards and specifications through our worldwide sourcing and distribution network. This means our customers don’t have to worry about poor quality, non-compliant materials or scrambling to find appropriate stock from backup suppliers.
AAA Metals vs. Importers—A Cost Case Comparison
When sourcing stainless steel and other materials, it’s critical to understand total acquisition costs in order to make an informed comparison and buying decision. All-inclusive pricing from a trusted metal supplier like AAA Metals makes it easier to see how much materials truly cost as well as their true value. Many importers will offer quotes with simply the material price, which doesn’t include the expense of hiring a licensed customs broker and working with freight forwarders. There is also no clear insight into the tariffs, especially if there is a lack of transparency surrounding the first sale price versus the resale price.
At AAA Metals, we make it easy for our customers to find high-quality stainless steel with a transparent price point. We supply raw materials in many forms including bars, plates, rings, discs, forgings, pipe and tubing as well as polished or in precision cut pieces.
Contact us today to get a detailed quote for stainless steel, nickel alloy, titanium, and more.