Currencies fluctuate constantly. In the first 5 months of 2023 the US dollar moved by 6.7%. The Chinese Yuan by 6.5% and the South Korean Won by 11.7%. Fluctuations like these can have a big impact of your ability to deliver stable pricing to your customers. Pricing stability is important in the electronics industry for several reasons:
Pricing stability can provide a competitive advantage to companies that operate in the electronics industry. When prices remain stable, customers can plan their budgets accordingly, which can help them make better purchasing decisions. This stability also helps companies maintain customer loyalty and establish long-term relationships with their customers.
Pricing stability is also important in the planning of new products. When companies have a good understanding of how their products are priced in the market, they can more accurately estimate the costs of new product development and the potential return on investment. This can help companies make better decisions about which products to invest in, and which ones to avoid.
Supply Chain Management
Pricing stability can also help companies manage their supply chains more effectively. When prices are unstable, it can be difficult to plan production schedules and manage inventory levels. By maintaining stable prices, companies can more effectively plan their manufacturing schedules and manage inventory levels, which can help reduce costs and improve overall efficiency.
Finally, pricing stability can help build consumer confidence in the electronics industry. When prices are stable, customers are more likely to trust that they are getting a fair deal on their purchases. This can help build a positive reputation for the industry and increase customer loyalty over time.
How to impact pricing stability
To get stability in component unit costs, there are a number of ways to help this happen:
The more units you order, the more you can benefit from economies of scale. The tooling costs for any component will be the same whether you are producing 100 units or 100,000 units. Ordering a year’s stock in one go means you get every unit for the same price. But this usually means you are tying up large amounts of capital and adding stock to your balance sheet. It also means more storage cost.
Buying from Gelec
We offer a solution that gives you all the benefits of bulk orders, but none of the issues. When we produce your component parts, we work with you to determine your unit requirements. We make them for you and we store them for you. The difference is that we only charge you for the components when we deliver them over the coming year (tooling costs are up front). Imagine:
- Stable pricing
- No storage requirement
- No large capital expenditure
- A reduced balance sheet
Overall, pricing stability is important in the electronics industry because it can help companies establish a competitive advantage, plan new products more effectively, manage their supply chains more efficiently, and build consumer confidence in the industry as a whole.