“It’s unwise to pay too much, but it’s worse to pay too little. When you pay too much, you lose a little money – that’s all. When you pay too little, you sometimes lose everything, because the thing you bought was incapable of doing the thing it was bought to do. The common law of business balance prohibits paying a little and getting a lot – it can’t be done. If you deal with the lowest bidder, it is well to add something for the risk you run, and if you do that you will have enough to pay for something better.”
-John Ruskin
I read this on a poster in a washroom at a restaurant in Montreal. I think it was meant as a – not very subtle – way to get the customers to tip more – and it worked. I love this quote not just because I am a sales professional, but also because I am a consumer. My rule: never buy cheapest. Buying second or third cheapest is generally a good strategy. Look for value from the supplier beyond the dollars. Bargain not just on cost, but also on value add-ons. These may be easier for the supplier to negotiate on, Perform a cost value analysis to look at the total cost of ownership. Consider the consumables cost, repair cost, support, and product phase out.
Of course this detailed analysis is for medium or large purchases. Do not perform a cost-value analysis on a chocolate chip icecream!