The Smartest Way to Buy Insulation
A cost-plus Vinyl faced insulation pricing structure offers the best buying advantages for the general public. If you research cost-plus vinyl-faced fiberglass insulation, you may not find many programs to review. However, if you research the term’ Cost-Plus selling in general, you will find various perspectives, definitions, pros and cons, and alternative selling approaches. In this article, I’ll focus on the commonly accepted definition of the term “cost-plus” and note the positive and negative aspects of using this process when purchasing reinforced fiberglass insulation. As a 40-year veteran in the insulation industry, I believe I’m qualified to shed some light on this subject.
Let’s start with a widely accepted definition:
Cost-plus selling (also known as cost-plus pricing) is a means of pricing or strategy where a person or business calculates the total cost of bringing a product or service to market. Then adds a markup, flat rate, or percentage to determine the selling price. I will delve into cost-plus selling as it pertains to vinyl faced insulation.
Now, some feel this method of selling is detached from market realities. They justify this sentiment by proclaiming that this approach is too internally focused, or in other words, a company is focused on its own cost and interest instead of the customers’. They believe market forces should be the primary determinant of pricing. Although I agree that this is a barometer that should be consistently utilized, I also believe a company must calibrate its long-term sales strategy based on a cost-plus selling structure, especially when it comes to vinyl-faced insulation.
It is worth noting that all approaches can be perceived negatively if not fully understood. I believe this is the case when people are referring to the cost-plus selling approach. Firstly, a company’s intentions and overall operational costs have a profound influence on how it adopts a cost-plus program. Suppose a company’s focus is on creating a means to offer the public a sustainable way to purchase at market-reduced pricing, and it efficiently produces or manufactures the item; in that case, I believe Cost-Plus is the only viable option. For instance, a company aware of its cost has a better understanding of what it needs to clear profit-wise on its metal building insulation. This company is well-positioned to disclose all its costs to the general public, knowing that other companies incur similar expenditures. This type of transparency goes a long way with the general public. Then this firm can walk a potential buyer through the steps required to earn their savings. Generally, people want to earn interest on their savings. Most people will be more inclined to accept the necessary steps or requirements to obtain savings than to receive some “free” offer, which they intuitively know will likely come with some hidden cost down the road.
There is a school of thought that promotes the position that values-based pricing can yield higher markups than most cost-plus programs. Though potentially true, many pitfalls could directly undermine this selling approach down this road. You see, when it comes to pole barn insulation, it is relatively easy to discern objective specifications. An R-Value 10 (3”) WMP-VR-R Fiberglass Facings is about the same, no matter who you buy from. Since this type of vinly faced insulation is a typical DIY project, there isn’t convincing evidence that can change someone’s position when they are installing it themselves. Simply put, you can’t add much value-based profit above the cost-plus structure. For items that the public can easily obtain objective specifications for and purchase from multiple sources, a value-based pricing approach is not a better method. Vapor barrier fiberglass insulation is simply a Cost-Plus item.
Nowadays, with so much bait and switch, vague quotes, hidden fees, upcharging, and other questionable practices, the public is clamoring for transparency. When a company is willing to reveal its actual cost, the average consumer knows it needs to make a profit and has no issue paying a fair upfront vinyl faced insulation rate. With the advent of cell phones, most people can access pertinent pricing information on almost any product, especially a standard product like steel building insulation. So why not be upfront from the start? Those companies that dare to post their real costs and list the fees separate themselves from the pack. It’s about being connected and earning trust. What better approach than a transparent, cost-plus pricing model?
One thing that’s a fact: I haven’t found another approach I prefer.
