The cost is the last goal of the LED light to discuss in our articles, but it is not the least important. In the LED tube industry, the companies compete directly on price, so the cost is the primary operations target. If the PAR16 LED PAR CANmanufacturer can cut the cost of producing the products and services, it can cut the price to the customers. Thus, it may increase the sales. Even if the companies do not compete directly on price, they are still interested in cutting their costs. If the company takes away one dollar from the operation’s cost, the company adds one dollar to its profits potentially. This is why the organizations pay attention to the cost goal. Therefore, the cost is a universally attractive target for all companies, not only to the LED bulb suppliers.
To cut the cost, the managers should know where the cost comes from. So the ways in which the LED light manufacturer can cut cost will depend mainly on where the factory costs occur. In other words, the organization mainly spends the money on the below areas.
These are part of the operations costs. For an LED Wall washer manufacturer, the payment for raw materials and other suppliers will be greater than other costs. However, the wholesale LED track light designing company will have fewer costs on its suppliers. The main costs will be staff costs, the high payments to the designers and technicians. Besides the product costs, the LED tube wholesaler spends a lot of money on the fuel, as it needs to offer frequent delivery services to the customers. In some extreme cases, some companies’ costs are mainly on buying the supplies. For the product costs, the PAR16 LED manufacturer can make a change, but an LED light retailer can do little about it. The sourcing department makes all purchasing decisions of the LED tube products, and other departments cannot influence the purchasing costs. They can only pay more attention to use the facilities, the building and the staff.