Fork lift batteries - price versus value

Posted on 27 May 2017 by

Forklift batteries are a big ticket item. Typically a few thousand dollars, and some run to more than $10,000.

So it isn't surprising that the person charged with finding a replacement will be making a few calls, to find the cheapest option.

The trouble with that is that some forklift batteries are made in South Korea, where the quality, from the right manufacturers, is exceptionally good. Others are made in India or China, where some manufacturers do make a good product, BUT some make an appallingly rough product from low grade lead, overly strong acid and poor manufacturing tolerances.

Now, if you are a battery seller (and I am), you need to make a choice. The dreadful stuff is dirt cheap, and you can be very competitive on these deals and still keep a fat margin, but the product probably won't last long and the forklift will be unreliable, slow, or need a lot of rest breaks for recharging. The battery will also be shot within a year or two. The alternative is to keep your standards high, offer a high end product with long warranty, but accept that there might only be 10% margin (if you are lucky) to spread between the wholesaler, retailer and the credit card company. Yes, really, the margins are that tight on the good products.

So, when the boss asks the procurement manager how they got on with the forklift battery, they have a few possible answers:

  1. I made 5 calls, boss, and I got the price down from $5000 to $3500. I've saved us $1500. I don't know if there is a reason for the difference in price. Or:
  2. I made 5 calls, boss, and I ordered the cheapest, poorest quality battery pack possible. The forklift will probably be out of action several times every year, and the warehouse will be in turmoil but, never mind, at least I saved $1500, which we can put aside ready for the next time we need to buy a replacement for this forklift, which will also probably be sooner than you think. Or:
  3. I made 5 calls, boss. Prices ranged from $3500 to $5000. I had a long chat with each vendor and the cheap ones reckoned they were just better at pricing, but the more expensive vendors explained why. The $5000 product comes with a 5 year warranty and is made in South Korea. The cheaper ones are made in India and China and the warranty isn't worth having. We'd lose more than $1500 with one hour of lost time in the warehouse, so I've gone for the South Korean product. It represents far better VALUE in terms of reliability and longevity. 

Of course, it's our job to explain the difference, when people call. Once we do, there really is only one answer that makes any sense.