Reducing Hidden Costs to Achieve Maximum Profitability

April 16, 2024
Tony Carver

understanding total cost of ownership

We all want to get the best deal possible for the goods that we purchase.  But how much does something actually cost?

For our customers, the value of the wire they buy from us goes beyond the actual cost on the sales order.  In today's tight labor market, the ability to reduce the amount of time processing transactions and minimize material handling is more important than ever.  These are costs that are not as visible and often harder to calculate, but ultimately have a significant impact to the bottom line.

At Encore Wire, our core values of superior order fill rates and speed of delivery are what we focus on every day to reduce transaction processing costs for our customers.

Let's look at some of the hidden costs that can erode profitability if they are ignored:

  • Back office transaction processing
    • Generating the Purchase Order
    • Tracking the status of the shipment
    • Vouching and paying the Invoice(s)
  • Material handling
    • Checking in the material
    • Putting goods away in the warehouse
    • Warehousing storage costs

 View the following reference for considering speed and quality of material delivery.


A recent IMARK Electrical Now article estimated the cost to process a transaction at $200 each.  While this amount can vary depending on organizational structure, the concept remains the same.

Encore Wire Transaction with Superior Fill Rates, Shipment from Single Site Campus

  • 1 Purchase Order
  • 1 Delivery
  • 1 Invoice

Total Processing Cost = $200

Transaction Purchasing from 3 Different Vendors at Lower Fill Rates, Shipments from Multiple Locations

  • 3 Purchase Orders
  • 6 Deliveries
  • 6 Invoices

Total Processing Cost = $1,200

Cost Difference = Increase of 500%

How much can your organization's profitability improve by partnering with Encore Wire?

Tony Carver
Director of Cost Accounting

Encore Wire