You found mulch for $36 a yard.
They'll give you 30 days to pay.
Sounds like a pretty good deal.
But did that lower price end up costing you more?
Let's do the math.
Let's use some easy numbers to see what happens.
Your job needs 12 cubic yards.
So you buy 12 yards.
You spread the mulch.
The job still isn't finished.
You got short loaded. In this example, those first 12 “yards” only gave you about 9 actual cubic yards.
That's why you had to buy about 3 more yards to finish the job.
To end up with the 12 actual cubic yards your job needed, you had to buy 16 yards.
Now multiply the 16 yards by $36.
16 × $36 = $576
Now compare that to buying 12 actual cubic yards at $40.50 per cubic yard.
12 × $40.50 = $486
Now look at the two totals.
$576
$486
Difference:
About $90.
You started out thinking you were saving money.
But finishing the same job cost you about $90 more.
You didn't buy more material because you wanted to.
You bought more because the job still wasn't finished.
Now let's say this happens about once a week.
Week one, about $90 more.
Week two, another $90.
Week three, another $90.
Week four, another $90.
Now you've spent about $360 more this month doing the same amount of work.
Suppose you made 48 similar purchases during the year.
About $90 more each time.
That's about $4,320 more over the year.
Small numbers don't always stay small.
That's why it's worth looking at the total cost of the job—not just the price on the invoice.
Now go back to where we started.
You found mulch for $36 a yard.
You got 30 days to pay.
It looked like the better deal.
Now that you've seen the numbers, do you still think you saved money?
Before comparing prices, make sure you're comparing the same amount of material.
If you're not comparing the same amount of material, you're not really comparing prices.
That's how you find out whether the lower price really saved you money.