My Existing Supplier Is Reliable but More Expensive — How Much Cheaper Should Another Supplier Be Before I Consider Switching?

What the reliable supplier carries in your candle

The title gives no numbers, so everything here is a labelled worked example on the series default candle, 200 g at 8% (184 g wax, 16 g oil, total-weight basis). Your current wax at ₹560.00 a kilo and your bestseller oil at ₹5,200.00 a kilo are illustrations, not claims about any supplier.

At 800 candles a month the wax supplier receives ₹82,432.00 of your money a month; the bestseller oil, at 250 candles a month of that scent, ₹20,800.00. Those two monthly figures are the denominators of the threshold: the bigger the spend, the smaller the percentage a newcomer needs to beat. The total COGS figure matters too, because every reject costs the whole candle (₹275.10), not just the material that caused it.

The threshold, line by line

Read the result as a price: the newcomer's wax must land at ₹512.29 a kilo or less, against your ₹560.00, for the switch to break even at the same tested performance. Landed means delivered to you, with freight and any difference in GST treatment included; the landed-cost method is the landed wax cost post.

Three of the four lines are about the newcomer being worse than your current supplier at something. If they are genuinely as good (as reliable, as consistent, as well documented), the threshold falls to 2.24%: only the switching cost and the first months of extra checks remain. That is the honest test of a sales pitch: ask the newcomer to show you why ΔR and ΔQ are zero.

Your own worksheet in five numbers

You need five figures, and you have most of them already. M, your monthly spend on the material, from the last three months of invoices. S, the one-off cost of qualifying the newcomer: test candles at real prices, your hours, spec and batch paperwork, and any old stock you would scrap. W, the months over which you want S back; shorter for a candle with excellent reviews, longer for a line that is stable and low-risk. ΔR, the difference in expected stock-outs a year between the two suppliers, times what one costs you, divided by twelve. ΔQ + ΔD, the extra rejects and returns you expect while the newcomer's lots settle, times your full candle cost, plus the extra hours of incoming checks. Put them in the formula and you have a percentage you can say out loud to the newcomer: "beat this, landed, and I will test you." That sentence is also the most useful thing you can say to your current supplier.

Putting a price on reliability

Stock-outs (ΔR)

Price a stock-out by what it does to you: orders delayed or lost (times their contribution), rush buying at a higher price, idle labour, and the emergency substitution that then needs a retest. The worked ₹15,000.00 per event is an illustration; your own figure comes from your last real stock-out. The method for building that number in detail is the stock-out cost post. Then estimate how often each supplier runs out. Your current supplier's record is data; the newcomer's is a guess, so ask for references and start small. The only fair comparison is expected events a year, not promises.

Lot variance (ΔQ)

A material that varies from lot to lot shows up as rejects (frosting, rough tops, weak throw, colour drift) and returns. The worked 1.5 extra points at 800 candles costs ₹3,301.20 a month because each reject wastes a whole ₹275.10 candle. Putting a price on inconsistency for a cheaper wax is the subject of the ₹10 cheaper but less consistent wax post; for an oil, compare each new lot with the last before production, as set out in the new batch of a bestselling scent post.

Documentation and quality gaps (ΔD)

Lot numbers on every bag and bottle, MSDS and IFRA documentation for oils, a GST invoice, and a named person who answers questions: each saves you time and protects you with retailers and customers. A supplier who cannot provide them costs you hours of incoming checks and chasing, here a worked ₹600.00 a month. If a document you need for a retailer simply does not exist, no discount covers it. The scorecard for choosing one fragrance supplier on performance, consistency, documentation, price and availability together is the one-supplier comparison post.

Worked thresholds: wax and a bestseller oil

The oil's bar is higher than the wax's (10.64% against 8.52%) for two reasons: the monthly spend is a quarter of the wax spend, so every fixed cost is a bigger share of it; and a bestseller scent going out of stock costs more than a wax that can be bought elsewhere in a pinch. The newcomer's version of your bestseller would need to land at ₹4,646.72 a kilo or less, and pass a blind ladder test at the same load.

Now put three offers against the wax bar:

At these worked figures, 3% loses money every month and 8% is roughly a wash, which is worse than it sounds because the costs are certain and the saving depends on the newcomer behaving. Only the 15% offer clears the bar with room: about ₹6.67 a candle after every worked cost. Whether a 15% offer really survives testing is the 15% cheaper supplier post.

Why small savings rarely justify leaving

Three things follow. First, at small volumes the fixed costs dominate and the bar climbs fast (13.04% at 400 candles a month). Second, reliability is the biggest lever: a newcomer with a poor record can need 15.56% just to break even. Third, the base case already assumes the newcomer's material performs the same after testing; if the test shows a load or wick change, the switching cost rises and so does the bar.

There are also things the formula does not price: a supplier who gives you priority when stock is short, who flags a lot change before it ships, who has helped you through a bad batch. Those are the reason for the 3-point margin, and the reason many makers stay with a reliable supplier for years at a higher price. Staying is not inertia if you have done the sum.

Payment terms count too. If your current supplier gives you credit or ships before payment and the newcomer wants advance payment, the cash you tie up has a cost: a worked 15 days of wax spend (₹41,216.00) at a worked 1% a month is ₹412.16 a month, another slice of the threshold. The reverse also holds: a newcomer offering better terms lowers it. Write the terms next to the price before you compare.

If the gap is big enough: switching without breaking the candle

Keeping the old supplier approved while you move volume is a choice with its own economics: a small premium for insurance against the newcomer failing. When that is worth paying is the two approved suppliers post. And before you ask a new supplier for a price at all, check whether your current one would improve terms on a forecast: the when-to-ask post sets out when your volume earns that conversation, and the per-order or committed-volume post how to structure it.

CSI items for the comparison

A wax and three oils that illustrate the threshold at different monthly spends, and one honest stock-out. Chosen on page statements, price and stock on 4 October 2026; CSI publishes no throw or burn data, so nothing is ranked on performance.

Frequently asked questions