The TCO or Total Cost of Ownership refers to the price of an asset plus the cost of using and maintaining the asset over its lifespan. TCO is an effective way to compare long term costs of various options when making major purchases; you want to pick items with low and improved TCO.
There are three main factors to consider when calculating TCO:
1. Purchase price:
This is the upfront cost of the asset. It includes the cost of the item itself, as well as any taxes, shipping, and installation fees.
2. Maintenance cost:
This is the cost of keeping the asset in good working condition. It includes regularly scheduled servicing and any costs associated with the item's expected maintenance costs.
3. Repair cost:
This is the cost of fixing the asset when it breaks down, including the cost of labor for repairs and the cost of parts. It can be difficult to predict repair costs in advance, but they can be significant over the lifespan of an asset.
Be sure to take into consideration how well an item performs and could cost for all three factors to get a better understanding of your product performance.
For example, if the TCO of two similar products is significantly different, it may be due to the difference in one or more of the factors listed above (ex. Repair cost), which will be a result of things such as items used to make the product, environmental print, quality of materials etc.
There may be some areas where one product is much more efficient than the other, which could lead to significant cost savings for the business. This comes in handy for businesses when predicting future costs. The budget can be created more accurately and effectively, avoiding cost overruns.
Businesses might, sometimes, avoid considering TCO and just focus on the upfront price, which could lead to an inaccurate budget as well as a less-than-satisfactory customer experience – in the long run. For instance, if you see two couches, which look very similar, are priced at $1000 and $2200 respectively, you might just focus on the upfront price and go with the former. However, the wear and tear of the former couch will be much higher than the latter, causing you to, possibly, make another couch purchase soon, due to its short lifespan.
The TCO formula to follow is:
Purchase price + Maintenance costs + Repair Costs = TCO
Water Softener and TCO
Many people continue using salt for their water softeners, ignoring the TCO altogether. Although this was the traditional way of softening water, salt has proved to be a costly, heavy, difficult and harmful process. Salt prices are only going higher. Using salt for water softeners is no longer just a tedious task, it will also start bringing in higher bills for your family.
HYDROflow products serve as the perfect alternative to salt as they are quick-and-easy to install, cost-friendly, do not require any heavy lifting so that people of all ages can quickly install them and unlike salt softeners, these products cause no harm to the environment. Moreover, you can simply install our devices yourself with minimal effort and see rapid results. Our products are designed and sold with improved TCO meaning, once you make the purchase, you won’t have to worry about tedious water softening tactics for a very long time!