What Factors Influence the Cost of a Faucet?

When it comes to selecting a faucet, making the right choice can be a challenging task. Factors such as quality, reliability, durability, and recommendations from family and friends play a significant role in the decision-making process. However, amidst the wide range of price categories available today, understanding the factors contributing to price differences is essential to making an informed buying decision.
 
In this blog, we’ll discuss what factors influence the cost of a faucet. The four factors we’ll focus on are:
 

• Build Quality
• Smart Technology
• Production Batch Size
• Routes to Market

Build Quality

Examining Construction Materials

 
When discussing what factors influence the cost of a faucet, build quality is the first consideration for many. Manufacturers typically make faucets from one of three primary materials: brass, stainless steel, and zinc. Of these, zinc faucets are the least expensive. However, there are several factors you should be aware of before purchasing a zinc faucet.
 
Zinc has a lower tensile strength than brass or stainless steel, making it more likely to crack or break under pressure. Zinc faucets are also prone to corrosion when exposed to water for an extended period. This trait is not necessarily a problem unless the finish layer of the faucet chips or peels, exposing the zinc underneath.
 
Stainless steel and brass faucets are generally more expensive than zinc ones. Both materials are known for their durability, corrosion resistance, and heat resistance. Brass and stainless steel faucets are also typically heavier than their zinc counterparts. If you handle faucets in a showroom, you will notice that some are heavier than others. Heavier faucets are typically brass or stainless steel, and lighter faucets are typically zinc.
 

Finish ≠ Construction Material

It is necessary to understand that the finish of a faucet does not always indicate the construction material. For instance, manufacturers may not make a faucet with a stainless steel finish out of stainless steel. Similarly, manufacturers may not construct a satin brass faucet out of brass. Fortunately, many manufacturers include detailed specification documents that specify the faucet’s construction materials. This information is often readily available, and manufacturers are generally willing to share it.
 
When purchasing a zinc faucet, it is advisable to ensure that the manufacturer offers a reputable warranty covering you for several years in case of any problems. This is also good practice for brass and stainless steel faucets but may be less vital given their higher reputation in the market.
 

Smart Technology

Innovative Features and Price Variations

 
Faucet manufacturers have been using smart technology for many years now. It drives the cost up for simple reasons. Production requires additional “smart technology” components, and there is greater complexity in the production process. Manufacturers use three primary types of smart technology: touchless, touch-activated, and voice-activated.
 
An excellent example of smart technology impacting cost is the comparison of our Borhn Touch Sense Kitchen Faucet with Pull Down Spray vs. our Borhn Kitchen Faucet with Pull Down Spray (without Touch Sense). Although the style is identical, the Touch Sense or touch-activated version has a higher list price than the traditional version.
 
For more information regarding smart technology in faucets, please view our blog: What Are the Different Types of Smart Faucets?
 

Production Batch Size

Economies of Scale and Artisan Craftsmanship

 
The production batch sizes of faucets significantly impact their cost due to economies of scale and production efficiency. In some European countries like Italy, bespoke manufacturing facilities often focus on producing small batches of faucets. While this approach allows for more personalized and unique designs, it also yields higher costs. The smaller production runs may require specialized setups and more manual labor, which can increase the unit cost of each faucet.
 
On the other hand, more extensive faucet factories in Asian countries tend to produce faucets in much larger quantities. These factories can take advantage of economies of scale by manufacturing in bulk. Larger production runs enable them to streamline their manufacturing processes, use more automated equipment, and negotiate better deals with suppliers, ultimately driving the cost down per unit.
 

Is There Really a Difference?

While mass-produced faucets from larger Asian factories may be lower in cost than European small-batch faucets, it does not necessarily imply a compromise in quality. These factories often implement advanced manufacturing processes and rigorous quality control measures. They utilize durable materials to ensure their products meet industry standards.
 
However, what sets the European small-batch faucets apart is the attention to detail, craftsmanship, and the sense of artistry that goes into their production. Skilled artisans may imbue each faucet with a unique character and story, resulting in a more meaningful and personalized product for the end user.
 
Suppose a faucet comes from China, Taiwan, Vietnam, or other Asian countries. In that case, it is more safe to assume it is mass-produced. Italy, Germany, Spain, and Switzerland often mass-produce faucets as well. Still, they are typically not produced at the enormous scale of Asian countries. The more bespoke products usually come out of Europe. The choice between the two ultimately comes down to the user’s preferences and emotional connection with owning a unique piece.
 

Routes to Market

Pulling Back the Curtain on How Distribution Impacts Faucet Prices

The Standard Distribution Method

The route to market that a faucet company chooses can significantly impact the price of its products. The most common route is as follows:
 

• The faucet company or wholesaler imports its goods from a supplier or production facility.
• They then sell the goods to a distributor at a set discount from the product’s list price. The distributors are most commonly decorative plumbing showrooms or big box stores.
• The showrooms then sell the product to the homeowner or trade professional.
• The trade professional may sometimes sell the product to the homeowner if they receive a discounted price from the showroom.

 
Several factors determine the product price at each stage of this process, including the cost of the goods, the markup that the distributor and showroom add, and the competition in the market.
 
As can be seen, numerous layers add cost. Let us assume that a faucet costs $400. The production cost may be around one-tenth of the list price, but this can vary greatly depending on the batch size discussed earlier. The showroom’s price for the faucet depends on their sales volume with the faucet company or special pricing programs in place. For this example, let us assume that the showroom purchases at a 50% discount. In the United States, 50% is typically the starting discount a showroom receives from a wholesaler. The trade professional or homeowner may purchase from the showroom at the list price or a bargain that the showroom extends, often around 20-30% off.
 

Sales Reps

Many decorative plumbing companies also collaborate with commission sales representative companies to service showrooms and increase sales. The compensation methods vary from manufacturer to manufacturer, but reps typically receive 5-10% of each showroom purchase order, sometimes more. Although 5-10% does not seem like much, it can become a significant amount as sales increase. These commissions paid out do eat into the profits of the faucet manufacturers. To compensate, it is common practice to raise prices to regain a portion of the commission fees.
 

The Direct-to Consumer Model

While this is the standard model, there are faucet companies that sell direct-to-consumer (DTC). In some cases, these companies still require a trade account to purchase, but most are willing to sell directly to homeowners. DTC companies typically have lower list prices than many comparable products. These reduced prices are often not an indication of quality but rather the result of eliminating some of the purchasing layers in the typical model mentioned earlier. The DTC model allows end users to purchase faucets close to the wholesale price.
 
Typically, brands sold through showrooms do not sell directly to the end user, as they want to demonstrate loyalty to their network of dealers. A few more prominent brands, such as Kohler, a multi-billion dollar decorative plumbing company, sell directly to consumers through their websites. These brands are usually well-established and can sell directly to consumers with minimal negative consequences. When purchasing directly from these brands, it is essential to remember that you are not only paying for the product but also the many purchasing layers mentioned previously.
 
A simple way to determine which brands are not direct-to-consumer is to visit your local showroom! All faucet brands that showrooms offer follow the typical model with layers of intermediaries. If you are still determining whether a brand is direct-to-consumer, we recommend contacting them to inquire. Typically, these companies are happy to disclose whether they are DTC, as it is an attractive selling point to potential customers.
 
 

Conclusion

Wrapping it Up

 
So, what factors influence the cost of a faucet? Build quality, smart technology, production batch size, and routes to market.
 
Build quality is the most critical factor, determined primarily by the materials used. Smart technology can add to the cost but is not always necessary. Production batch size can also affect the price, with smaller batches being more expensive than larger ones. Finally, the route to market can also affect the cost, with direct-to-consumer sales being typically cheaper than sales through showrooms.
 
When choosing a faucet, it is essential to consider all these factors to find the best value for your money.
 
Explore Borhn’s Direct-to-Consumer Faucet Offering
 
 
 
Sources:
 
Is Zinc a Brittle Metal?
Brass vs. Stainless Steel: What’s the difference? – Lulani
Zinc Coatings for Steel Corrosion… | American Galvanizers Association