What do you think a product price?

I think it is a very hot topic of the price for the product , we can see everywhere to talk about the price.

Indeed , the price is very important in the cooperation , it will decide our cost and profit. But what do you think about the price ? Is it just only a number ? I don't agree with it , let me show you a story between our client and us .

About 2 weeks ago , we have a client from Singapore, they are one of our long term clients and we just talk about a microchips IC . They are going to purchase about 1000pcs , at the beginning the problem is the price.

We are very close partners , so we provide very good offer, however they are asking discount of it . We really understand that they are requiring a better offer, after consider carefully we gave in about US$ 1.2/pcs

However , they are asking us again about another discount, as they told us that another Japanese supplier provide they a price that US$2/pcs better than us. They required us to make a US$1/pcs more better offer , we really feel not good about that .

We are long term cooperated partners , it is not necessary to do that. Finally client provide a "evidence" to prove their another supplier really provided a better offer which is US$2/pcs better than us . That is true , but there is a condition ,"warranty 90 days"!

Come on , we are providing 365 days of the warrany , and they are just provide 1/4 of ours ! I told my client that is not the same product , I mean the same product but not the same "service". Nobody can 100% the product is perfect no failure , so when the failure happens how we react is very important.

we are a distributor of famous brand ,if the product is failure for the quality issue , it is our responsibility to solve it. But what if the user find that the product is failure after 90 days warrany from that Japanese supplier? Will they take care of it ? No! But for us , we can provide our client 365 days warranty . It is a 4 times peroid of theirs , so it is not worthy to have a US$ 2/pcs for a 4 times warranty ?

Sometimes we will make some insurance to make sure we can have some support when something bad happen, and that costs us a lot. Now this US$2/pcs is just like a insurance to make you longer protection , so we think it is worthy .

I told this story to my salesman , make them understand , price is not only a number for a product , sometimes it also contains a lot of invisible service and value.Please tell your clients , we are not only provide you the high quality product but also professional service.

#price #components #semiconductorcomponents #microchips #IC

Utmel Electronic Co.,Ltd

Sales Director

Saturn Wu