Who won pricing battle?
Constantine Chen
22K+, Marketing Manager at OME International Limited, TS16949 iso13485 certificated
A few weeks ago,I got an inquiry from United State,the buyer requested best prices for the mold and the plastic units for his new project.After quote sent for a week,I looked back and asked how did he like our quote,what I got from him was our prices were too high comparing to other chinese mold suppliers,mold cost was twice as much and he unit price was 30% higher.Well,when he told me our mold cost was twice as much,of the same cavities,then actually I knew who I was facing in competition,and for sure,what kind of quality the mold could be based on their quotes.Deep down we knew that 50% off could not afford P20 for moldmaking as this is a medium size one,you probably know what this meant.
Normally I would not upset about our unit prices,but he said our unit price was 30% higher than others.
It cant be.It made me feel bad and my mind stucked in reverse.Later on I sent him the pricing list which was made by our professional pricing engineer,every single detail was listed on the sheet,including equivalent plasitc cost,scrap waste,molding cycle time,injection molding cost,labour cost,packaging cost,net profit.Our pricing was crystal clear,we barely profit from the mass production.Yet,he did not seem to care.
How could we cut 30% off possibly?
Not likely we could.The sheer reason could be electricity was too expensive,those molding machines to run mass production are highly automatic in order to reduce manual labour,once all is set successfully,there will be no guy guarding the press,the last thing you need to do is to take sampling detection and measurements and pack the units
Labour cost is always higher than electricity cost in molding as far as I know,perhaps we really need to improve our presses.
Something went wrong but you just couldnt tell him.
The last thing I wanted to do was to find that supplier out and let him manage our mass production orders,then we will be rich,but we have never found that guy.
Thank you for your time.
C.C
Board Member, Capstone Capital LLC, North Carolina, USA.
7 年Focus on your core competency and values buildup no matter how much your competitors quote.
Area Manager Centro Sud Italia – Cooling Systems
8 年What can we do? This is an old story...
Branding and Marketing Specialist
8 年It always makes me smile to see someone attempt to shave money off a product. If you did the same in reverse you would see that they don't practice what they espouse. Take a look at the entire picture, and look at how you can shave only so much money before you end up with an entirely different product. Purchasing managers should understand the big picture, if not they are only dealing with numbers, as nothing good will be the outcome.
China Business Consultant, Interpreter, & Founder of Sunny Business Consultation.????♀?I help companies efficiently navigate China-related challenges by providing tailored solutions for their needs.??
8 年An enquiry got to me this May. The 1st offer to client,he said much too high,then no reply any more. I tried to make him back to me,it worked,project continued,everything fixed about 2months later except for the price,the price is 19.5% higher compared with the target price from client,and no one can make any concession any more,so...failed finally. Price is everything when client thinks so.