Folks,

At EastBridge Engineering (www.eb-intl.com) we have an operating principal that guides us when discussing new product development and engineering projects: ‘First We Look At The Purse.’

[With admiration and attribution, we’ve adapted the title of the classic Contours song ‘First I Look At The Purse’ a hit in 1965 at #12 on the R&B and #57 on the pop charts, later popularized by the J. Geils Band.]

This doesn’t mean that we’re scoping out our clients ability to pay our fees (though we do prefer clients that pay…). What it means is we will always ask our clients “what’s your target price for this product.”

Understanding what you’re planning or willing to pay for a product is key to the supplier identification and negotiation process in Greater China. When we survey and then contact the available pool of vendors, three elements come up in our conversations:

1. Are the supplier’s manufacturing, production capacity and QA capabilities a match for our client’s technical requirements.
2. What’s the EAU (Estimated Annual Usage).
3. What’s the target price.

When talking with candidate contract manufacturers, we can save everyone a lot of time and money when we know your target price. Following the rule of Three:

1. Many vendors will refuse to provide us a “blind quotation.” When we present them with the target price, it speeds up the quotation process enormously.
2. There is no down side to sharing your target price with us. From the get go, we operate under a time-and-materials business model. We don’t take a commission or mark-up on the sale of your new product. We’re motivated and incentivized to negotiate the lowest price possible.
3. The staff at EastBridge are skilled at estimating product costs. If your initial target price is too high, we can guide you to a better (lower!) price. If it’s too low, we can pull up on the handbrake and tell you to stop wasting time and kill the program.

So, the contract manufacturing marketplace in Asia isn’t a giant used car lot populated with sales rats dressed in plaid sport coats. Having your target price ready and in the can makes the supplier validation and quotation process much smoother for everyone.

Cheers,

Jack Daniel

+1.617.285.2486

jack.daniels@eb-intl.com