Folks,
Has this ever happened to you: a customer that’s unknown to your company sends in a RFQ via your website. They may be from across the country or across the world. You review the request and say “what the heck, let’s throw a really high price against the wall and see if it sticks.”
I’m willing to bet lunch that it has… And why not – it’s human nature. The potential customer doesn’t know you, you don’t know her – lets give it a try. Maybe they don’t know the market conditions and will bite at your high price and you’ll have a fat margin sale to offset all of the low margin work that you’ve had to giveaway in lean times.
With the proliferation of web based selling portals, we are seeing more and more cases of “The Stupid Price” occurring. The buyers and sellers are more or less anonymous to one another, they likely don’t talk to each other, it’s impersonal, so why not try to hook a whale?
We also see plenty of Stupid Prices at the low end of the price scale. The psychology of the seller is to tantalize the buyer with a really low price and then pile on adders and price extensions once the customer approves the quote and samples.
In either direction, The Stupid Price wastes your time and costs you money. Either you pay too much, or you expend a lot of effort time and money to extract yourself from a bad supply relationship and find a new vendor.
We strongly advocate “Knowing Your Supplier.” That means relying on old fashioned leg work: calling candidate vendors; asking for references; performing an on site audit before committing to buying anything; and having a clearly written supply agreement in place. We know it’s not rocket science, but it’s the way we work for our clients.
A Great Logistics Resource
If you need assistance navigating the complexities of international logistics, please consider talking with our friend David Ross of Ross Global Trade Solutions, LLC. Dave makes the tough stuff easy.
Ross Global Trade Solutions, LLC
1 Rolling Green Drive ‖ Cumberland, RI 02864 USA ‖ +1-401-334-2130 ‖ www.rossgts.com
Cheers,
Jack Daniels
+1.617.285.2486
www.EB-INTL.com
