This may shock you but it comes from my experience working more than 25 years with Chinese companies and I want to share it with you. I promised to help you to avoid trouble and prices are part of it.
Change Happens
How can this happen? You have prepared your shopping list. You gave your supplier all the requested information and now a big change comes along.
There are several reasons for changes.
- It can and will happen that the product that you found at the suppliers both, will be dropped by them for lack of customer interest. If you are the only one who showed interest, it may not be sufficient for the factory to invest in expensive tooling.
- The price quoted to you was based on old material costs. Think of the oil price that is now at US$ 110.00 per barrel. That makes the cost for all kinds of plastic materials more expensive. If other raw material have also increased, the factory has no choice but to increase their price even if they had previously quoted you a lower price. The profit margins for the factories have become slimmer and slimmer and they can no longer afford to make compromises on their cost.
- The price they quoted to you was from an incompetent person and the price was later revised by their supervisor. Yes, there are at times incompetent people at supplier booths who don’t want to lose face by telling customers that they cannot quote a binding price.
- Another reason could be that the product you showed interest for infringed on copyrights and the factory was forced to drop the product.
Confirm the Price
The best way to avoid pricing problems is by sending the supplier a confirmation e-mail (even from your hotel) with a request and the quoted price so they may reconfirm it in writing. If there was a misunderstanding, your supplier can still reach you by cell phone before you return home.
If there is not enough time, you must reconfirm the price immediately after you return home. Your business depends on valid quotations or you could be in danger of losing money.