Where do I stand.. supplier going back on their quote..
Discussion
I received an enquiry from a new client for 200 units of a particular product I supply as a re-seller, it's a much larger quantity than I normally supply of this product in one go and so I went to a number of my trade suppliers for quotes..
One supplier came back with a very good price but since they claim to be the cheapest supplier to the UK of said product I didn't really think too much of it.
Based on the price given by my supplier I went back to my client with a quote and a few days later they have agreed to the order, they have paid me their invoice and all the other necessities are in place to process the order with my supplier.
Shortly after I've confirmed the order with my supplier they have come back to me to say there was a mistake with the original cost and that they had only priced for 50 of the units, not 200.
In my suppliers written quote they have specified 200 units and the spec requested.
They are now coming back to me to say the figure should actually be c. 4x the amount, but I have already agreed the price with my client on the original cost.
Do my suppliers have to honour their original price?
Their price must have been hugely lower than others, did that not ring a few alarm bells? I'd be up front with your customer and say its money back/apologies for this or here is the actual price you can do.The supplier isn't going to supply you at 25% of their cost unless you're a big customer of theirs, which it sounds like you're not.
As already said, the quote (based on only 50 of 200 units) must have been extraordinarily low, compared to the other quotes that you obtained for the full 200 units. How did the quotes compare with your expectation of what the cost would be, seeing as you already sell these items?
If you can't make the numbers work, then the best policy would be to be honest & upfront with the customer about the error in pricing.
Whilst here, you might want to have a look at your phone number on both of your websites, as it is not correct.
If you can't make the numbers work, then the best policy would be to be honest & upfront with the customer about the error in pricing.
Whilst here, you might want to have a look at your phone number on both of your websites, as it is not correct.
Edited by Mandat on Thursday 18th January 17:41
I certainly wont be their biggest customer but I have been ordering fairly regularly from them over the last 3 or so years, no contract in place, I just have an account with them, it was my 'Key Account Manager' who prepared the quote.
As far as the difference in price compare to other quotes, I didn't think it was completely unrealistic given I know the cost of the 'raw' materials for the product. There were also a few exchanges back and forth on the quote for the product and different versions of it for the same quantity, so how the error wasn't picked up before I do not know.. I even pointed out at one stage that I thought there was a mix up between two prices and product versions.
The phone numbers are correct on the websites, but having just called it OOH it does appear that the automated message is not correct so I will get this fixed, during office hours calls are always answered. Thanks for highlighting this though, I've never called myself OOH.
If the supplier to you did genuinely make a mistake and the quote is only 25% of what it should have been then i would have thought it's something that would/should have raised your eyebrow.
If you agree that they'd made a mistake then i think that the contract which on the surface may exist (offer and acceptance) is voidable as you accepted when you suspected the supplier had made a mistake.
Depends how much you value the supplier and/or the customer on how to take it next...... If you do value both it may be worth sitting down with the supplier to agree how you can both manage the situation with the customer, if you don't value the customer but do value the supplier then you'll have to cancel the contract with the customer or if yoh value the customer you're in for a fight with the supplier.
If you agree that they'd made a mistake then i think that the contract which on the surface may exist (offer and acceptance) is voidable as you accepted when you suspected the supplier had made a mistake.
Depends how much you value the supplier and/or the customer on how to take it next...... If you do value both it may be worth sitting down with the supplier to agree how you can both manage the situation with the customer, if you don't value the customer but do value the supplier then you'll have to cancel the contract with the customer or if yoh value the customer you're in for a fight with the supplier.
Lexual said:
The phone numbers are correct on the websites, but having just called it OOH it does appear that the automated message is not correct so I will get this fixed, during office hours calls are always answered. Thanks for highlighting this though, I've never called myself OOH.
You misunderstand, the number are incorrect on 2 counts;1. The London area dialing code is 020.
2. London phone numbers are 8 digits long, not 7.
Mandat said:
You misunderstand, the number are incorrect on 2 counts;
1. The London area dialing code is 020.
2. London phone numbers are 8 digits long, not 7.
Depends on how much of the history of london phone numbers you know/remember; for decades they were xxx xxxx, then they added a 01 for "London", then they changed it to 0207 for "inner/central London" and 0208 for "outer London".1. The London area dialing code is 020.
2. London phone numbers are 8 digits long, not 7.
So if people remember the days of xxx xxxx they will naturally think of the number as xxx xxx xxxx.
Lexual said:
I certainly wont be their biggest customer but I have been ordering fairly regularly from them over the last 3 or so years, no contract in place, I just have an account with them, it was my 'Key Account Manager' who prepared the quote.
As far as the difference in price compare to other quotes, I didn't think it was completely unrealistic given I know the cost of the 'raw' materials for the product. There were also a few exchanges back and forth on the quote for the product and different versions of it for the same quantity, so how the error wasn't picked up before I do not know.. I even pointed out at one stage that I thought there was a mix up between two prices and product versions.
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No, there is a contract in existence I don't think anyone will try and argue there isn't.As far as the difference in price compare to other quotes, I didn't think it was completely unrealistic given I know the cost of the 'raw' materials for the product. There were also a few exchanges back and forth on the quote for the product and different versions of it for the same quantity, so how the error wasn't picked up before I do not know.. I even pointed out at one stage that I thought there was a mix up between two prices and product versions.
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The question is whether the supplier is potentially going to breach the contract by failling to supply or whether they are able to void the contract due to their mistake.
I can't remember the points/conditions/definition to mean that the contract is voidable due to mistake but iirc it's something around it being pretty apparent that there was a mistake.
IANAL but i think from what you've said you accept there was some confusion over specs/quantity/versions/price so although you accepted their offer you're not shocked to now learn they'd made a mistake.
I still think it comes back to who's more important to your ongoing business the supplier or the customer.
I agree with others' comments here; a quote at what must've been 25% or less than other suppliers' quotes should've prompted a query. I've done exactly this with suppliers before; received a quote that seems far lower than anticipated and immediately gone back to them to say, "... are you sure?". Occasionally they've screwed up the price or quoted for the wrong product.
If you can't get the supplier to meet the quote (and I suspect you won't) then you'll need to walk it back with your customer explaining why unfortunately.
If you can't get the supplier to meet the quote (and I suspect you won't) then you'll need to walk it back with your customer explaining why unfortunately.
I suspect that you will find that their quote has the 'errors and omissions excepted' clause somewhere and is used for instances such as this.
They gave you a price in good faith which subsequently has been found to contain an error (qty = wrong) in your case.
The onus does lie with you to apply your industry knowledge and skill when receiving a quotation and apply a 'sanity' check.
As already mentioned a quote that is out of the ballpark on price should warrant a confirmation check from the supplier.
As most quotations are now computer based, it's easy on some systems for finger trouble and 'copy and paste' errors to arise but still produce a professionally presented quotation.
Probably not what you want to hear however.
They gave you a price in good faith which subsequently has been found to contain an error (qty = wrong) in your case.
The onus does lie with you to apply your industry knowledge and skill when receiving a quotation and apply a 'sanity' check.
As already mentioned a quote that is out of the ballpark on price should warrant a confirmation check from the supplier.
As most quotations are now computer based, it's easy on some systems for finger trouble and 'copy and paste' errors to arise but still produce a professionally presented quotation.
Probably not what you want to hear however.
I'm not sure the E&OE would really apply in this situation, it's not like there was a slight mistake in the product description, or a slight error in size for example that would affect the price quoted by a small percentage.
They quoted the product and quantity exactly as I had requested, the error in the quote I mentioned earlier was that they had just got the prices the wrong way around on two versions of the product, ie they put the more expensive price against the cheaper product, and visa-versa, so it wasn't anything to do with me thinking the prices seemed massively lower than other quotes.
They gave me 3 quotes for 3 versions of the product and all were in a price range that made sense, by that I mean it wasn't like there was a massive jump between the prices which would have flagged up there was something amiss like they had quoted 50 units on two options and then 200 units on the third.
The fact that they prepared the different quotes on different occasions and still didnt realise they had made a mistake is what gets me, or that my key account manager doesn't know his product well enough to think himself that something didn't look right.
Anyway, a couple of emails, and not very happy phone calls from me and they went back and adjusted the quote.
I placed the order with another supplier.
the client is getting what they requested at the price I originally quoted them, I'm more interested in keeping them happy.
Thanks for the replies.
All sounds odd to me, let's call your normal buying price £1, and say you sell at £1.50.
But now you want 200 not 10, I'd guess at best you may get them for .80p in bulk.
Would you have sold them on at less than your normal buying price? ( I wouldn't have)
And now the mix up, it sounds like they quoted.22p or thereabouts and you didn't smell a rat!
But now you want 200 not 10, I'd guess at best you may get them for .80p in bulk.
Would you have sold them on at less than your normal buying price? ( I wouldn't have)
And now the mix up, it sounds like they quoted.22p or thereabouts and you didn't smell a rat!
Marcellus said:
Depends on how much of the history of london phone numbers you know/remember; for decades they were xxx xxxx, then they added a 01 for "London", then they changed it to 0207 for "inner/central London" and 0208 for "outer London".
So if people remember the days of xxx xxxx they will naturally think of the number as xxx xxx xxxx.
Close but London numbers were never "0207" or "0208".So if people remember the days of xxx xxxx they will naturally think of the number as xxx xxx xxxx.
The original 01 code was split to 071 & 081 in 1990, and in 1995 an extra digit was added to make 0171 & 0181. The current unified dialing code "020" was introduced in 2000, at the same time as London number increased in length from 7 to 8 digits long.
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