Dealing with suppliers...
Discussion
Just wanted others views on suppliers and price increases.
I deal with the far east and placed an order 8 weeks ago for some goods. 4 weeks from delivery they want to up the prices by 12%. The pro forma has been agreed and signed so cant really see how they can just decide now they want to change the price?
Has anyone had experience with this how would you respond to their request?
I deal with the far east and placed an order 8 weeks ago for some goods. 4 weeks from delivery they want to up the prices by 12%. The pro forma has been agreed and signed so cant really see how they can just decide now they want to change the price?
Has anyone had experience with this how would you respond to their request?
Have you paid the Proforma yet? this has never happened to me but would imagine it is a legally binding contract however the chances of them agreeing as they are in China are limited somewhat.
What is your trading history like with them.
Depending what it is maybe get other prices and walk.
What is your trading history like with them.
Depending what it is maybe get other prices and walk.
Its hard as we have a very good relationship with them and have been dealing with them for some years. We cannot just walk as they make products just for us.
We pay on delivery of the goods so we have just pro formas at the moment.
I know its hard but its hard here too. I also think that when the Dollar is high they dont give us a discount so why should we pay more when it drops?
We pay on delivery of the goods so we have just pro formas at the moment.
I know its hard but its hard here too. I also think that when the Dollar is high they dont give us a discount so why should we pay more when it drops?
All I can say is this is one of the reasons China is cheap.
You don't have the easy legal recourses as you would do in the UK.
My best advice would be not to worry about whether they *can* do this but what you are prepared to do about it. If you are still making a healthy profit, then maybe suck it up. Alternatively pass the price increase on though your prices.
The only other option would be to negotiate with them to have the price stay as agreed for this order, however applied to future orders.
It all depends on whether you have the hidden 'stick' to weald on whether you can just call their bluff and walk away...
You don't have the easy legal recourses as you would do in the UK.
My best advice would be not to worry about whether they *can* do this but what you are prepared to do about it. If you are still making a healthy profit, then maybe suck it up. Alternatively pass the price increase on though your prices.
The only other option would be to negotiate with them to have the price stay as agreed for this order, however applied to future orders.
It all depends on whether you have the hidden 'stick' to weald on whether you can just call their bluff and walk away...
We have called suppliers bluff in the past and turned us down... Nowdays they seem to not need the business like they used to.
We used to dictate the prices and and spec to them and they seemed happy to do it as they would do anything to win the business although thats not the case these days!
These are a good supplier so may suggest spliting the difference...
We used to dictate the prices and and spec to them and they seemed happy to do it as they would do anything to win the business although thats not the case these days!
These are a good supplier so may suggest spliting the difference...
China's economy will suffer due to the economic down turn (like anywhere) especially as its not as economical to buy from China as it was 12 months ago, as you know China for the most part trade in Dollars.
China like any business are open to negotiation, instead of sending them faceless e-mails, put them on the spot and call the manager and thrash out a deal, i might be telling you to suck eggs here but you get my drift.
China like any business are open to negotiation, instead of sending them faceless e-mails, put them on the spot and call the manager and thrash out a deal, i might be telling you to suck eggs here but you get my drift.
Broccers said:
sam.r said:
I do try and distant myself from being too friendly... I find it helps in times like these.
Seems it didn't stop them raising their price ? Do you pay up front or on 90 days ?
We are still trying to sort this out - they want to, we dont want to.We pay on receipt of the goods in the UK.
sam.r said:
Broccers said:
sam.r said:
I do try and distant myself from being too friendly... I find it helps in times like these.
Seems it didn't stop them raising their price ? Do you pay up front or on 90 days ? We are still trying to sort this out - they want to, we dont want to.We pay on receipt of the goods in the UK.
I dont know anyone who gets 90 days - i'm sure some bigger firms with bigger buying power do though.
sam.r said:
No, thanks for your advice. I know the owner well as he visits us alot however I do try and distant myself from being too friendly... I find it helps in times like these.
I can understand why you do this but sometimes this can be a disadvantage.I would contact him directly and be firm but friendly, point out how much you spend and how long you've been trading and want to continue your excellent business relationship and ask how we can work together to reduce this cost as increased costs incurred make you uncompetative blah de blah.
Again not telling you how to negotiate but personally thats how i'd approach it.
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