A buyer opens the quote sheet, their eyes immediately float to the price per piece and they see a high price. “Sigh, the search continues for a quote. Was hoping that supplier would work out, but they gave me a high price”. They close the sheet and continue searching and shopping about. Frustration plagues the process. But before you write off a supplier based on a “high price” here are 4 considerations to ponder.
Your RFQ may lack critical detail
The initial inquiry you sent to the supplier may be lacking.
What’s missing may be the piece of the puzzle the supplier needs to understand your quality expectation.
When there’s sufficient detail inside of the RFQ along with accompanying images that show the supplier what’s expected; they have a clearer idea on the proper price range.
Did you include a clear spec sheet or bullet-point list that describes the item? Sometimes the necessary information is something as basic as saying, “the item should be like this, not like this”.
Attach helpful images that give the vendor a point of reference.
Before you send your RFQ, ask yourself, “did I include all necessary components that will lead to a favorable price?”
Did you inform the vendor your expected price range?
Sometimes it can be something as obvious as letting your supplier know the price you need.
If you give the vendor the price you need, in other words, the target price, this can be great illumination.
They may come back with options such as “here is the price for this level of quality and here is the price for another level of quality”.
High price may simply be because supplier misunderstands the inquiry
Did the supplier include something that you didn’t ask for? Maybe they’re seeing the product inquiry one way but you’re seeing it another way.
This sort of misunderstanding or “not being on the same page” is especially relevant when you’re developing a new product.
Also keep in mind that you may be considering the product to only need a small tweak, but to the supplier, it creates an extra process level.
Find out if there’s an existing stock option before you move to customization.
Your own request may add on a cost level that’s not absolutely necessary. In other words, you asked for a custom option, but the supplier’s own stock option may work fine and keeps cost down!
To sum things up…
Don’t write off a potentially good vendor because of the initial quote. If it seems like a high price, figure out why. Chinese vendors like to discuss and hash out price quotes.
Buyers miss out on strong possible factories because they overly focus on an initial number instead of long-term sourcing strategies.