by Jacob Yount
Supplier motivation is invaluable in China importing.
When sending the RFQ, here are 8 flags importers and buyers frequently wave that tell the supplier to "work for free", thus quenching the fire of the supplier motivation.
These broad inquiries are heavy on generalities and low on specifics.
If the supplier is responsible, they may come back and ask the buyer questions, in hopes to nail down some specifications.
It only gets worse when the buyer responds with the classic, “Present us some options”.
“Chop, chop, my minions and get to work!”
An indication of time frame would be letting the supplier know, “Why they are quoting?”
For example –
“If all goes well, we hope to start sampling next week.”
“We hope to bring the order next month if all goes well.”
But without any timing indication or response when the quote is sent, you’ve basically asked your supplier to shoot a quotation into the wild blue yonder of cyber space.
This is when the buyer, in hopes of being professional or savvy on pricing, gives a target price to the vendor.
The trouble is, is this target price forgets the basic rules of mathematics.
It’s not good for the supplier motivation if your figures look like you think their margin is coming from some alternate universe.
If you are going to provide a target price in your RFQ (which I recommend by the way), then make sure you are in tune to some of the basic pricing parameters of your product.
Giving a target price – good
Giving an unrealistic target price – bad
Buyers, when speaking about their own customer or brand manager may say something along the lines of:
“They’re really pushing us for pricing and being annoying. We just have to send them something.”
Or when a supplier asks for more detail, I’ve heard buyers say “I don’t know, we’re not really sure, this job isn’t going too well…”
The buyer, in their internal frustration for whatever reason, express disdain for the project.
Well, if you’re not motivated for the project, guess who else will not be?
“Hey, we’re up against like 30 other companies for this one”.
That says enough.
I covered something similar to this when discussing “Watering Down Your Inquiry” Some buyers make the mistake of giving too many quantity scales.
But another end of the spectrum is giving too high of a possible quantity.
Look, you may very well order a million units or something like that, but those kinds of inquiries do not usually come to fruition off of 1 emailed RFQ. And unless you’ve built a track record of ordering substantial quantity from this supplier, they may not take you real seriously.
If you have a high potential quantity, break that down into a few lower scales in case the large quantity does not hit the pay window.
Supplier motivation whizzes out like air from a balloon when you request 100,000 units and end up ordering 20,000 units.
This could be items that do not exist, require extensive development and items that do not necessarily or directly fall into the supplier’s line of expertise.
“Hey, we’re looking to quote an item that takes high development, tooling, and lots of time. But we’re not even sure we are going to order. Can you spend some time analyzing everything and then put some effort into a precise quote.”
These kinds of inquiries usually get ignored.
This may be cutting someone to the quick, but if you inquire over and over and never actually close anything, the supplier is not going to really be holding their breath thinking FINALLY, this is the big one.
You want to be careful not to exhaust your resources.
If you find yourself quoting over and over again without closure, it may be time for plan B, i.e., using previous quotes and estimating them to fit the time change.
Make the RFQ “pack a punch“.
Whether it comes to an order or not, keep your vendor updated and remain professional.