Up to Discussions in Sourcing and Procurement
3 Replies Last post: Jul 30, 2008 6:25 PM by no1toolmkr  
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no1toolmkr
78 posts since
Mar 9, 2007

Jul 25, 2008 12:02 PM

is this a vendor's market?

I'm kinda noticing a trend here. There is an endless suply of buyers.

It's non stop I tell you. as soon as I get something done another buyer is ringing me up. I have so many options I have to turn many down. Don't get me wrong here I'm not complaining. MFG has been an incredible launching pad for me but not all RFQ's are coming from MFG. I've noticed that some buyers actually think they can dictate terms in this environment, NOT!!!

If they got a 5 page document written by their atty. or 60 day terms they can keep right on looking because I've got options and I know it. get your credit card out or pay in 30 days or its the last thing I'll do for you. Can I afford this attitude? Yep sure can. in fact small corps. and regular jo business's are by far easier to deal with and have some great jobs too work with so why even concider buyers terms. I've looked over several of these terms once the first line said industry standard terms and conditions followed by 8 pages obviously written by an atty. I had this job he awarded it too me and all. You know what I did. I called him up and said I'm sorry but your terms are not acceptable please find someone else. He ranted on for the next couple of minutes about how he had all this work he needed to source but finally he said he would find someone else and I thanked him then called another contact and had a job without the head ach terms. WOW!

The reality of it all, its not worth giving 100K in credit to a business that doesn't need it. especially if its going to put you in the poorhouse if they don't pay on time because there is about 100% chance that if they need 60 days they realy need 90 or more. It realy is a vendors market right now so tell that buyer where to stick their term and conditions and find yourself a buyer that has some respect for you. you will be much better off and you won't get an icky feeling when your 90 days out on 100K with a company that has more assets than some nations.

I've told MFG several times that if their buyers have terms and conditions they need to be on the front page of their RFQ because if they spring terms on me after I've quoted it, Its a guarantee I'll turn the job down no matter who they are.


Click to view aschultz's profile Supervisor
aschultz
4 posts since
Mar 21, 2007
1. Jul 25, 2008 5:47 PM in response to: no1toolmkr
Re: is this a vendor's market?
Great post!!! I think this question is truly subjective. With all things being the same, yes, you can pick your buyers all day long if you establish yourself as a high quality manufacturer, who believes in good communication, delivers on time, and maintains competitive pricing. With these 4 pillars that most typical buying decisions are based on....yes, it COULD be a vendor market. But all things are not the same and therefore some struggle more than others.


Certain suppliers deal with more overhead, others have to pay higher wages, some pay higher taxes, and others have to pay shipping fees because the buyers are nowhere to be seen..... now it becomes survival of the fittest. The truly great ones will step up their game and establish themselves by offering more value through specialized services, certifications, and industry niches to compete.

I think that you are in a wonderful position. You have established your business on a solid reputation as a great manufacturer. Hey, next time you tell someone to hit the road, send them back to MFG.com and we'll match them up to the right guy. It's not so much that the market is a "vendor" market, but I think that buyers and suppliers just don't "fit." It's no one's fault really.....if I want valet service at Wendy's, they would tell me to buzz off too even though my money's good. It's just a matter of me going over to the Four Season's where I "fit" in (p.s., I like me some Wendy's! :) ).

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peter
42 posts since
Apr 11, 2007
2. Jul 30, 2008 11:45 AM in response to: no1toolmkr
Re: is this a vendor's market?
My grandfather told me a great story about something like this that happened about 30 years ago. He owned a special tool company at the time, and came into a large Chrysler meeting where they were awarding contracts. They gave a great speech about the future of the company and then lined up the longtime suppliers to hand out contracts at 75% of the quoted prices. When grandpa wouldn't except, they belittled him and said he'd be out of business in a few years without them. A few years later he got to see the work they paid for with another supplier, and he said it broke his heart to see the shotty workmanship compared to the quality he always offered to Chysler. I think he did work for them a few years after that, but the point of his story was to stand your ground for integrity and quality. If you do good work, you'll survive. And according to grandpa, it's worth it.
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no1toolmkr
78 posts since
Mar 9, 2007
3. Jul 30, 2008 6:34 PM in response to: peter
Re: is this a vendor's market?
I'm learning aparently what you grandfather knew a long time ago. It's been a hard lesson for sure. But from now its its my terms screw the custumers. I'll hold the quality down and keep the product right. For starters I'm going to start avoiding quoting PDF or paper drawings unless its simple stuff like 2D.

I've also noticed something else too. even if a company requires some special system like QS9000 or other similar vendor QC. They have a back door everytime. They don't actually require the standard they just wish it. and If the part is right the part is right. numbers don't lie. The buyer will be back for more. NASA has been a steady customer for over 3 years now. they want everything from large weldments to a lunar rover part. They are for sure the best customer to ever want to deal with... they allways pay up front... can't beat that with a stick. Now they don't have a line of production for me but they do have a continuous need for special parts and thats what I do well. I've grown tired of the buyers playing games. I've got one now that thought he could come to my shop while his parts were being made and supervise the manufacture. He found himself looking for another vendor pretty quickly.

His problem with the manufacture of his parts was he himself and how he engineered the machine he was trying to build. Not my guys trying to interpret his crappy drawings. My stipulation for the buyers is make sure their engineering is right on because I have less and less tolerance of screwed up and or incomplete drawings. Rule number one is verify the drawing as best I can for errors and interpretation issues. Rule two is Quote accurately, Rule three is follow though with the manufacture. And No I'm not going to pick up the phone and call if I see something wrong with the drawing. I'm not trying to be antagonizing or anything its just not worth my time to be the bottom bidder then have to call their engineer and talk for an hour about a part about what they want. A drawing is for the sole purpose to convey whats necesary to manufacture the part. If it doesn't It's not my problem its theirs. I think They should get charged extra if I have to pick up a phone and ask them about their drawing.

I'll do wendy's and I'll do four seasons give me those keys i'll park your car or I'll flip you a burger but make it perfectly clear what you want and we'll get a long just famously...

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