How to ruin relationships with your suppliers

***

The day is coming to an end and it’s time to load up. My customer asked if I could deliver these goods straight to his house. I don’t do this too often but business is quiet and every dollar counts. The rain started to pour ss I loaded up the goods, and it was getting heavier too.

The rain got worse as I pulled up on his driveway. I unloaded all the bags and rang the bell.

No one answered.

I tried again, same thing. Silence.

I called his mobile, then sent him a text message. No reply whatsoever.

After almost half an hour trying out the bell, the phone, and more text messages I gave up. He’s not interested in getting these goods despite his numerous remarks of ordering in bulk, growing his business, and so on.

Customer is king, they said. Not this time, this customer is just a waste of time.

***

In the world of entrepreneurship, the word ‘hustle’ seems to be the new trend. Those dreaming of becoming business owners often call themselves ‘the hustlers’. It sounds a lot like one of those Marvel’s superheroes. The problem is off course when these ‘hustlers’ try to hustle everyone in everything. Then they become ‘the shushed’ because no one wants to deal with them anymore.

There is nothing wrong with hustling, it will come naturally anyway after spending few years in the joint. You begin to notice that other people also try to hustle you, some are very subtle (pro) while some are dead obvious (beginner). Some just have no idea what they’re doing and they become what is widely known as ‘trollers’. Avoid these trollers at all cost because they bring nothing but destruction. If you’re lucky enough you can send them (trollers) to your competitors and let them do the damage there.

There is one entity you don’t want to hustle yourselves out of the market. It is your own supplier, especially the good ones.

It might seem counterintuitive since you being the customers, you should be the king, right?

Wrong.

In the world of business, no one is king. We all work together, providing different products and services. Only through a carefully crafted collaboration between suppliers, you, and customers (yes, customers too) that a business can truly survive, and prosper.

Try hustling your supplier too much and the triangle will break. Break the triangle and you break your business.

If the following items are in your to do list when dealing with your supplier, it’s not a bad idea to re-think them:

  • Pay late on purpose to maximise cash flow
  • Demand as much services as possible
  • Play the pricing game at all chances
  • Always try to buy in small batches instead of in volume to reduce cost

Show your supplier that you support them and you are in the game with them for long term. You will be amazed by the amount of support they will give back to you.


Did you enjoy the short article? I also send a dose of perseverance every week for free. Join me to get your personal supplies. (hint: click here to get them) — Fredy Namdin


When to rip off your customers?

It was a cold morning and there was no single message on the phone. I checked the fax and email, nothing there either. Such economy, mining downturn, order was drying up. We had fought a good fight, but how long could we last? There must be something we could do to improve our bottom line.

The phone suddenly rang.

“Hello, is this Envignco Supplies?”, the voice from the other side asked.

“Yes, how can I help you today sir?”, I replied.

“I am looking for a certain chemical, it’s called HDX”

“Yes, we stock that, do you want to know our price?”

“Please, and if you have stock as well. I need it urgently”

You see, HDX is one of those chemical that is widely available. I wasn’t sure how on earth this guy came upon our company and decided to ring. I thought to myself, should I add extra 20% to improve our bottom line a little bit? Or should I give him our normal price? I mean he needed it urgently so there’s a good chance that whatever price I said would lead to a good sale. Should I take the window of opportunity and rip him off?

Decision..decision..

For many people in business, pricing is often the deciding factor in closing a sale. It is however also the deciding factor in determining whether a business is profitable or not. Price it too high and you loose the sale, price it too low and there is not enough money to pay the rent, staffs, and so on.

Every now and then we got the opportunity to charge much higher than we should. We believe it’s ok, because we can, but the big question is off course – should we?

It is no doubt certain companies are able to charge enviable margins on their products. Some because they are the only companies with those products with no immediate substitutes in the market, some other because they dominate and corner certain market. So what is the problem then? Isn’t it good to make fantastic profits? What’s the deal here?

Unless your company has enough resources to dominate the market there is no chance you could even come close to charging extraordinary margin. There is a certain price point that you need to be. Any upward movement from this pricing point will mean you have priced yourselves out of the market. In other words, you have no business. Price it too low and you invite price war which will lead to annihilation of you and your competitors, at least in the particular products that you are competing in.

More importantly – it is your brand. Rip off enough customers and you will be known as that – a company that rips off its customers. Is that how you want to position yourselves in the market?

What about those little instances where you know you could get away with it?

This is rationalisation. The question you should ask yourselves is could you really get away with it?

Maybe you couldn’t get away with it. Maybe no one could. You might get the sale and make handsome profit, but with what repercussions? On the other hand, what are the benefits of disciplined competitive pricing?

Which one would you prefer:

“Long term gain, short term discipline” or “Short term gain, long term destruction” ?

 


Did you enjoy the short article? I also send a dose of perseverance every week for free. Join me to get your personal supplies. (hint: click here to get them) — Fredy Namdin