Wednesday, December 22, 2010

Proceed with Caution in Asking for Lower Price

If you want quality, it comes with a cost. 
Keep in mind, for the majority of the time, especially in the promo, branded, retail merchandise industries, when you tell a factory you need a low price;  that directly translates into “I need low quality”.

The Western mindset:  low price means competitive.  They will offer me the lowest price and the quality will still be great, the print / branding will look nice.  Of course it should function properly and overall will be a great item.

The factory mindset:  low price means cheap and low quality.  We’ll give you a low price and we’ll lower the quality by using an inferior material, using lower capability machinery or even using less skilled workers on the production line.  The print is definitely not going to be as nice, because it will be the lower-cost print facility or lower-end machines used.  Overall, there will not be much of a life span to the product and we’re not sure how well it will work.   

It's the "duh" attitude... 

I can hear the supplier now.  "Of course it's low quality, you wanted cheap price, didn't you?   Duhhh....." (said while rolling the eyes, shrugging shoulders and thinking how naive Westerners are)   

In China;  you get what you pay for.  The prevalent attitude in the country, in doing your normal, everyday shopping is “buyer beware”.  The folks here are not coddled as much by government regulations in the marketplace.  In fact, the stuff exported is a million times better than the stuff that is available to the public.  

Sure, you still need a competitive price …so what’s the solution? 

Option 1:  Send a sample to the factory.  Tell them to duplicate your sample exactly and give the best price possible.  If price is still too high, ask them what quality points on the sample would be compromised to achieve your price.  If you can accept the changes they would make to still reach that acceptable price, then you’re in business. 

Obviously have the factory (on your express account) send you a pre-production or counter sample. 

People in one culture interpret low-price
differently than those of another.
Option 2:  I realize you will not always have a sample to send.  Tell the factory you need a cheaper price but you need these main quality points upheld and not changed.  Perhaps you can agree to a thinner material, but you cannot agree to a worse quality print.  Make that clear.  Tell them what points are concrete and cannot alter.  Provide a bullet-pointed list of quality musts.

There’s other options and thankfully at JLmade, in working arm and arm with the factory (in the Chinese language and face-to-face), we can have quicker and more efficient back-and-forth communication.  From abroad you’re a bit more limited in discovering all options, but it takes thoughtful steps to strive for that price you need…not just blindly and loudly barking to the supplier that you need a lower price, without thoughtful comments on achieving the goal.   

If they can get you a lower price without compromising the big quality standards…then you’re good to go.  Don’t forget the counter sample before you sign off.

Achieving a lower price is always possible.  But achieving a lower price and maintaining needed quality can take time and requires a bit of give and take. 

But keep in mind that only harping on a low price without providing a strategic path on how to reach that goal, will end up costing you more in the end. 

No comments:

Post a Comment