A Marathon Negotiation of Quotation
There is always a touching story and an unforgettable experience behind a successful deal. I believe honesty, keeping faith and persistence are the key to success in foreign trade.
Now I am going to share an unforgettable experience of a marathon quotation with you.
It is really unusual that it took a year and 20 days to make a quotation, during which time there had been four huge twists and turns. The number of emails sent and received amounted to 400 while the thickness of all the documents drafted reached half a foot and finally the order of more than $40 thousand was made.
Phase One: Inquiry.
At the end of April 2012, I saw a buying offer from a customer online. The product he wanted was our company's best-selling technological product. As usual I sent an e-mail providing the information of the product to this customer. He replied me soon and asked for samples. This was how the transaction started.
When the customer received the sample, he sent an e-mail praising my timely reply and speedy sending of the samples and showing his satisfaction with the samples and the quotation. And he asked if I would like to see his sample. From his e-mails I learnt that his product was new and was unavailable in our domestic market. Out of curiosity and the thought that the manufacturing equipment and technological level of our company was good enough to produce such a product, so I sent an e-mail asking him to send the sample. In early July I received for the first time the four samples of different sizes made of different material.
I was very excited. And I draw conclusions from this experience as follow:
1. The customer wanted to test the faithfulness of our quotation to see if we were honesty.
2. He wanted to know if we were capable of developing new products and make an accurate quotation.
3. He wanted to decide if my company was reliable enough to make long term cooperation with from the quotation.
Phase Two: making an first quotation.
I measured and evaluated all the subassembly, parts and accessories thoroughly, and made analyses and calculated the cost, and then finally I made out a detailed list of quotation concerning all the components and parts.
In mid August, the customer sent an e-mail to us saying, "Your prices appear to be very competitive on these products. Why is there such a wide discrepancy in price for these products?" He said that our offer was really competitive and he wanted to cooperate with us. Well begun is half done.
But a few days later, the customer sent an e-mail to us saying, "Your price is so high, and the prices quoted by some suppliers from your country are more competitive." What a big blow! After my unceasing contact and questions in October he called us by saying that, "We sincerely regret to inform you that someone came in at better pricing than your company. Again, thank you and I hope to contact you soon with additional items that may be of interest to you." The customer rejected me gently, but the market competition rule that lower prices win made me indignant. What was I supposed to do? Stop contacting them and quit or have another try and persist to win back the customer? I chose the latter option.
I made a careful analysis, and I realized that the price was the main problem. And the price of a product was determined by the material. The only way to reduce the price was to lower the quality of the product or replace new material with old scrap material. Since I had realized it, I thought I should remind the customer of this kind of dishonesty in the industry in case that he would be fooled.
On October 20, I sent an e-mail to the customer: I know that some one's price is lower than ours, but I also know that some suppliers use the old and waste materials to make the items you needed.
I pointed out with emphasis that the quality was more important than the price: So, you must consider the quality of the items while you pay attention to the price. I don't know whether you give the guarantee from some suppliers for the quality of the materials.
In that e-mail I intentionally used the word "GIVE" instead of "GET" to show that I was at his side, and I asked him with a strong tone that if he had been given the guarantee. And the result was totally unexpected.
On November 8 the customer called us and said "Thank you for your persistence. You are indeed correct that the prices we have received do not guarantee the business. He said that they would check the quality of the products from other suppliers."
"If for some reasons they are unable to meet our requirements, you will be our first contact. We sincerely appreciate your continued pressure to give you a second look. It strengthens our resolve to let you be a part of any future bidding that take place." Honesty helped us win the initial trust.
Phase three: negotiation of the price.
By then I was aware that the price was the main issue so I reported to my boss and asked if we could lower the price by 10% to win back the customer actively. After consideration my boss agreed, which greatly boosted my confidence.
I proactively sent an e-mail to the customer informing him the lowered price, and he accepted delightfully at once. He replied on November 14 by saying that, "Please accept my apologies for the delay in responding. We will send out all set items immediately."
As expected, on December 12, he sent the whole set of samples of six shapes, four specifications and twenty-four sizes. And in January 30, 2013 he sent us more than five thousand dollars as the fee for casting the moulds. They asked us to send them the samples back for their checking and confirming. So with the consensus of both parties I won back the initiative of the negotiation that was almost lost in quotation with sincerity and honesty.
Phase four: proofing and checking.
On May 6 2013 the customer called and congratulated me, saying "We have reviewed the items and are very pleased with your products. We plan to place an order with you not later than tomorrow."
On May 12 2013, the negotiation of quotation that lasted almost a year finally was paid off. The customer faxed the first order of 12,000 pieces of products to us, which amounted to $43,000. Before making the contract I succeeded in convincing the customer to close the deal on FOB rather than CIF. By then the negotiation was close to success. As long as the customer signed the contract it was done.
I have been through a lot of such kind of experiences. Generally we need to be really careful and patient when dealing with any customer. We should consider the issues from the viewpoint of our customers under the premise of protecting the interests of our companies. As long as you stick to the principle of honesty and mutual benefits to deal with every customer, I believe that you will definitely succeed in foreign trade.