How to deal with a customer who takes advantage of your quote ?


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    Default How to deal with a customer who takes advantage of your quote ?

    Just took over a company where I've worked for a long time.
    Now I have to deal with the business side I never wanted.
    Although I've changed the name of the company, I have honored (for now) all previous quotes.
    Come to find out one customer constantly sticks it to me based on the old quotes.

    Example:

    qty 50= $1.50 / ea

    qty 100= $1.10 / ea

    qty 250 = $0.95 / ea.

    Then I get a PO for qty 250 at $0.95 spread out over five delivery dates like six weeks between each.
    This purchasing agent is no rookie and as a customer my business with them is shrinking due to
    their product line saturating the market. I informed them all parts will be re quoted going forward.
    Also, their AP department often pays after 10 days but takes our 1% / 10 , NET 30.

    My question: Does anyone use a boilerplate, non-offensive, line in their quotes that says these are not blanket order prices? (Actually that sounds pretty good)
    Any others?
    TIA

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    Registered Jim Dawson's Avatar
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    Default Re: How to deal with a customer who takes advantage of your quote ?

    Maybe something like '' This quote is good for 30 days, product not scheduled to be shipped in 30 days is subject to a xx% price adjustment''

    A quick story. I did about 500 pieces for a customer at $1.80 each, he wanted 120 of them shipped in 30 days. I still have the balance (along with my profit) sitting on the shelf for 2 years. The good news is that the 120 pieces covered my cost for materials.



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    Default Re: How to deal with a customer who takes advantage of your quote ?

    Add wording that price per part is calculated/adjusted based on single delivery order quantity at time of shipment.
    Partial deliveries, at customer request, are subject to a service charge. Base that charge on your setup time for all operations and overhead cost to process a split order.

    Also make sure to add a PO cancellation policy in your quotes.

    Kick that customer to the curb as soon as you finish their last open PO. They will forever be a problem that eats at your financial and mental bottom line. To many great customers out there to have to deal with these problems more than once.

    Rob


    Sent from my SAMSUNG-SM-G900A using Tapatalk



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    Default Re: How to deal with a customer who takes advantage of your quote ?

    When I quote any job, I always put "Quote valid for 30 days." Then they need to re quote and we also will not split an order over more than a 30 day period.

    HTH

    Gary



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    Default Re: How to deal with a customer who takes advantage of your quote ?

    I personally feel like splitting an order is a horrendous idea in the first place. If I am going to cut 500 pieces for you, and you want 250 now, 250 in six months, either you order 250 now and order the rest later, or you pay for it all before I even open my CAM software.

    Sent from my SM-G935V using Tapatalk



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    Default Re: How to deal with a customer who takes advantage of your quote ?

    Although my response is dated, the answer is simple. The customer's PO is incorrect. If you say 250 items then you will be billed for 250 items. Otherwise, why not order a million units scheduled over the potential life of the company? Get rid of that customer or take my customer's that try to play that game with me. When I get creative PO's, I immediately change that customer to COD.



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    Default Re: How to deal with a customer who takes advantage of your quote ?

    I would not wait for future jobs I'd mail them out a letter stating something like.

    Do to the change of ownership we have implemented new polices, effective immediately. All p.o.'s will be charged based on each individual delivery quantity. If different delivery dates are combind to obtain high quantity pricing the entire p.o. must be paid for 15 days after 1st delivery. We will be happy to hold delivery on remaining quantities and deliver them on scheduled dates.

    Remember now that you own the company you can change policies as you see fit. Don't let customers dictate how you run your business, they are not looking out for your best interests, but their bottom line.



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    Default Re: How to deal with a customer who takes advantage of your quote ?

    Tell him your business is not the business who issued the original quote. You are a different legal entity. Provide him with a quote 5x what was quoted previously with conditions that its valid for 14 days with no split deliveries.
    You now own the business. That gives you the right to choose the customers you want to deal with. If someone wants to be a bastard to you, then you apply a bastard tax so if he still wants to work with you, its worth your while. If he takes the quote the first time and remains a bastard to deal with, double the price again on the next order. When he leaves, you will have more time to deal with the customers who want to pay your price and you will be more profitable.

    Rod Webster
    www.vehiclemods.net.au


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    Default Re: How to deal with a customer who takes advantage of your quote ?

    Very simple. You do not need to accept every PO you get. If it does not meet your terms let them know what terms you will agree to. If they are taking the prompt pay late make it clear that it is from the date on the invoice, not the date they receive it. Send a statement showing that the prompt pay was not applied and let them know they have a ballance that needs to be paid.



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    Gold Member Bob La Londe's Avatar
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    Default Re: How to deal with a customer who takes advantage of your quote ?

    Talk to the purchasing agent. Tell them you will give them that price and charge for actual individual shipping only if they pay for the entire order at the first invoice. If they have to pay for it upfront then it probably won't take up shelf space in your shop for very long. As to the discount, look at the post marks. Go from there. If its within a day or two let it go. During our recent economic down turn I had dozens of big commercial customers all of a sudden tell me their policy was to pay in 60 days and demand all kinds of extra terms and conditions to remain a vendor. These were all customers under contract. Most vendors agreed, because, they could not afford to lose the business. There were articles about this phenomenon in business publications claiming this was the new normal. I flatly said no, and only lost a couple customers. None were big customers for me. Most were big businesses who were doing very little business with me. Some just paid in 60 days anyway, and I charged them my contracted late penalties and they paid it or got service cancellation notices. Most paid the penalties and just continued to pay slow. My big customers all stayed with me.

    Anyway, you need to talk with the purchasing agent. If he is that cheap you know he has shopped you around. He has some room to give or he wouldn't still be with you. Do the humble, "I'm sorry, but I just can't afford to give you bulk pricing and not be able to make them as a bulk order. I'll be glad to shelf them for you upto (XX) days so you can have bulk pricing if you pay for them all at once upfront." Its like the companies I described in the paragraph above. You don't know if it will fly unless you try. It just might.

    You are going to have to get them to give somewhere sooner or later, because materials are always going up.

    Bob La Londe
    http://www.YumaBassMan.com


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How to deal with a customer who takes advantage of your quote ?
How to deal with a customer who takes advantage of your quote ?