A Distributor Asks: I recently told a client of 10 years that we needed to hurry along or risk losing stock on an order. The client wanted the order to be delivered in a month, so a deposit was required. To avoid paying the deposit, the client went to a retail chain that sells office supply products and found cheaper prices on half of the items quoted, which would bring the order from $25,000 to under $9,000. I want to express my disappointment on this outcome, considering the time and amount (we’ve spent hundreds in samples for this client) we have dedicated to this project. How would you move forward on this?

 

I question if it’s “apples to apples” as we know that something can look similar but be very different. For instance, tumblers can be single-wall and snap-on lid with a straw and you may have quoted a double-wall screw-on lid. Maybe go back and see if you quoted products that could have a cheaper counterpart. I would tell them not to assume it’s the same. This logic has saved orders while the client receives what they wanted or have seen.

Adrienne Barker, MAS
Supplier Representative
Le Tour de Spice
Daytona, Florida

Any time you find yourself willing to be held hostage by a client over inventory or price, you are already losing. Price wars are a race to the bottom, and unless you draw the line, you’ll end up without profit and without the customer anyway.

Art Remsik
B2B Marketing Consultant
Arts Ads
Peoria, Illinois
PPAI 103148, D12

I definitely would not lower my price. It’s very likely they will not get the level of service and the discounters generally seem to screw stuff up in orders at a high rate. You should never be in a position where a company dictates how you run your business. Did you provide a fair and honest price from the start? Are you willing to lower your standards, ethics and integrity? Because it sounds like that is what the customer is wanting you to do. It’s painful, but if they are heavily shopping you at this point, it sounds like this will be a repetitive situation. 

Chris Pollan
President and owner
Pollan Promos
Starkville, Mississippi
PPAI 276409, D2

You need to do what’s right for your business. When someone shows you how they want to work (by shopping items you sourced) is that really your target customer? Only you can answer that.

Other things to consider:

  • Is the long-term value of this customer worth it?
  • Do I want to set a precedent that I’ll be forced to deal with going forward?
  • Is the revenue from this one order make-it-or-break-it for my biz?

Vickie MacFadden
Owner
PROMOrx
Greenville, South Carolina
PPAI 396628, D3

Instead of lowering your price, say something along the lines of: Our prices reflect the services we provide that [retail chain] does not, including discovery about your needs, researching products that fit your needs and your branding, and saving you valuable time so you do not need to do the research and product- matching  yourself. 

Don’t lower your price or they are going to price-match you on everything. Instead, tell them your worth and why you are worth what you charge.

Danielle Lum, MAS, MASI
Senior Brand Strategist
American Solutions for Business
Aiea, Hawaii
PPAI 101656, D12

Is this a client that you do ongoing business and have a history with? If the answer is yes, why would you need a deposit? If they agreed to pay upon delivery, most venders give 30-day terms, so by pushing back you created an opening for them to look elsewhere. All my customers understand the tremendous value I bring to them and it is a given.

Louis Kaplan
President
Brandwear Designs, LLC
Sacramento, California

A Distributor Asks: I have a new client requesting net 90-day terms on an order for 200 t-shirts, which seems unusually long to me. My standard terms are that clients prepay on the first order. Distributors, do you have suggestions on how to encourage this client to pay in a more “reasonable” timeframe? 

A Distributor Asks: I received an email from a senior marketing manager of a large firm with nationwide branches, to request a credit application, as the client will be spending around $100K. I checked the accuracy of the information found in his signature and his LinkedIn profile and Google-searched him and his company’s address, which all look legitimate. I also told the client that prepayment is required on first-time orders. What else should I do to verify this client isn’t a scammer? 

Email your response(s) to Question@ppai.org for the chance to be featured in a future issue of PPB magazine.

Danielle Renda is an associate editor at PPAI.