Think about this. You are a buyer of custom made plastic thermoformed parts for your company. Company A presents a quote for the tooling that is 30% lower than Company B and 40% lower for the parts that will be made from the tool? What’s up here?
As a buyer you are cofronted with these questions in your mind:
- Is Company A actually that much more efficient than Company B? Company B has been in business for over 40 years and certainly knows how to thermoform their parts cost efficiently for their customers.
- Is Company A giving a ridculously low price just to win my business so that once they start producing parts for a while, they will raise my price because they know that we have paid for the tooling and will not want to have to pull it to give to someone else.
- Or is Company B trying to maximize their profit just because they feel they can gouge us?
- Is Company B hoping we will negotiate with them when I tell them another company is 30-40 lower in price than them? Should I try to see if they can do better? After all, it doesn’t hurt to ask, does it?
- Or maybe I can just eliminate all of this and accept Company A’s low price to avoid all the hassle of negotiating.
- Its not all about price. It is about the expectations you have that makes any price worthwhile.
- In manufacturing today the really important criteria that the price must reflect are Design, Speed to Market, Engineering Support and Location of the Thermoforming Company, and Customer Support.
- Its not about Quality because if a Thermoforming Company produces poor quality they will not receive repeat business. Period. Quality is Expected.
- Did the company quote this part based only on review of the files?
- Did they make suggestions to me about how to design the part to make production of the part more efficient?
- Do they have the engineering support my engineers need to really make this project a success.
- Will it be easy for them to visit us quickly when we need them.
- How quickly can the get this part to us so that we can quickly get to market?
If the thermoforming company you want to work with can assure satisfy these questions, you can now take the price into consideration.
By answering these questions to your satisfaction, you can make a valid business case as to why you have chosen the lowest price or the higher price.
Remember these words by John Ruskin… “There is scarcely anything in the world that some man cannot make a little worse, and sell a little more cheaply. The person who buys on price alone is this man’s lawful prey.”