All,
As sad as this may sound, forums are my last resort here. I have a small business where we buy products from the manufacturer and resell directly to the end user. Generally, manufacturers do not like to sell small quantities, especially considering these are machined parts. A machining manufacturer will not start up a machine for a batch order of say, 10 pieces. Instead, they run lots of 500 or 1000. Some will, but not many. The Good: We get approximately 20-30 RFQ's for our products every day without doing any marketing or advertising whatsoever. We carry very little inventory so 90% of the time we are having to go to the manufacturer to get pricing. It is not realistic to carry inventory that would fit our customer base considering there are literally hundreds of thousands of different sizes, shapes, types, etc of this particular series of product type we sell. We'd need a warehouse the size of a SAM's club,,,,,,,,,,,or larger. Here's my dilemma and question for the forum. I have customers come in daily for quotes in quantities of, for example, 15 pieces, 30 pieces, 16 pieces, 55 pieces, 100 pieces, etc. However manufacturers often give price breaks at higher quantities of these products at, for example, 200, 500 and 1000 pieces. So here's what is happening: Customer comes in for 15 pieces. I don't have them in stock. I go to the manufacturer and get a price of $20 each. I mark up, say, 25%, and thus quote a price of $25 each. Meanwhile, company B comes along and quotes a price of $5 to that same customer thus I get beat out on price and lose the sale. As I stated, there are literally hundreds of thousands, if not millions, of these type of products out there and no one particular line that you could feasibly focus on and still draw the right business amount in. You have to offer them all in order to compete and draw in the business. I've toyed with the numbers of buying the 1000 pieces at .50 cents each instead of the 15 pieces at $20 each, selling the 15 and putting the other 985 in inventory. Problem is that in 2 years of running this business my data shows I've only had and order for the same type of piece duplicated 4 times. Those 985 pieces could sit in inventory for years and years. How do I get the lower pricing to be competitive, not hold inventory, and still offer a competitive price to my customers?
As sad as this may sound, forums are my last resort here. I have a small business where we buy products from the manufacturer and resell directly to the end user. Generally, manufacturers do not like to sell small quantities, especially considering these are machined parts. A machining manufacturer will not start up a machine for a batch order of say, 10 pieces. Instead, they run lots of 500 or 1000. Some will, but not many. The Good: We get approximately 20-30 RFQ's for our products every day without doing any marketing or advertising whatsoever. We carry very little inventory so 90% of the time we are having to go to the manufacturer to get pricing. It is not realistic to carry inventory that would fit our customer base considering there are literally hundreds of thousands of different sizes, shapes, types, etc of this particular series of product type we sell. We'd need a warehouse the size of a SAM's club,,,,,,,,,,,or larger. Here's my dilemma and question for the forum. I have customers come in daily for quotes in quantities of, for example, 15 pieces, 30 pieces, 16 pieces, 55 pieces, 100 pieces, etc. However manufacturers often give price breaks at higher quantities of these products at, for example, 200, 500 and 1000 pieces. So here's what is happening: Customer comes in for 15 pieces. I don't have them in stock. I go to the manufacturer and get a price of $20 each. I mark up, say, 25%, and thus quote a price of $25 each. Meanwhile, company B comes along and quotes a price of $5 to that same customer thus I get beat out on price and lose the sale. As I stated, there are literally hundreds of thousands, if not millions, of these type of products out there and no one particular line that you could feasibly focus on and still draw the right business amount in. You have to offer them all in order to compete and draw in the business. I've toyed with the numbers of buying the 1000 pieces at .50 cents each instead of the 15 pieces at $20 each, selling the 15 and putting the other 985 in inventory. Problem is that in 2 years of running this business my data shows I've only had and order for the same type of piece duplicated 4 times. Those 985 pieces could sit in inventory for years and years. How do I get the lower pricing to be competitive, not hold inventory, and still offer a competitive price to my customers?
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