Re: How negotiable are the initial manufacturers quotes.
Posted 08 Jul 2012 18:22
That is a question that is difficult to provide a specific answer to.
Manufacturer costs and profits can vary significantly depending on many different factors including things like, employee salaries, location, infrastructure, size of the factory and economies of scale they can produce.
So while all manufacturers should have included some leeway in their pricing to allow for a reduction, the amount of that reduction can differ. And quite honestly, many will provide less in price reductions that they used to because they are working on thinner margins than previously.
The best advice I can offer you is for YOU to know how much you are prepared to spend for the product. Based on your overall costs, what do YOU think is the appropriate amount to pay given you want to make a specific % of profit on that product.
Just as an example, others may retail for $1100, but they may be buying 10 container loads and getting better pricing based on their quantity, or their quality may not be as good as the more expensive supplier.
This is why you need to know how the products fit into your market so you can know what they are really worth and how they compare to the existing products being sold.
And if you cannot negotiate the price that you think is appropriate be prepared to walk away and look for other suppliers.
But don't forget, its all well and good to look at getting the discount form the supplier, but also bear in mind that over 40% of the cost is not supplier related at all. It is shipping cost, VAT etc.