Background:
FancyFix successfully secured a partnership with K****, a well-known American brand whose products are sold in major U.S. retail chains such as The Home Depot, Lowe’s, and Walmart. K**** also operates its own factory in the United States, producing a portion of its self-adhesive products domestically while importing others from China. One of their flagship products, cork tiles, enjoys significant brand recognition in the U.S. market. However, due to a significant price increase from their existing supplier, K**** needed to find a new, reliable cork tile manufacturer in China.
Client’s Challenges:
High-Quality Requirements: The client had specific requirements for cork granule size and insisted on a clean and uniform appearance. Additionally, packaging had to strictly adhere to the client’s specifications.
Low Price Expectations: The main contact at K**** was of Chinese descent and had a thorough understanding of manufacturing costs in China, resulting in very limited profit margins for us.
Strict Delivery Deadlines: The client only accepted early deliveries and could not tolerate any delays.
Stringent Testing Requirements: The products needed to pass Prop 65 and BPA (Bisphenol A) tests, among other stringent quality checks.
Initial Quotation Issue: Due to a factory pricing error, our first quote to the client was 15% below cost. The client showed strong interest in collaborating but was unwilling to accept any subsequent price increases.
Our Solutions:
Understanding the Client’s Dilemma: We approached the K**** company’s China representative, who acknowledged that our initial quote was below market levels. However, the client was in a difficult position as their existing supplier was no longer viable, and timely delivery was critical. They urgently needed to place orders to meet their own customer commitments.
Demonstrating Commitment: To show our sincerity, we offered to fulfill the first order at a loss, with the understanding that future orders would be at adjusted prices. This gesture demonstrated our commitment to a long-term partnership, which the client appreciated and subsequently communicated to their U.S. counterparts.
Finding a Mediator: Negotiations over future order pricing initially stalled, so we enlisted the help of the K**** China representative. We offered a small additional discount to facilitate the start of the partnership, which helped to bridge the gap between our quote and the client’s expectations, ultimately leading to the confirmation of the order.
The Results:
This approach led to the establishment of a long-term relationship with K****, which has now lasted for over five years, with regular repeat orders and expansion into other product lines.
Conclusion:
Short-Term Loss for Long-Term Gain: Accepting an initial loss can pave the way for a profitable long-term relationship.
Proactively Solving Problems: Helping clients overcome their challenges fosters growth for both parties.
Detailed and Responsive Service: Listening closely to customer needs and offering professional, customized solutions helps build strong, trust-based relationships.
