Negotiating on quotes from manufacturers

[Tandbelle]

I'm currently getting quotes for a couple of custom products to be made from UK manufacturers. I've selected the two companies that I'd like to work with, based on their quotes and how responsive/helpful they have been. Is it expected that a company would halfha on manufacturers first quotes for custom products? I can't seem to find much info on this. I have haggled on stock products before but have not made custom orders before.

 

[alan1302]

Yes, haggle away.

 

[Stedurham]

Are they both similar prices? Be careful how you haggle, you don’t want to piss one or both of then where are you? They know what you were gona make and may well just maker it themselves

 

[pentel]

Are they both similar prices? Be careful how you haggle, you don’t want to piss one or both of then where are you? They know what you were gona make and may well just maker it themselves

Most manufacturers are in business to manufacture. In 40 years I have never been tempted to go to market with a customer or potential customers designs.

 

[CVRO]

I've seen cases in China, Turkey and Egypt where the manufacturer produces extra quantities using the same material and standards. This extra quantity then finds itself into the grey market.

 

[Tandbelle]

This is a UK manufacturer if that makes any difference?

 

[CVRO]

I do not have direct experience with UK-based manufacturers so I defer it to others that do.
However, if I had to guess I'd say it would indeed make a difference.

 

[28one - DC]

of course you can haggle. but the only way you will get a better quote is through volume. What volume did you mention at the start as that will form the base of the quote? they will have to factor in design, tooling, materials, and that base cost will not change. They will have a margin they will want to make so you will need to ask for quotes based on volumes. Maybe dont start with that - ask if they can improve, but eventually it will come down to volume. Again there will come a point when the volume doesnt affect the cost and you will either need to accept the quote or stop wasting their time.

 

[Tandbelle]

Thanks 28one, this is really helpful. I need to keep the volume quite low initially but I think once it comes to reordering, I will have more ability to negotiate on volume.

 

[paulears]

I think that haggling in emails is far easier to do. I hate it in person. Buying a car is simply horrible. I know many people hate it, but others love it. In emails, you can be quite honest. You can tell them that you hadn't expected the quote to be so high, so will have to reconsider moving ahead. If they pitched a bit high to see if you bit hard, they may then be able to tell you how little they will make and reduce the price - you can then use this to negotiate with the other until you make your mind up. It also bring forward any issues or reveals things you didn't think of.

 

[MOIC]

My advice is to do the following:

1. Get a written quote including all components and materials used.
2. Compare both quotes in detail.
3. When negotiating a reduction in cost, ensure that the spec in the written quotes are the same.
4. Ask for price breakdowns for Qty A, Qty B, Qty C - often factories will reduce their prices based on your order quantities.
5. Tell each supplier that you will pay for all tooling costs (if this is feasible) in order to have the product price reduced when you order. You will need to see if this option is favourable to you.

It's often the case when negotiating the price down, the supplier may omit or use different/cheaper components.

Ultimately the price agreed must leave you with a profit AND the factory with a profit.

Good luck with your negotiations!