Not sure what to do

Just wondering if I'm way off the mark here or not - would appreciate your comments. I'm being intentionally vague about the people involved and the product :I have recently started using a supplier for a commonly used product due to what I thought were excellent prices. I have just discovered that another of my suppliers is selling the same product for even cheaper (standard price, not special offer). I dropped the new supplier an email hoping that they would compete, but got this odd (I thought) response (paraphrasing here):"Thats great I'm looking for some of this product for another customer as I've run out for the moment. Buy x amount for me and I'll transfer the amount your buying it for into your account. Let me know when you've done it".To be clear; the new supplier isn't asking me if I would be able to, they are simply saying "do it". They are not offering me any incentive to do it or compensation for my time/use of my discounted terms with the supplier. I'm pretty sure they will profit from the sale to their customer.I'm not happy about the fact that this supplier thinks it's ok to do this.Any thoughts?

We said this sometimes to customers when I worked in the Builders Merchants.
Sometimes a supplier can get sick of hearing 'I can get xyz cheaper somewhere else' and proffer you the challenge of buying it for them.

It could be a pisstake or it could be genuine.

Either way point out to the supplier that you're in a different business and don't want too be a middle man.
However I have been involved in businesses whhere the customer does become the middleman and because they buy a greater volume from their supplier, they get better price.

eg I worked at Tools & Fixing supplier, amongst others they purchased Hitachi power tools, because of their large volumes they got better terms than a much smaller competitor (40miles away), we supplied the smaller supplier at just above our cost price (+1%), they got the tools cheaper than buying direct from Hitachi, we increased our volumes and got a better deal from Hitachi, a Win- Win scenario.

So you could see the propositon as an opportunity, I'd approach the second supplier and ask if you increased your volumes if they would discount their prices, then sell to your first suppliier at a profit.

Replies

PRO

Paul @ Ashgate Garden Care July 31, 2010 at 7:30am

I'd walk away from your old supplier.

Why should you in effect resell to them at not profit. They are just being extremely cheeky and lazy not shopping around for the best prices for their products.
Nick Donaghey @ Garden Gurus July 31, 2010 at 7:43am

Not explaining myself properly as usual! I absolutely will not do this - I'm just not sure what response, if any, I should give the guy
PRO

Geoffrey King July 31, 2010 at 8:30am

We said this sometimes to customers when I worked in the Builders Merchants.
Sometimes a supplier can get sick of hearing 'I can get xyz cheaper somewhere else' and proffer you the challenge of buying it for them.

It could be a pisstake or it could be genuine.

Either way point out to the supplier that you're in a different business and don't want too be a middle man.
However I have been involved in businesses whhere the customer does become the middleman and because they buy a greater volume from their supplier, they get better price.

eg I worked at Tools & Fixing supplier, amongst others they purchased Hitachi power tools, because of their large volumes they got better terms than a much smaller competitor (40miles away), we supplied the smaller supplier at just above our cost price (+1%), they got the tools cheaper than buying direct from Hitachi, we increased our volumes and got a better deal from Hitachi, a Win- Win scenario.

So you could see the propositon as an opportunity, I'd approach the second supplier and ask if you increased your volumes if they would discount their prices, then sell to your first suppliier at a profit.
PRO

Phil Voice July 31, 2010 at 8:59am

My initial instinct is completely ignore the email.
Jackson's Landscape Design July 31, 2010 at 9:06am

I'd be concentrating on my own business.

I would return his email and suggest they have you mistaken for another

Cheeky buggers.
Bigyin July 31, 2010 at 10:22am

Yes, you do get customers who instead of being faithful because of the good service you've supplied, will always ask for a competetive quote and tell you they can get it cheaper elsewhere. Very irksome and tempting to respond "It's a no brainer. Get it from the ultra cheap supplier but don't come back to me when they go bust". But you don't because a customer is a customer.
It's hard to imagine that your existing supplier can't get it cheaper wholesale than the other supplier's retail unless there's a shortage from the national distributor.
Nick Donaghey @ Garden Gurus July 31, 2010 at 5:19pm

Thanks guys - confirming my thoughts really.

I'm going to ignore it. I feel it shows a complete disregard for the way business should be done. Naivety on their part maybe?
Fenlandphil July 31, 2010 at 5:54pm

On one occasion I bought steel from one stockholder and sold it to another and made a profit, as I had a similar sort of comment, "we can't buy it for that price etc".
With products that have price volatility like steel, prices can vary enormously per tonne between different stock holders, it depends where they have bought, when and what they think the market will stand in terms of price.
Other variables are their need to sell to reduce stock levels and generate cash flow, targets and space considerations. If I had all that sort of hard info rather than having to rely on the answers I get on the phone I could save a fortune.
Lawncare-4u.co.uk August 2, 2010 at 12:58am

ignore it and just buy what you need from new supplier cheaper.

childish response from them if they cant match it.

Nick Donaghey @ Garden Gurus said:
Thanks guys - confirming my thoughts really.

I'm going to ignore it. I feel it shows a complete disregard for the way business should be done. Naivety on their part maybe?
Manjit Yadav August 2, 2010 at 5:07pm

I think you must send an email to that supplier and ask for any incentive or compensation for using your time and discounted terms.If you are helping them this time then may be they will be able to provide you some good rates for their products.As a supplier point of view I think there is nothing wrong to ask for the help from their own clients/customers if they have run out of that product.
Thanks
Manjit
www.hariomtradeint.co.uk