November 25, 2008

I be stoopid

I may have a less-than-intelligent looking face. At times I may sound a bit hickish when I talk. My spelling is not perfect. Yet, in all, I consider myself reasonably intelligent.

One of my larger customers must not agree. They have presented me with a proposed long-term agreement that only an idiot would sign. At least 50% of the provisions are so one-sided I can imagine no one would agree to them. The customer wants long-term sourcing and pricing, including me holding large amounts of inventory. He will give us his business unless he finds the parts cheaper somewhere else, then all bets are off. I must give guaranteed price reductions, but if any end user has a warranty claim, justified or not, I am expected to pay for all parts, labor, shipping, travel, etc. And he wants longer payment terms. In addition I must promise to give him the lowest price I sell my product, even if another customer buys ten times more of the same widget.

In summary, I give the customer the best price, assume all risk, promise to reduce prices, and he can leave at any time. Does that sound like a good deal?

I have not even given it to our company lawyers yet who will rip it further I am sure. Win-win my ass. I say jack the price and tell them to take it or leave it.

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