20% of their order would pay for the rental of this space and they want other zones specifically for their use. If I gave the exclusivity it would come at a price that they cannot afford.
Today I was told that the new client audit will most likely happen tomorrow and I need to make it look like we are being exclusive to their needs. That kind of threw me as I asked them to elaborate what was being expected of us. I can play any game you want if you give me a heads up.
Apparently they want exclusivity to the extent that we do not supply any other company and that the punch bags we produce are solely for themselves. This is kind of unrealistic considering they literally have only 20% of the market share. If as a business we agreed we would have to charge them 5 x what they would expect to pay and they cannot afford that. This company cuts corners on quality and I am sure you remember the stitching from an earlier post as that is their bags.
Companies that have a big name and come in with their demands can literally bugger off somewhere else because online is far bigger than their bricks and mortar numbers. Over the last 20 years their business has been shrinking and even back then they were not the top retailer in South Africa. This particular group is very big in the US and their demands over here can take a hike.
Just for show we will remove any other branded punch bags we do and let them be arrogant enough to think there business demands exclusivity. They have even asked for separate storage areas for certain items which we have done already and I am sure there will be other demands mentioned on the day. This is all smoke and mirrors for now as I would like the contract.
The other downside until they visit ad physically carry out an audit is we will have to hide the assembly line elsewhere making sure it remains out of sight. We cannot stop the manufacturing process as we have deadlines that need to be met which if they only knew are 3 x bigger than there proposed monthly order.
In the future if we land this contract we will have to make sure security lets us know so we can remove all the evidence of other brands. The more I think about this the more of a nightmare this may become and maybe I should not be around for the audit because I will say something. I am not a fan of the way this company operates and I have found them less than ethical in their business practices having had disagreements with many of their buyers in the past.
To give you an idea how bad they are we used to have a yearly stock take on their products which we used to assemble and I used to balance with no problems each year. I used to have a spare float of products that would help balance the numbers which I obtained from the various factories free of charge. The last year I was involved we received a massive bill for shortages which I could prove was false as we balanced to the item. The end result turned out it was our turn to pay for their advertising and this was the only way they could hide this. This business practice is fairly common apparently and every supplier gets stung and you just take the hit if you want to stay involved as a supplier.
I will still try and land the deal, but by no means will it make or break our business. If we get it then great and if we don't I will not be upset or disappointed which tells you I have mixed feelings over this particular contract.
