This week my business partner and myself had a very important meeting with a prospective new client which turned out to be not what we had expected. The company is a large logistical company and is actually split into 3 different internal companies that operate independently. This makes things a little more complicated and will slow the process down, but we are always up for a challenge. There is no thought that we will not get all three as at least we know there will be no corruption with how this has been arranged.
The problem is the buyer we saw only procures for the one company and there are 2 other buyers and the same applies for Johannesburg and Cape Town. We would have to see 9 buyers to get our product throughout this particular company. This I find a little strange as they are not using their buying power correctly and will be paying different prices using different suppliers. Maybe they had corruption in the past and why this has been done this way on purpose.
The good news is we found a discrepancy with the products they were ordering and this was by as much as 10% so the 5% discount they were getting and thinking these prices were so fantastic are not that fantastic after all. The madness is we may already be supplying this one company as this may be another of our clients supplying them specifically ordering a slightly lighter roll. if that is the case we already know we are winning on price which makes this a formality.
We managed to acquire one of their pallet wrap rolls and have done a complete video analysis for them along with a quote. The buyer we met would now like to present this to the other two buyers at the Durban branch so we can get the entire branch on board. By chance the buyer let slip another of the buyers names which would be the rally big order out of the 3 subsidiaries, but morally we will wait for the buyer to do his presentation before any follow ups. I feel personally it would look bad if I jumped the gun and better to let the buyer have his day in the spotlight and to do his thing.
It was actually quite a funny visit as my business partner and I were looking at the exact same things when walking through the warehouse and managed to come up with a similar type of valuation for the prospective business. Over the years you get a feeling with regard to numbers even though we only visited one of the two warehouses. The buyer we saw was the smallest user out of the three subsidiaries which is fine as we plan to land all three of them anyway.
I am no fan of the individual businesses doing the buying and no for a fact there is wastage and if they consolidated then they would save a decent amount of cash. The 9 jobs around the country sprang to mind when surely one would suffice, but that would not be a topic one could raise because you want these individuals to be your clients.
These types of visits are hard to gauge what the percentage is of likely landing this business and is a work in progress. Landing this Durban branch will then open up the other two branches which is 3 large customers in total even though it is actually 9 different accounts.
Next week should be interesting as I have all the information required to start obtaining the Johannesburg branches of other companies we already supply in Durban. They are also independent buying individually and this at least is not going in blind as we have a history with these companies already. The one warehouse is the largest warehouse in South Africa the size of 94 football pitches so the volumes they use must be astronomical and is exciting.