Today the story is about my first African client, who was one of my original clients. We have been known each other since 2012. Their products scope are mainly including Carbon steel flange, Carbon steel Butt-weld fitting, as well as some stainless steel flange and threaded casting fitting. We established our relationship through internet, there was no dramatic things in the first beginning, just the routine. Every year we could get five or six orders from them, everything went smoothly.
In year of 2014, Derong won a very big stock order: there are 15x20GP containers, including carbon steel flanges, stainless steel flanges and butt-weld fittings. Derong was very excited because this chance was not easy to get. He asked me to quote the lowest prices, and I tried my best to calculate the lowest prices very carefully.
I thought I gave the best prices I ever had, and meantime Derong and I had been worked so long time, he must trust me the best and would give me the big order in certainty. But to my surprise, there was no any news even one week passed. I called Derong, but he said he was analyzing the prices. Another week later, I could only receive the receipt note when I sent to his emails. I knew I lost the order, I was very upset. The only thing I could do was comforting myself that there are always lower prices in the market.
During next half year, there were few orders between our company and Derong’s. I guessed I lost him, but I was really confused. One day, I answered a phone call from him, his voice sounds very concerned and worried. He told me that there were many problems on the products in the big stock order, not only on bad surface treatment, wrong dimension, but also there was short-delivery for many items.
He asked if I could accompany with him to visit a city in South China. I said yes without hesitation. I met him in Beijing high-speed train station. He showed me the pictures of the products. It was really disaster, there were many scratches, cracks, hollows on flanges surface; porous spots and hollows and bad welding lines on fittings surface. Obviously those products were made by old raw materials. From those pictures and his narration, I thought he was cheated by the supplier.
When we met the other day, Derong told me that it was the big stock order in the pictures he sent to me. His client gave him a very low target prices, there was no much margin if he purchased from our company. At that time there was a new supplier named Jason contacted with him, and his prices were 30% lower than what I offered. Derong was excited about good luck to find such a good supplier with lowest prices.
But finally he found he was cheated when he received the goods. He was annoyed and full of regret. His client rejected most of goods, so he was facing the big loss. Derong was very embarrassed because when he saw me, but in meantime he seemed to be relieved. He ever tried to ask for help through other suppliers in China, but all of them refused except me.
We found the address of that supplier’s office, but after we arrived at the office, the boss of that company said Jason was just an acquaintance, and the boss didn’t know anything about the order. This answer shocked Derong. I told the boss that if we could not meet Jason, we will call the police. Anyway, Jason used his company name to sign the contract, the boss should have been take the legal responsibility.
Then the boss made many phone calls in that afternoon, finally Jason showed up. The truth was Jason collected the goods from the iron and steel market in local area, with very low prices, but without quality guarantee, then he sold those goods to Derong. All this business was no relationship with that company, he just used their name. Even though Jason was willing to compensate Derong, it was very small amount. Derong could do nothing but accept the hard cheese. He knew that he shouldn’t have been focus on the prices not the quality.
After that, Derong experienced a period of downturn. Because he had to compensate his client, so he faced the difficulty of cash flow. I told his story to my boss and applied a very good payment term for him. Finally his business was recovered.
He was always full of appreciation for what I did. And after that disaster, Derong and his company issued many strict policies to their suppliers, including payment term, delivery term, quality guarantee and so on. I was also influenced by those policies. But I understand that, since it is business, not the Christmas party. All of us need to be serious in order to avoid the crisis. Until now, Derong and I still have good business relationship, and I think we will go far and far in future.
