FollowWhen you receive end quantity pricing from a promotional products supplier, do you pass it on to your client?
I recently received an interesting email from a promotional products distributor. Here’s what she asked:
“I would love to hear your thoughts on distributors who feel the need to extend their EQP to everyone. I love when I meet a distributor and they are so excited that they are getting EQP from a vendor and tell me how they pass it on to all their clients.”
Here’s my take on end quantity pricing. Passing on EQP can be a slippery slope. On the one hand, it may make you look great in the eyes of a client. On the other hand, it may significantly cut into your profitability.
Plus, I’ve noticed a trend: often the end quantity net price is only a few dollars less than the net on the other quantity breaks. So, while the client may be getting a great deal, you’re not!
Instead of passing on end quantity pricing to all your clients, be very selective! Use EQP occasionally to secure a big order or you may want to pass it on as a benefit to your top tier clients, the clients that consistently give you larger orders, repeat business and referrals.
Here’s an important thing to keep in mind. Rather than focusing on the price of the products you sell, focus on the service, creativity and marketing expertise you provide. Price becomes much less of an issue when clients see value in your services.
What do you think? I would love to hear your thoughts about end quantity pricing. Do you pass it on to all your clients, keep it for yourself, or just use it occasionally? Please leave your comments below.
© 2014 Rosalie Marcus
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Rosalie Marcus, The Promo Biz Coach ™ is a promotional products business expert, coach and speaker. Combining her skills and years of experience in promotional sales, she helps her clients sell more at higher profit margins and dramatically increase their incomes! Get a FREE special report: 10 Big Mistakes Promotional Professionals Make and How to Avoid Them and a FREE Skyrocket Your Sales audio download at http://www.promobizcoach.
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We use EQP very selectively. Usually when we are in a competitive situation and only with a larger order.
By passing along EQP on a regular basis you are now competing on price, not a good position to be in for any number of reasons.
Compete,rather, on creativity, and solutions. Price is very rarely the buyer’s driving criteria.
I agree, we also encourage distributors not to pass on EQP to their clients. They train them the wrong way. Show your value to them by the service and ideas/solutions you have. You will keep them longer as a client and you will stay in business longer. You don’t want the customers who are price driven. They will cut your margins and increase your risk.
I agree that by giving the EQP to anyone and everyone your margins have no room for error. I believe customer service is worth something and these prices should only be given the very best clients.
As a Supplier I always wonder, “What is more important, letters or numbers?” Are the letters “EQP” the most important pricing tool, or are the prices themselves of critical importantance? Many times the Distributor net on an EQP price is the same as or nearly the same as the first column net due to graduated discounts. My theory in our limited offerings of discounted pricing is to first enhance the Distributor’s margin, and second to improve their competitive position only when necessary.
I think trying to sell column pricing is the best and most profitable for the distributor. Selling EQP can really work against you. For example, client asks for pricing for 500 of an item, the catalog price is $3.80 on a P and the profit on the order would be $950.00. However, the EQP price is based on 5,000 items and the pricing is $2.80 on an R. Great Deal for the customer, he saved $500.00. The distributor lost $390.00 in profit. I usually suggest that if a salesperson feels the need to discount, he suggest NQP. Telling the client, “you know, the 500 piece price for that item is $3.80 each, but I think I can get you the the 750 piece price which is $3.50, will you be able to provide me with artwork today?
The last piece is when someone offers EQP for a 500 piece order and the client responds, I like that price, what can you do if I buy 1,000. Now you enter the no win area of an order.
I think we are all on the same page with this one. It really depends on the situation. Having EQP at your disposal is a great advantage, especially in competitive situations, or just to use as a special thank you for a select client. The goal would be to achieve EQP status, then use selectively as a tool in your tool box. Bill Wright had a great example, you’re saving the customer too much sometimes when you use EQP when you really didn’t have to.
I used to offer the discount right away but I found it defeated my purpose of telling my client’s not to focus on pricing. Plus I feel I do a lot of work and deserve the added bonus …..only if a client is a great client will I give this once in a while as a type of incentive reward.
Very often lately, we are trying to compete with online distributors. I always tell my clients that I cannot match those prices, and why. If you have developed a solid relationship with your clients, it is about you, not the price, as long as it is fair. I agree that you may need to use EQP on large orders, or in very competitive situations, but as a rule, promote your quality and service always!