It’s not always best to be the lowest bidder. Many times I’ve seen people be proud that they got the lowest price, only to find they’ve gotten shoddy quality and late delivery or delayed job completion. What is the vendor with the lowest price sacrificing to be so low? Are they using subpar materials or untrained/unprofessional employees, or are they not providing after-sale service and guarantees?
Some vendors have nothing else to offer, so they use the low-price strategy to get business. They usually say that they’ll make it up on volume. But if the volume is not there, something else will be sacrificed. The vendor may accept more business than they can handle and scramble to fulfill the orders or complete projects because their profit is so low. Something will and does suffer in the process. The product or service will seldom be as good that provided by someone who is making a fair profit.
Is this what you really want when purchasing products or services? Or do you want a good price for the value you’re receiving? You’ll feel comfortable knowing that your vendor made a fair profit and you received the quality and service you expected. The same is true when you’re the vendor: If your profit is too low, it’s difficult to provide great products, services, and after-services, which are necessary to keep loyal customers.
Besides, if you lose an order on price and the winning vendor has difficulty fulfilling the order at their low price, you may just get the next order from the customer when they are dissatisfied. So don’t go away angry; let the buyer know you’re there if any problems arise.
You also don’t want to be the highest price unless you’re selling luxury items, but try to provide a good price for the value you’re offering. When you buy and sell this way, you’ll become a more satisfied customer and vendor.