As a matter of fact, except the KTC project which we first heard on August 7th from you, all the others are new to us. Even your mail on August 7th, the message is not clear as well. Allow me to explain how we can work better in future (Actually, if you attended our Partners’ Meeting these few days in Singapore, you’ll understand better).
We have a project protection system under our VAD system. First of all, you have got the Tier 1 pricing of all the retransfer printers and consumables, your chance of losing that is already minimum because your hardware price is 15% less than those of Tier 2 and your consumables 5% lower than the next tier, which is a general practice of other manufacturers. If you communicate with us constantly and let us know which project you are in, we are able to protect you and even issue a special price to ensure your project win.
Unfortunately, this is not the case. We never get informed. Even your mail on August 7th, you haven’t made any request for a special pricing or alerting us what exact competition you might be facing.
According to Nun’s mail and your below mail, you’d suspect parallel import of Matica products from somewhere. I’d like to highlight a few points for your consideration:
1. If this is the case and that company is the same tier 1 customer, they cannot sell direct to the above projects. They need a local company who can fulfil the tender requirements to do so.
2. Then, I’ll ask what price your customer is actually bidding and what price are you selling to these companies? This piece of important information is always missing.
3. If a company getting our tier 1 price, has to go through the same cost like you to sell in Thailand and has to reply on a local channel to bid the project (and bear in mind the operating cost outside Thailand is much higher) and they can still win over your partner in Thailand with a big price difference, it would sound very wired to me.
4. It seems to me that the only logical conclusion is that some party within your value chain has marked up a price higher than the general market practice.
5. After all, which competitor of your partners have finally won the project at what price? What is the percentage difference of the two bid?
I firmly believe that if you communicated well with our team like what I suggested above and ensured your value chain earn a reasonable profit, the chance of getting the project should be high. For Matica, the reason why we are willing to offer a high discount to our partners, the major objective is to expand the market share, get new projects while allowing our partners to earn a reasonable profit margin. And in general practice, a good master distributor in the electronics industry should earn things less than 15%. FYI, my Fargo distributor in Singapore, who contributed yearly a sales of over US$1 million in the past, only mark up 8% for goods being distributed to their dealers.
Direk, trust is important if we are to team up. Without your input, we couldn’t protect you. To cite you an example. I myself also have a lot of good connection. Recently when I met K. Paradon Nitaya when he wants to explore further the payment solution of BTS by BPS, some weeks before, that’s the FIRST TIME I heard that you are approaching this BPS project with our XID printers. Then, K. Paradon told me that he got the quotation from you. Unfortunately, he has some misunderstanding and luckily I was there to explain to him that his query can be solved by applying our EDIConnect solution. And I told K. Paradon that POScard is our distributor and I am glad that BPS has got the quotation of XID printers from POScard and if so, there’s nothing I can contribute further. However, I have to remind you that BPS is also comparing XID with Fargo’s retransfer printers. You cannot quote too high.
This is a typical example of the problem I have outlined above. Please note that we should be working as a team. If I want to cut you out in the BPS project, I can simply introduce another company to take the deal away but I didn’t. I AM NOT BENNY TAN and I take care of my partners. Likewise, I expect our partners to trust us and keep a constant communication so that we can team up and win projects together.
Anyway, we are approaching the end of Q3 and Q4 is coming. Lisa and our new Business Development Manager, Max Ebdy will be following for me your case. We need to know how many orders you are going to have so that we can prepare enough stock. Lisa and Max will also review with you and see what further assistance you need in order to build up the sales momentum. I’ll be spending more time in our Beijing and new HK offices in the coming months.
Appreciate your kind understanding of the situation.
Best regards
Kenneth