Manufacturer Debate

[Young Spark]

I am having a debate with a member from another forums, he insists highly (and I tried to offer him friendly business advice) but he assumes in the 7 years he's been in business he's tried everything. He says the item's are going to soon cease being manufactured but I told him to try this.

I told him to (with an attorney) draw up a contract offering some stipulations. I told him to request that the manufacturer keeps manufacturing the parts for the next 2 years with a $100k return. Now, the manufacturer doesn't have to invest anything, all they have to do is simply keep making the parts for the next 2 years (and not to cease making the parts within' the next 2 years) with the guarantee that they will receive $100k in wholesale orders from the guy's company.

I agree that this is logical as the guy runs a BIG website so I here and everyone has such a successful business ratio with him that he sounds like he could be good. I also offered him to revise his marketing and strategy, right now, he's not gaining the potential customers he could have.

But here is the debate topics and I'd like for everyone to vote on the issue:

My Debate: I believe that if he works with the manufacturers, play a little hard ball and draw up some contracts with some very tempting stipulations, the manufacturer may be all for it and will consider the contract and even take him up on it. This'll give him up to two years (assuming 4-6 months for revising his marketing and advertising strategy to gain more exposure) to create a more stable foundation and the manufacturers continue making the parts, while in return receive $100k wholesale orders that will satisfy their needs. Fact of the matter, I believe they only want business, if you give them business, the manufacturers get more money and can strive.

His Debate: The simply matter that he says is that he's tried everything I recommended (revision of marketing strategy, work to "convince" the manufacturers to continue, etc.) But he insists that the manufacturers care only about money, they want large orders... they want orders with over 200 pcs. Now, as I told him, he is not really working tough enough with the manufacturers if he hasn't gotten any results and explained his case. Fact of the matter, he believes they only want money. More money doesn't always necessarily mean more business though.

So which debate do you believe hold true... do manufacturers care about money (his debate) or business (my debate.)

[SpencerB]

His money and business are one in the same. Honestly, I don't understand what the debate is.

Sounds like he is working with the wrong manufacturer and needs to find one that fits his needs better.

[Young Spark]

Well see, the thing is this... here's an explanation:

Money - He states they want large orders, that these manufacturers he is working with only care about money... I differ, I say their all about business.

Business - Business is more of a form of activity in some term. If these manufacturers want continuous business to GENERATE money... they'll work as together to come to a solid business contract.

I'm sorry, I know its hard to understand but the forums have done ban me because I stated some opinions about ways he could make his business better, unfortunately, the moderators kiss his ass because he is a sponsor and tried to insult me for giving him some helpful advice. But by the way he was talking on AIM the other day, his business will die in 6 months to 1 year from now cause he has NO determination, NO drive to succeed, and definitely NO passion for his business... yet he says "I'm trying to keep this car alive... I'm doing this and I'm doing that" but his negative look on things isn't proving anything.

On top of that, he so called gets hundreds of orders... yet he pays ONE PERSON to answer the customer calls from 10am-7pm every day... and he says its hard to find customer service rep's and that he's always flooded with hundred's of emails each day that takes him days to respond. It doesn't seem he wants his customer's too bad, 'nor as I said his business. It sad he was exposing flaws out the ass about his business yet says he's tried everything to make the business successful.

[jasaunders]

It sounds like he isn't a very good businessman in general. But without knowing more, its hard to say if he is wrong regarding the MFG. MFG's have their business needs to attend to. They don't necessarily just want more business over the long run. Maybe the profit margin on these items isn't large enough and they have a better margin on other products they could produce. Maybe making small batches of these products cost the MFG more because of setup and holding time. Inventory costs money. It is a perfectly reasonable explanation that the MFG needs bigger orders to turn inventory faster. It is probably not worth it for them to just do small runs of this item, it may be causing a lot of waste in their process.

If you wanted to try to continue working with this manufacturer, you should have an understanding of how their process works. Are they using an MRP system where they are pushing inventory based on forecasts? Or are they using a lean system to pull inventory? It would be important to have information on the inventory management and resource planning that the MFG is doing to accurately assess this situation.

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[Young Spark]

I agree Josh... but the fact is that he is determined to not put forth the effort. Even if they did have a MRP... his items are so high that their higher then other MSRP prices I've seen. Plus there was a topic on the forums saying he hasn't responded to many customer inquiries for days ... this is POOR customer service if you ask me.

The thing I am suggesting though is that as I said, the business don't care about money, they want your business. Surely, they may have other parts to make and everything, but as I told him to propose: If he proposed a contract to the manufacturers with some of the stipulations being they continue making the Ford Probe parts for the next 5 years then they'll get $100k worth of wholesale orders within' 2 years and $200k worth of wholesale orders in the remaining 3 years... IT might seem high, but 2 things:

1. Everyone says he makes a lot and has good customer service... yet he says he's struggling to sell right now "because of the manufacturers" --- once again, he's blaming the manufacturers when he just discovered a flaw
2. He kept saying so many things that confused me and the dreaded "I've been trying this for the past 7 years" and as I told my fiance, he hasn't cause if he had he'd be a million dollar+ company right now... not saying all my tips would've worked but if he put 1-2 into it, he'd be large.

Either way, its his business and unfortunately since him and the moderators of the forums are close (cause he sponsors the forums) --- the moderators banned me for giving him business advice, you ask me, I think the forum is living off bad business ethics too, you can't ban someone over simply telling them they should change a few things up. So I'm not worried about it, I doubt the guy's business will last long. Just my opinion.

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[jacksonallan]

The situation has not been explained very well. I cant even work out what sort of product we are talking about. Depending on the product most manufacturers will have minimum quantities they will manufacture before they will take on the contract. That's because they have set up costs that they must cover before they start making a profit, just like jasaunders said. Its all about economies of scale. So the manufacturer doesn't want to produce small amounts and this guy doesn't want the costs of holding the inventory. If I am reading this right, he just has to come to grips with the fact that if he is a distributor then it is his role in the value chain to take on the holding costs.

Anyway, business is a mindset, and this guy sounds very negative and doomed to fail unless he turns his attitude around.

[Young Spark]

Allow me to provide a small post of some of his flaws:

ANYONE WHO DOES Business with us PLEASE CALL US DIRECTLY AT 631-903-3400 For any questions or concerns. We have been having extreme email troubles do to spamming and viruses. I pay someone to answer calls MON - FRI 10 am - 7 pm . You might not always be able to get through as we get flooded with calls , but please keep trying. Wait an hour and try again , don't just keep trying back every minute as we may be tied up doing something.


PLEASE CALL FOR PART AVAILABILITY FIRST !!!!!!!!! or AIM :audioxtc
We are on AIM ALL DAY LONG AND RESPOND TO EVERYONE ON AIM !!! Give us a minute though as we arent always at the computer.

IF you are waiting on a refund please call us and get someone on the phone to research the problem . Once you have it sorted out with someone on the phone the refund is normally done within 24 hours.

The things that are made no longer have a great mark up on them due to EBAY killing all the prices that any item holds whether its car parts , motorcycle parts , or furniture so it becomes almost not worth selling them . Allow me to enter into evidence... evidence A... his site, http://www.probeaddiction.com --- you mean to tell me he makes almost 15-20 sales a week and his high ass prices he can't pay to keep the business running (is what he told me in the AIM chat we had.) And if he did 2 things... advertised a bit more and showed the reliablility of his company, he'd make it far. And it doesn't hurt for him to attempt eBay

With such little mark up on the items and the fact that that item could be seasonal and only sell a bunch in a certain month it would tie up alot of money that could be used in other places. IT sucks to have $15K in product that might not be sold for 3 months that you may only make $1000.00 profit on. It just doesnt add up. This is what I was telling him, improve his customer service and advertise and market a bit more and maybe that $15k worth of parts won't be sitting there.

Also , its so easy to say we should just hire more people to answer phones and get better phone systems , hire more people to answer emails and grow with the probe market. The probe market is one of the smallest markets in existance , i hate to break that to many people but it is true . What is failed to realize is how are you paying more and more people , with what ? With less interest in these vehicles and people wanting to spend less money on them how big do you really think a company should be that just dedicates to the ford probe and still have to make a profit to stay open and pay everyone ? Probe market is not a million dollar market no matter how big and professional a business may become. There will always be problems , we deal with many large busiensses a day and they are just as bad if not worst with many of there problems as we are. My point, he is not trying, really he must not believe that there is a such thing as training. Now to be quite honest, the market can be small or whatever he assumes, and he keeps saying the car is ten years old and dying out soon... but this car could go on for YEAR... look at the 1950 and 1960 cars still around today. Prove anything? And on the topic of people spending less on them... maybe he should do a little thing called "QP" as I call it (quality proof) --- if he so called has the best parts and Probe owners know his parts are quality filled, they'll buy... he just like to think negative if you ask me.

The same manufacturers that tell you it will be back in stock in 2 weeks and 10 weeks later they are still telling us it will be in within 2 weeks. They don't care because it isnt making them look bad , it makes us look bad. Same with the quality of there parts , we try and offer the best parts out for the Probe , but even some of the best parts are still horrible in quality.(ie bodykits) As somebody said beofre (I believe) --- maybe they should start looking for other manufacturers... either that or explain the issue to the customer why they still are stuck with a manufacturer that fools around with them instead of looking for a new one.

We still try and help out every customer and learn each day to improve. Every scenerio is different as is each day. I wish i had a couple $100k's to make whatever parts we want and sell everything and be the cheapest and have the best customer service and fastest shipping . I wish that every day and hopefully someday that may be a reality. But it is not a overnight process and we are making steps in the right direction once a few things are cleared and the new site is launched . Surely its not an overnight process, but if you ask me... his point of view on a bunch of things I just clarified above will never become reality because as jacksonallan said... his mindset is set to 'fail' not 'success'.

So as ya'll can see, he has a very diverse mindset on failure and with that comes the failing of a business. Yet the moderators says he's the best and does alot of ass kissing because he sponsors the forum (which to be honest is his only prime way of advertising if you as me.)

But hey, that's just my .02 cents.

[Unreal030]

It looks like he doomed himself before he started. Now I am only 18 and I am going to start gaining most of my knowledge on business in college however I know for a fact that money means nothing, details mean nothing, research means nothing if you do not have the drive, determination, and passion for what you do and your business. He is constantly pointing out flaws which he can easily answer to. He needs to ask himself, what if?

What if I did this?

This is whats wrong.
These are the things I can do.
What if I picked this way to fix this problem? What would be the positives and negatives of this choice over the others?

Some are quite obvious here, and you have already pointed them out.

High price? People not buying?
-Quality Assurance, if its a proven quality item people will pay for the item.
Not getting enough sales or the market seems small?
Market.

Go to sites specifically for advertising your business, get some fliers or something out. E-mails, anything. Increase your google search engine rank..
Place testimonials on your website that specifically mention great service and a quality product.

There is no such thing as a small market in my mind. There is however such a thing as a small mind. He can broaden his saturation of the market through the use of e-bay and other similar devices...its not below him..

So he is having customer service rep issues? Can't keep up with the customers.
Hire more...
Yes it costs more money, however better customer service=more likely to have increased sales. More free time for him to focus on other areas of his business then going through a bunch of e-mails.

In the end that CSR cost will pay off, business is all about taking risks isn't it?

He dug his own hole is basically what I am saying. He is not a good businessman.

[Young Spark]

^^ That's what I told him, but he believes he is doing fine. I am watching his business slowly deteriate though... so I'm not arguing about it. (Plus, he wants $1,200 for a KLZE Engine that is imported from Japan... I know PLENTY of legit sellers that sell KLZE's for like $800 and $1000-$1100 for KLZE engine AND transmission together.)

Have I proven my point yet... his prices are ridiculous.

[Unreal030]

Well one of the most important things especially with something like that is research. Yeah though, I wouldn't worry about it, some people won't learn until their first (or few) business bombs.

[Young Spark]

So let's run down the true list of errors:

1. Poor Business Attitude
2. Not Enough CSR's
3. Been in Business 7 Years Yet Tried Everything to Negotiate with Manufacturers
4. HIGH Prices
5. Poor Website Design
6. Terrible (If Any) Marketing Skills... He markets solely to a Ford Probe forum with 10,000+ members, but still regardless, that is not enough customer's (IF ANY) for your business. I proposed expanding to event sponsorships, commercials, contests, etc. Once again... get this he tried these and they were failures.

I think that clears the jury to find him guilty of poor business.