“Look, shops open at 9 in the morning and it’s fine if we leave for airport at 10 to catch the scheduled flight tomorrow. We have that one hour. Let us try to meet some buyers”. I had a quick talk with my agent in Riyadh late in the night.
I was on one of my business visits to Saudi Arabia in 1988. As usual my trip was very hectic trying to book orders for my normal product range. I was to return to India the next day morning. At night while I packed, I realised I had samples of a new product, stainless steel glasses, which I had forgotten to explore till then on that trip.
The agent said, “Normally 9am is the time when the shop owners (importers) discuss the previous day’s progress with their salesmen and make their marketing plans for the day. It is too early in the morning for them to discuss purchases. We could pursue that business on your next trip.”
I said, ” never mind, if we are able to meet one or two buyers, we will get an idea about that line of business. No harm. Atleast we will get prepared better for the next trip”. He agreed “Ok, let us take a chance”
We left in time to catch as many importers as possible. The first one was not prepared to discuss purchases at that time, as expected.
We went to the second Saudi buyer. He was busy cleaning and setting his table right, and on our offering the stainless steel glasses, he very casually asked,
He: What price?
Me: 72gms a piece, 7.5 cm dia, 2dz to inner and 12 inners/ctn, non-magnetic stainless steel, 90 days L/C though we may ship in 60 days, $3.75 a dozen
He was still busy cleaning his table, duster in his hand. He said casually, not even looking at us, “$3.50”
Me: No, 3.50 is slightly below my cost. Can’t go below $3.75.
He said firmly: $ 3.50…. pause..….. I could have started with $3.00 and you would have given at $3.50. But I don’t waste time. You are the first one I am seeing this morning, hence don’t want to disappoint you nor get disappointed. If no $3.50, then no interest”
He: One container.
I was expecting the first order to be around 5,000 dz. One container equaled 24,000 doz. For this quantity, I would save some freight and other expenses and my cost would be around $3.50.
Me: Fine. Accepted. We want to start business with you so that you can test our quality of product and services!
He: Proforma banao. Usme Bank details mauzood. Bank L/C details bukra mazboothan. (Make the proforma with your bank details, I’ll arrange and advise you the Letter of Credit details by tomorrow).
I prepared a proforma invoice for US$.84,000. He signed and said in Urdu-Arabic to mean, “Without knowing you, I have placed an order because somehow I felt you are genuine. But make sure you surely dispatch and ship right quality. Don’t let down my judgment”
We concluded the deal and I left for the airport.
By the time I reached Mumbai, the cost of raw material had reduced by about 2%. By the time I exported the goods, the exchange rate went 6% in my favour. By the time I completed the order, I had made a decent saving of about 10%. The value per container was high and the profit margin for this product ultimately turned out to be quite satisfactory. I was tempted to expand my product range to stainless steel housewares!
After executing the order, when I met the same customer on my next visit, I was curious to know what made him place the order with me without knowing of me. His reasons were interesting.
He said something to the effect that, “We have 3 major problems when we place orders with exporters from India.
One, they normally give a price and sometimes show a sample. Intentionally, they do not give full details of the products unless we specifically ask for each of the details. They try to keep an escape route ready for them. In case, later, if the cost goes up, they compromise on the details missed out, and give an inferior, smaller or cheaper product.
Two, when we tie them down in the L/C with all specifications, in many cases they opt not to ship at all when the cost goes up.
Three, when the price increases, they divert the order to our competitors at a higher price. They might supply to us later when they have excess stocks. Sometimes they even fail to supply which is a double loss to us as we lose our customers to the competitor to whom they supplied products meant for us.
But in your case, while quoting the price, on your own, you gave all the details of weight, size, packing, grade, delivery and price which I needed, without my asking for it. This built my confidence that you are honest. So, I took a chance and placed the order with you!”
I was completely got carried away by his reasons! It enlightened me “If I could take care of these worries of the customers, it would make a difference to my business”. I made these as guide lines. Never did I compromise in quality. Never did I fail to supply. Never did I tried to take advantage of the situation. It worked. It gave satisfaction to both, me and my customers. Within 2-3 years, we had around 60% of the Saudi Arabian market in stainless steel housewares!
I thank the customer, who was my best Marketing Guru
Read one of your blog item today. You definitely are an inspiration for everyone who knows you and for all those who read your articles 🙂
Read ur blog
Managerial Guru was one of its kind Imprinted on memory cortex!?
Very nice article indeed.. A very practical lesson for budding entrepreneurs
I have read each posting on your blog. Very inspiring, as well as educating.
Very interesting… Surely i will try to follow you…
Thanks a lot.
Hi Badri kaka, I did not got chance to read your blogs until now … It is very very informative and educational … Thanks a million for sharing your experience with us. PS: I am preparing myself and my notes to add in your ‘Conquering Mt Rainier’ blog entry :).
This is Nirmala Shrestha, my husband forwarded your blog, he wish I go through your valuable life experience from which we can learn a lot in life. Its indeed wonderful, interesting and very useful…. Hope to receive more, lovely reading