Cut price?

I’d wager there are millions of buyers out there today wishing they had never bargained down the price of their supplies. “Oh, but it’s normal,” I hear lots of you reply, “It’s the normal game never to accept the first quote.” Well, I don’t think so, and I have a lot of background to support my view. For example, in our own business we have a simple but effective rule. We quote the lowest price we can afford for a commercial transaction.

We are very happy if you accept and very sad if you don’t. But we realise both possibilities. If you try to negotiate the price lower, we add 25% to it. This is totally reasonable because you have declared yourself to be a difficult client who will need a lot more servicing than is necessary.

Remember, the rule is “willing seller, willing buyer” not “grudging seller, grudging buyer”.

I’d go further and say that everyone should look after their suppliers as well as they look after their customers. As an example of this we pay our suppliers on sight of their invoices. If there are queries, they can be dealt with later. Prompt payment gets us wonderful service, especially at a time of crisis. But service or not, crisis or not, I think fair treatment of suppliers is a prerequisite for successful business. I would like to see a law about prompt payment. It could always be waived in times of major disruption, like now.

In fact, the wheels of an economy are cash flow. If we didn’t know that before, we sure know it now. As the world economy shudders to a halt there are really only two questions we need to answer about it. “What does it take to restart the economy and how long before it is up and running again as it was before?” The answers to both are unknown. They depend on the answers to critical questions about the coronavirus – what will stop it, will it recur, will it mutate and if so how cleverly, will the equatorial countries be less susceptible to it than the cooler countries, will we find a cure that stops short of killing us.

Even when we know the answers we will have a steep hill to climb to restore Confidence, the engine of an economy. Those who finance business will be cautious. They get into trouble when they are – and even more, when they aren’t. It is illogical to expect risk takers to take bigger risks when the odds are worse. Business needs to be largely logical or we would have a total collapse at a time of pandemic. There’s a lesson there, too.

The first coronavirus lesson we should learn is that excessive competition is dangerous. You may attribute the virus to a market stall in Wuhan but it is more attributable to poor hygiene.  That, in turn, is due to producing fowl in unhealthy conditions created by the crowding. All this is part of a highly competitive system that aims to produce lowest cost poultry. Cut price…cut produce…cut service…cut economy. The lights will go out on our world if we don’t learn moderation, as more than amply demonstrated by the climate (remember that?).

We have retreated slightly from the days of Greed is Good. We understand the inequity of unbridled competition.  Even in our sports we know that cheating follows excessive sparring. Cricket was originally a game of unwritten rules which amounted to fair play. Today you need a lawyer at the stumps with you before you hit a ball. It has made cricket a sadder game. And so with other sports. But the game of life is even more serious. It has been played badly for too long.

There are no laws that successfully impose reduced excess. Only the personal laws of being decent and honourable can restore our planet to a state of moderation.

And only you and I can do that.

Ian Tombleson

Our dear friend and colleague, Ian Tombleson, has died at the early age of 73. Company Secretary  and a major contributor to the New Zealand business which was part of Cerebos Pacific Ltd, I enjoyed his company for over forty years. A thoroughly gentle man, he was the only person I knew who could be quite amusingly cynical without a trace of malice. We worked together on the protracted negotiation to take over Greggs of Dunedin. He was a joy to work with.

Ian married Dulcie, a perfect partner, and they had 35 years of happy life together. Our love and prayers go out to her and her sons (Ian’s stepsons). As he rests in peace may they have many years of happy memories of someone who was a true friend and a really decent person. Amen

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