China Hydraulic Valve Supplier of the World’s Top 500 Companies

A hydraulic valve giant came to talk business with you. Have you started to
panic? If the other party places a large order of 1 million US dollars, which
is a big business and also a big customer, what should be done to him, such as
credit and price reduction? It seems to be not calm. From the perspective of
quotation, I listed 3 DO principles and 3 DO NOT principles for myself and our
sales department:

1. We do not pursue windfall profits, but take reasonable profits.
2. We do not do market common goods, but only benchmark SUN, HydraForce, HAWE,
Honeywell and other first-line hydraulic valve brands.
3. We do not give rebates, but only provide hydraulic cartridge valves with the
best cost performance

In fact, many people don't understand the concept of cost performance. They
think that cost performance means cheap. To understand it simply, we can use a
formula: product unit price/product life=cost performance. For example, for a
certain hydraulic valve, the price of Factory A is 100, and the service life of
the hydraulic valve is 12 months; The price of AAK is 120, and the service life
of the hydraulic valve is 24 months. The cost performance ratio of Factory A is
8.3; Similarly, the cost performance ratio of AAK is 5. This is the root cause
of AAK hydraulic valve's insistence that "although the price is 20% higher, the
service life is twice that of its peers". Of course, price negotiation is not
only a mathematical calculation, but also requires pattern and thinking.

Let me start with myself. 13 years ago, I produced hydraulic cartridge valves
for trade and earned 100,000 US dollars. Of course I was happy. Later, after
several years of accumulation, I made a total of 1 million US dollars, which is
even more pleasant. If, after a few years or over 10 years of hard work, I have
earned 10 million or 100 million yuan. Although I can't earn this money at
present, think about it. As Jack Ma of Alibaba said, "Dreams must exist in case
they come true". Let me take this order of magnitude as an example to analyze.
When you make 100,000 yuan, what is the scope of your thinking if you buy
something? What is the scope of your thinking after earning 1 million yuan? By
analogy, with 100,000 yuan, the way of thinking must be different from that
with 100 million yuan. When you have 100,000 yuan. would you like to buy a
yacht? No. When it is 10 million or 100 million, the idea will be different. A
basic truth is that when we talk about business and price, it is actually
related to the cognitive pattern and is determined by the money we earn.

10 years ago, Honeywell, one of the world's top 500 companies, came to talk
about hydraulic manifolds with me. They were satisfied with the first 2 trial
orders, and were ready to increase the purchase from AAK hydraulic valve. The
buyer specially emphasized that the delivery date should be accurate and the
quality of the hydraulic valves should be good. I asked him how to understand
the good quality of the hydraulic valves, and he said that just the current
quality, same quality as the trial orders. The quality shall not fluctuate. It
can not be the case that the first batch is good, but the third batch is not
good. I don't require the quality to be best, but cannot fluctuate. At that
time, I realized that the customers of industrial products wanted stable
quality with fewer failures, rather than the best quality. For example, the
hydraulic valve is of good quality at the beginning, but a few months later,
some screw thread was adjusted, some seal ring was replaced, and the manual
assembly was not in place sometimes. Although these are minor faults and can be
solved as soon as possible, they are very troublesome. This refers to
reliability, and they will not need to be reported for repair within a year or
even longer.

When talking about prices with key customers, what pattern and thinking height
we should have. Take this buyer of Honeywell as an example. Because I had done
business with him 3 times, I prepared some kickbacks for him privately
according to the convention. He said no, really no. He said, I purchase more
than 100 million yuan a year totally, and just more than 1 million yuan a year
from you, why should I take rebates? When 1 million yuan of business is given
to you from the Fortune 500, if you think this is a big customer, you should
offer a low price, give rebates or something others, you think too much and
think wrong. For the Fortune 500 or the global first-line brands, in fact, they
are most concerned about your quality and service. As for the price, as long as
it is not exceed their authority, it will be OK.

If you used to do small business, it is difficult to do big business. Do not
use the thinking of small boss to measure big customers. If a customer only
purchases 2 million hydraulic valves a year, and 1 million are purchased from
you, he will pay close attention to price negotiation. This has no
comparability with the purchase of more than 100 million yuan a year totally
but just 1 million yuan from you by the Global Top 500 companies. In his eyes,
he didn't raise his eyebrows for 1 million yuan, and he didn't want to bargain
with you, which is also the reason for doing business with a high-quality
customer.

In the process of our enterprise development, we will certainly encounter big
customers to talk with you about business. Don't think of an elephant in your
mind, because fixed ideas are flawed and difficult to eradicate. In general, if
we often talk business with small customers and small bosses, our pattern and
thinking will be limited. When encountering a big customer, we will not be
confident and are afraid of big customer running away, and blindly compromised.
In the end, the quality was not guaranteed, and the business with the customer
died.

Enterprises move forward in waves, from high to low. This is also a problem for
small enterprises. For small boss, once business is good, the whole world seems
to be mine. Once the business is poor, the end of the world is coming. He will
be thinking hard about whether his price is too high and has more requirements
for customers, so he starts to feel uneasy. Of course, this psychological
quality also depends on whether you earn money. If you earn money, your
psychological quality will be better. If you can't earn money, your
psychological quality will be worse. Nothing can be insisted on without a sense
of achievement.

AAK hydraulic valve, adhering to the 3 DO principles and 3 DO NOT principles,
originates from the support of the world's top 500 companies.

https://www.aakindustry.com/info-detail/hy , draulic-cartridge-valves-416

Click to Enlarge