ISSN 2330-717X

How Are Industrial Plant Equipment Software Service Sales Done? – OpEd

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A factory, an institution, a company, or a group of companies need an industrial facility, service equipment, device. First they start a market research, basically google search on the internet, identify the sellers, first the technical group vendor makes the contact, ask for information, ask for budget price, then ask for serious lowest price.

They have these tedious job done by the newest inexperienced unauthorised engineer of the buyer firm. There is always an inexperienced young professional who does not have final purchase authority against the seller.

Suppose there is a need for an industrial steam boiler or device, electronics, software. Each time you are asked to give the best, lowest price at the bottom line of the request.

In this case, what needs to be done is first to send a unit price list for the last year. This list should be 20-25% above the final best price of the buyer that you will give to the technical department.

Then the documents are passed to the purchasing department within the receiving organisation. There are people in this department who do not know much about what the goods are sold. In the organisation chart, people from the youngest unqualified personnel to the highest level step in and ask you the best lowest price without stopping. If you make a discount every time the name and demand changes, your job will not end.

As the seller moves from the technical department to the sales department, give your final buyer your real best price and fix the job there. The task of the purchasing department is to add value to the company and to go below the price received by the technical department. The more price reduction they get, the higher their personal credit will increase within the company. The owners of the company, institution, or factory expect the technical purchasing department to get a drop in the final price of at least 20-25%, there is nothing they will not stop for this price reduction, then they leave the job to time for a while, they put in front of you the lower quality offers of other companies, below those price you are told to get the job they want you to get off.

Hold tight, don’t go down in price. Once you make a discount on the price, you will open the door to this practice, the negotiation job is never end, every person who has the purchasing authority of the buyer steps in one by one and wants more discounts, the aim is to know where you stop. Where you stand, then the bargain freezes. The worst part of the business is that the top officials of the seller company step in and make personal discounts, all accounts get confused, and project becomes unable to pay the business cost.

The principle of foreign thermal power plant design software companies is to make a 20-25% discount from the list price of that year and freeze the given best price when the final price is requested. The people of our geography will not be satisfied with the discounts, especially if the business is software, “Is there any broken fake pirate software?” they ask. However, serious money is spent on software, and a lot of engineering hours are spent to develop software. Software development is not free. People of my country want to get the software for free, and they are surprised when a price is put in front of them. However, after a while, as soon as the bid is taken with pen and paper, calculator, pc excel calculations, those are not sufficient then it is necessary to use serious software to be able to bid seriously. If you do not use serious software, you cannot participate in thermal power plant tenders.

If you do not offer a good price, you cannot buy good service equipment. It is essential to comply with the “win-win” principle during trading. It has become a habit for us to look at the offers with a reckless disbelief every time and to ask for price reductions over and over again. However, accepting the best price among the offers would not be right.

Placing the order the work or equipment is not enough, the service of the facility needs proper acceptance of the equipment, the purchasing department looks only to reduce the price, not the quality of the goods, the delivery time.

If you drop the price further, other companies that you have sold before will be notified very quickly and they will demand serious discounts during renewal, leaving the business to drag on when not given. Until when? Until the technical department informs the purchase of the urgency of the facility and says “get the job done”.

If it is only to buy, they will never buy. the technical department needs the work and with their pressure, goods, services, equipment are purchased.

Last word. 

Give your final best price then stop there. What if the sale happens? Explain “the price we have given is the last price” for every discount request that will come from now on.

Haluk Direskeneli

Haluk Direskeneli

Haluk Direskeneli, is a graduate of METU Mechanical Engineering department (1973). He worked in public, private enterprises, USA Turkish JV companies (B&W, CSWI, AEP, Entergy), in fabrication, basic and detail design, marketing, sales and project management of thermal power plants. He is currently working as freelance consultant/ energy analyst with thermal power plants basic/ detail design software expertise for private engineering companies, investors, universities and research institutions. He is a member of Chamber of Turkish Mechanical Engineers Energy Working Group.

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