Transactional or strategic?: People & Companies

We’re getting lots of random requests for machined parts, and that segment of our business remains busy.

One recent example was a business acquaintance of mine who contacted our shop requesting machining work. I had not seen him in a while and wasn’t up to date with his professional activities, but his parts request made it clear he was still freelancing some adventurous projects.

He informed me about his latest venture, developing aftermarket replacement parts for an industrial product line. He explained that the patents had expired for these items and his market research confirmed vast potential. His proposal sounded good and I knew him personally, so we moved forward.

Several days later, we met to review drawings and verify that all of the requirements were within our capabilities. As with any entrepreneur, he was confident this would be a win-win opportunity and we should be sharing in his excitement. We’ve heard lots of big stories over the years, but, occasionally, a project actually develops into something, so we were willing to listen. Of course, he needed his quotation and first batch of prototypes as fast as possible, even though these were complex parts.

Two days later, we sent him the formal quotation with a few terms and conditions to sweeten the offer, but ensuring we were fairly compensated. As with most products like this, there’s always something that will be corrected or changed before the final part is approved. This gentleman is smart, but he can’t launch such an effort without a shop’s expertise, so we quoted accordingly.

After a couple of days, his response was a common one. He wanted to issue a purchase order for a small set of prototype parts at the high-volume price, even though we don’t machine prototype quantities at production prices. He assumed we’d be so convinced of the pending “opportunity” that we’d willingly make his test run at the lower price.