my friends company will be out of business in 9 months....they have been given 1 years notice that their largest customer is moving to a new supplier(somehow they had the 1 year notice in their contract)..
whats the percentage of business that this one customer brings to his business?? 80 percent
his whole company is built around ONE customer....i find that absolutely CRAZY
He makes some part for sewage plants...the large customer owns 75 percent of the market....so there is no where to go
this customer asked for 25 percent price reduction...to which he said NOOOOO
i told him he should have tried to give them a price break of some sort...definately not 25 percent, but maybe 5 percent reduction and maybe a 1-2 year price freeze....something to show your trying to work with them....its a slippery slope, but by not giving an inch he has now lost his business. he has 9 months to downsize or get into a similar/different product to manufacturer...
i have ridgid rules for how i run my company....i give in and break them slightly once in a while....by being too ridgid i think it hurt him....if all my business was from 1 customer i dont think id sleep at night
any of you have these issues?
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