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UP / Thumb of Michigan | I've been on both sides of this.
I sold fert and chems. Company I worked had what was then a unique company chemical manager abd policy. He forbade any chem reps from telling any of the farm center managers about any perks, trips, or anything else that would sway the recommendations one way or the other. He of course didn't have any authority over firing a chemical rep from any company. He did have the authority to tell the company their rep was not welcome to come to any of the facilities. And I saw that happen twice where a rep got black balled. Any perks were converted to a check at the end of the season from the companies offering perks- and it lowered the cost to the farm center based on sales of each.
I liked the program. We sold the best product for the job, not the one that was going to send me to the Caribbean next winter.
But- I had some pretty stiff competition close to me. Our sales margin requirements were pretty high on chemicals compared to the competition, I guess. We could get away with 5% or so cash and carry in the late fall / early winter. It was usually 15% during season. I had a guy who had little knowledge of chemicals at all in my sales area, but he was likely sub 5% most of the year. He generally sent people to me for recommendations and they went back and ordered from him. I was in a tough spot, most of the people doing this were also fertilizer customers of mine. You bite your lip and hope they remember you come spring.
When I went back to farm full time, I was in charge of input buying. I made a list of what I needed and the volume, as well as the container type if applicable. I had things to do, and I refused to beat up one supplier with quotes from another. My bid sheet went to 4 different suppliers. They each had one shot at pricing. Sometimes there were reasons not to take the cheapest, but not often. That method really screwed the guy up I mentioned in the last paragraph. He'd had a pretty good run just sitting back and pricing off of others bids. He wasn't happy when he lost the bulk of my business the first couple years. "Why didn't you come back and see me- I could have done better". "Should have gave me your best shot the first time." So, he added another wrinkle I had never thought about. Started pricing old product from usually out of the state. Some was distressed stuff, most was just old. But he got quite a lot of our business that year. Never noticed it until spring when I tried to dump a 2 1/2 of atrazine into the cone- and it wouldn't come out. I returned a couple pallets of product immediately and had to pay up to get fresh somewhere else. And- I added a sentence to my bid sheet the following year. All product must be less than one year old unless I approve otherwise. He noticed that, didn't like it, I wasn't that concerned about whether he liked it or not. Had a couple issues over the next few years with product we'd gotten from him. And, the lasty year we did anything with him, he shows up with a bunch of AMS that looked like it had been in a war. Bags were stapled up, torn, light, looked extremely weathered. Long story short, we turned the entire load of chems around and didn't buy anything from him again.
Anyway: I bought product by the price of each, not the entire bid. Either way will work for anyone I guess. I always added up the entire bid between each one for my own records to see if there was differences if I took the entire low bidder on the entire list, that was never the lowest cost price compared to how I was buying.
And the other thing to watch that I found out the hard was was to make sure the product was reasonably up to date, and also not from a different area originally. Reason for that was that I had a product failure one year on a premerge product. I had a good relationship with the chem reps and just called them directly if there was ever an issue. Rep came out, agreed that the product had not performed, and then asked where I got it from. I was afraid of that he says. Let me get back with you tomorrow. His issue was that the product had been shipped to Mississippi 4 years previous, and there was a lot of paperwork and desks the issue had to cross before he could approve a remedy. I understood he was in a tight spot, but I was relieved when he was able to get the problem fixed sooner rather than later. That was the last ordeal before the AMS problem that got the dealer on the probation list. I mean, you wouldn't pay new price for 4 year old seed corn. You wouldn't pay full price for a 4 year old pickup. And I don't know what discount for 4 year old chemical would have been appropriate, but it wouldn't have been enough for me to bite on it whatever it was. | |
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Chemical purchasing
