Quoting rates is a balancing act
Finishing up with his team Jeff realised he was flying dark again. He had clients asking for quotes and the shipping rates were not available. He was going to have to make a call and hedge it again. It was a good thing there were so many different rates and fees that applied otherwise making a profit would be impossible.
Just then Rob, the financial controller, walked in looking as stern as always.
“Jeff, I have been reviewing our margins and…”
Straightening his tie, Jeff headed around the desk to cut Rob off from sitting down.
“Rob, I know. Quoting is a balancing act. We must be competitive and that means I must negotiate on rates. Sometimes we win and other times, well, we do well to break even.”
“Look at the fees we get, we still make a profit overall, and if that means I can close the large volumes we need then so be it.”
Staring back at Jeff, Rob doesn’t back down. “Jeff, that is true. But what are you doing to increase the margins? Our margins are declining. What you are doing is painful. This company won’t survive unless you find ways for us to be more competitive and that means charging higher margins.”
“Come on Rob, you know as well as I do that this is a competitive industry and we are bidding against other companies. There is very little loyalty out there. We are trying to upsell added value services but Carol’s team (operations) just can’t keep up with all the reporting. If you can get her more resources, we would really be able to push the added value services.”
“Stop deflecting Jeff, Carol and I are already talking about resourcing, and whilst margins are tight we can’t afford to hire more people. What’s Steve going to tell the board next month? That we can’t turn this around?”
Closing the door behind Rob, Jeff’s attention is immediately drawn back to the day’s fires. With a sigh, he starts returning the calls he had missed this morning.