The cost of quoting

March 05, 2010

Quoting continues to be a huge issue among moldmakers. I periodically get calls from companies wanting to know if there are any good mold-quoting software packages out there. (Yes, there are several, but I've never talked to a moldmaker yet who really liked them.) Some create their own software, thinking they can integrate everything that's needed to come up with a good number really quickly. Generally, it still boils down to getting two or three people together to sit around a conference table, look at the drawings, and brainstorm for at least an hour about how best to build the mold, what it will take in man-hours, and what the price should be. Depending on the complexity of the mold, it can take several hours.

Most mold shops will quote just about everything that comes in, unless it's a part that's so far off their capabilities or so impossibly outlandish (like some of the RFQs from inventors) that it's obvious they don't want the job. That means that some companies spend an entire day at least once a week doing nothing but trying to get through the RFQs. So, what's the problem, you ask?

Well, quoting is a black hole. You don't get paid for quoting. You might not even get the job, and in some cases you might quote five jobs for a company before they let one job to you. If you, like a lot of moldmakers, believe that you need to quote every job or the OEM/molder won't send you another opportunity, then that's a risk you take. But if you've quoted 20 jobs for a company and still haven't gotten one, what are the odds that you'll get the next one? And, can you really capture that time that two engineers and the company president spent quoting all those potential jobs? Probably not. It's the cost of sales, you say. But do you track those costs? Do you really know what quoting is costing you?

A good marketing plan will help you better define your capabilities and your strengths, and to evaluate those customers and markets that provide the best opportunities for new business and profitability. Once you've identified these factors, you'll have a better feel for those jobs that you should quote and those jobs that should be "no bid" right out of the gate.

Moldmakers who quote everything, then throw it at the wall to see what sticks, generally end up with not much more than a wall full of spaghetti.—[email protected]

Comments (0)

Please log in or to post comments.
  • Oldest First
  • Newest First
Loading Comments...