Some days ago, a machine tool manufacturer did a discount promotion and we helped with it. A reader left a message saying that he was originally interested in the event, but the price of the promotional machine tool even was not indicated, and he lost his interest immediately.
He wondered, why it needs various inquiries, can’t the machine tool clearly be marked the price? Isn’t it natural to sell products at marked prices?
This reader’s doubt is actually reasonable.
In modern trade activities, public quotation and clear price are the basic trade rules. From airplanes and automobiles to food and digital products, manufacturers will give clear price tags so that buyers can know the price. Especially today when the Internet is developed, many products’ open prices can be find on the Internet.
However, China’s machine tool industry has not complied with this code.
The machine tool manufacturers rarely publicly quote, they only give an approximate price range at most, and most of them adopt the “negotiable price” method. Why?
In fact, special rules are mostly bred from special soils.
The phenomenon that the machine tool industry does not make public quotations to the society is precisely due to the special domestic market environment.
Special marketing mechanism
In China, both foreign companies and domestic machine tool manufacturers generally use direct marketing and intermediate agency sales models.
Among them, agents account for a large proportion of sales.
The machine tool manufacturers generally give those agents a reserve price, and the selling price is determined by the agents themselves.
However, one machine tool manufacturer is not only having one agent, but has multiple agents at the same time, so contradictions arise.
Each agent will set the price according to its own specific situation.
If the price is open, the price of the same product will be different.
The low price is bound to have an advantage over the high price, and the customer may be robbed by others.
Therefore, the agents united their actions in a tacit manner and chose not to disclose the quotations of machine tool products.
Similarly, if the agents do not quote, it is difficult for the direct selling manufacturers to disclose their price.
Avoiding price wars
In ancient times, there was a trading method called “swallowing gold in your pocket.”
The two bargained in their sleeves in order to avoid the eyes and ears of their peers and also a price war between their peers.
Part of the reason that machine tool companies do not make public offers is to avoid price wars.
China’s manufacturing enterprises are highly competitive.
In order to gain more user base, many manufacturers will sell their products at reduced prices and fight price wars.
However, the situation in the machine tool industry is different.
You have to know, although the machine tools are expensive, but the actual profits are very low. Even some international giants keep operating at low profit every year. Under such circumstances, once the price war is waged, the damage to the enterprise could be very serious.
Therefore, in order to avoid price wars among similar products, the machine tool manufacturers have chosen not to disclose prices to the public.
In addition, due to the user’s individual needs, the optionality of the machine tool is too flexible.
In the configuration of the machine tool, such as appearance design, CNC system, spindle, guide rail, turning tool, tip, drill, fine parts and etc., users can freely choose and customize.
Too flexible options also lead to huge price differences for machine tools of the same model, and manufacturers cannot give standard prices.
It is precisely the above-mentioned reasons that lead to the phenomenon of unknown code price in the machine tool industry.
From the perspective of machine tool manufacturers, private offers may be more suitable for the specific situation of the current industry development.
But from the perspective of consumers, the lack of open prices has undoubtedly hurt consumers.
Many buyers have to make inquiries from one company to another, among which there will be some disadvantages of passing off fish eyes as pearls or something fishy.
Therefore, I hope that the development of the machine tool industry will become better and better in the future. More and more companies are able to publicly quote and clearly mark prices in a healthier market environment.
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