This last month or two has been an uphill battle having had massive price increases in the packaging business due to plastic being a by product of fuel. During the refining process of crude oil the hydrocarbons are separated and broken down into other chemical elements that will be turned into plastic. When oil rises so does all the by products (roughly 6000) which in an around about way makes it more lucrative to steal because the prices are much higher.
Our raw material is coming from Dubai which is cheaper than the local supplier with the only downside is this is a truckload at a time and cash up front. The local supplier has increased the raw material prices by 70% so one roll of pallet wrap costing R75 six weeks ago is now well over R120. Through importing we are able to still be in the R80 range which is nearly 30-35% less.
One would automatically think this should be an easy sell, but you have to factor in the corruption which will block you from supplying. I have had two clients where the negotiations have stalled and it is not the buyer, but whoever is in charge of the buyer who is on the take. The buyer has realised this and mentioned they are now having to deal with this and guess keep quiet and act ignorant in order to keep their job. I cannot waste more time than I already have and will revisit this again in 6 months or so.
Another company where one of my sons best friends works has been sampled and we are three months in with no movement. The friend told me last night they have just received a fresh batch of supplies plus more importantly the price they paid. This is valuable information and why I have set up a meeting with one of the directors who I have spoken over the phone with before.
Today he said I must just email him the prices and told him that it was important we chat face to face as there are some things that do need discussing. He is not on the take and is a director of 3 subsidiary companies within the main holding company. He is receiving my prices and is forwarding to whoever and is not following up. I have not told him the reason for the meeting and for now happy he agreed to do so.
Whoever is on the take is most likely sharing the R80K price difference with the supplier and amounts to around $5K monthly when converting to dollars. This is $30K each over 1 year that the company is paying out and I intend to highlight this when we have our meeting. This is not an error and is deliberate because the director gave them my pricing and was told by those that use the product the test they had done was great.
Who would have thought that supplying a packaging product would be so stressful because you are dealing with so many thieves. The amount of theft happening is rampant and would love to say these are isolated instances yet I would say this is more like 7 out of every 10 new clients I have visited in the last month. Even a few referrals that phoned through for pricing are dodgy as the only explanation is they need to show they are doing their work with no intention of finding a better price.
Nothing much makes any sense besides the fact very few in charge are hands on anymore and why the corruption exists. I can spot it almost immediately yet those working there are oblivious and the only reason I know is I have worked the factory/warehouse floor so I understand the processes. Where are the admin spot checks or you yourself doing an exercise of checking prices? This takes an hour or two every 6 months and you know you are not being screwed over internally by "trusted" staff members.
It may be demoralizing to some extent, but it makes me want to push harder and why I do request meetings because yes I would like their business, but I also feel obligated to let those who I can trust know. This should not be an uphill battle and now with the products being more expensive has helped boost the theft numbers making it more lucrative.
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