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Holding price for 2 years

1344 Views 7 Replies 6 Participants Last post by  bpfohler
I have a government customer who is obligated to put out to tender the garments we have been printing for them for the last 4 years. We have held our price without any agreement to do so. Now, part of the tender is a 2 year no minimum piece price freeze. With the guarment industry being as volitile as it has historically been, and the Canadian dollar bouncing from near par (vs the US dollar) to ~$.40 below within the last few years, any suggestions for pricing or wording that I put in my tender?

The tender is for pocketed hi-viz short and long sleeve shirts and hoodies to match.
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You haven't mentioned the volume or % or your biz they do but I would raise the price to cover risk. Otherwise let them walk
Is the Canadian $ currently weak against the US$? If it is then things could work in your favour. Add an extra 10 - 15% to your blank garment price to cover future fluctuations, and rely on earning on the printing. If the Canadian$ gets stronger then you are on the right side.

If the Canadian $ is currently strong then walk away.
We deal with government quotes and contracts. They are obligated to get a number of quotes and they have to take the lowest one. Just price the business were it is profitable for you and you know you are in the ball park with price. If not walk away. Also make sure you are paid before you send out the product. Money seems to move around with government contracts every election year. Do not work on someone's word.
Binki asked the percentage of business this contract would be. A- They are 1-2% of our bulk business.

PatW asked about the strength of the CDN dollar. A-right now it is at about 30% below the US which has been the mean for the last 3 years... last year it went to 40%- for several weeks.

KevinD mentioned get money before shipping due to government money vanishing--Fortunately, in Canada, thier government POs are iron clad on low budget items.

Thanks for the input, I think you all have given me enough feedback for me to put in my bid.
No government agency pay at front,
Mine do or at least pay before shipped.
Your assuming a lot of risk accepting a 2year freeze, you have to cover yourself. In our industry pricing in generally based on volume so if it were me, without a minimum guarantee I would price it as if they we’re each one-offs.
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