Hi Joe,
You do bring up a few interesting points that I would like to address if I may.
1) You stated that the majority of RFQs you quoted were never awarded. When I started the company in 2000 hardly any were awarded online and it’s been a steady climb from there. Today nearly 70% are awarded online and that increases a little every month. We are very transparent and don't hide anything so you can see for yourself how we have grown online awards over time just click the following link and look at the most recent full month vs. a month in the past. The growth in RFQs awarded online is there for the world to see.
http://www.mfgquote.com/suppliers_success_stories.cfm
How did we fix it? We added a team of engineers and sourcing specialist that manually check and release every RFQ. Part of the quality check requires that someone from my staff speak with the buyer and verify his intention to award the RFQ. We explain to them about all the effort required for suppliers to produce quotes and that they are getting to use the system for free because they are expected to award to the member suppliers. The buyer must confirm to us that they understand and do intend to award the RFQ before it ever gets released to the marketplace. We probably have a thousand or so RFQs a month that never get released because the buyer told us he was just price shopping. And after every RFQ closes if the buyer has not awarded it within a few days, we begin calling them to get resolution. It is an expensive human intensive process, but that’s what it takes to make sure our supplier members get value.
Further, as you probably know, we have a rating system whereas buyers and suppliers rate each other. But we also show suppliers lots of stats about the buyer so you can decide if you want to invest time in preparing a quote for them. We show you their contact information, their online award percentage, the geographic award pattern (local, nationwide, overseas, etc) and we show you their award pattern graph which tells you for each RFQ they have awarded whether they awarded to the low quote, the high quote or somewhere in between. You know a lot about the buyer before you ever decide to quote.
All the above is what we had to learn and invest lots of money in over the years to make the marketplace work. So Joe, depending on when you were a member, we may deserve some of your wrath. I’d love the opportunity to let you try the system again today, at no charge of course and report your experience back here on the forum.
2) You said that you thought jobs go for less than the material. I certainly don’t think that is true. I can’t imagine why anyone would quote a job below cost unless it was just a customer acquisition strategy. It wouldn’t be a very sustainable strategy, because if it were the cheap price that got someone a customer, the minute you tried to raise prices the customer would most likely move onto the next guy trying to buy his business. You don’t want customers like that anyway. Again, we make the “award pattern” very transparent on each buyer, so if you see that a buyer consistently goes for the lowest quote, just move on. The good thing is at least on MFG.com you know it, in the offline world you have no clue as to what a buyer’s award pattern and habits are.
I would like to point out that we don’t, can’t and will not attempt to control pricing. Market pricing for precision machining is determined by what you and your peers quote and do the work for. If everyone quoted based on a $200 per hour shop rate that is what buyers would have to pay. Again, we facilitate the market the shops establish market pricing when they quote. I’m not sure why some are more competitive than others. And it’s not because they are in China…. A tiny fraction of our members are from China and they are primarily suppliers for processes that are hard for buyers to source in the U.S. We are transparent on that as well, clicking the link above will show you exactly how many and which RFQs were awarded to suppliers in China or elsewhere for that matter. It’s also important to note that we have buyer members in Europe, throughout Asia and intra-China who use
www.MFG.com as well. So the small percentage of supplier members in China using our system are not just there for U.S. buyers.
We also own
www.sourcingparts.com in Europe which feeds billions of dollars worth of European RFQs into the marketplace.
3. You said you would not recommend anyone signing a one year agreement. We have made a very conscious decision related to our annual membership policy. We would rather have a smaller number of members in for a year than thousands coming and going for a month or two at a time. It makes for a better quality marketplace, it ensures that only more successful shops that can afford the fee and make the commitment become members. Because we have a stable base of high quality suppliers, buyers keep coming back time and time again. Buyers constantly tell us the thing they love most about MFG.com is the quality of the shops that are in the marketplace responding to their RFQs, they know they can count on them.
We did try a “by the month” model a few years ago and the quality of suppliers in the marketplace deteriorated rapidly. As such our buyer retention suffered significantly. It was a little too easy for most any shop to join. Heck, with the “by the month” model we had people joining that didn’t even have a shop. They were trying to land a customer and then go start a shop. Those aren’t suppliers our buyer members want. It was a valuable lesson for us. So we decided to go back to the annual membership model.
If you think about it, our fee for a full year is less that the cost of doing a Job Shop show where you only get leads for two days vs. qualified RFQs for a full year with us. Our members are typically the shops who have and continue to invest in marketing. The exhibit at shows, they advertise in directories and participate in the online marketplace. They are shops run by owners who are good businessmen and women. Unfortunately for me, you are not going to see them here in the forum bragging about all the work they are winning.
By the way, I highly recommend Job Shop Shows and Amcon Shows as a compliment to any shop’s marketing plan. So buyers like to go to shows, some buyers like to source online. You need to be in both places. Position your shop in the paths a potential customer make take when they are looking for you. In the old days if you placed and ad in the Thomas Register and the Yellow Pages you were good. Today a buyer has many more options and it is a little more complicated and expensive to market machine shop services.
We do have a free test drive that anyone can signup for online. You can do everything except submit quotes. It just wouldn’t be fair to our paying members to allow people to try the system out for free and quote against those who paid the membership fee.
Joe obviously had an unpleasant experience with us and as I said above we may well deserve some of his wrath, but I would like to offer Joe the opportunity to try the marketplace again and report back to everyone here about his experience.
I apologize for the length of this posting and I tried not to make it commercial or an advertisement by sticking to points and facts, but I did want to address to points that Joe raised. I owed that to him for taking the time post earlier and for the investment he made with us previously.
In case you can’t tell, I obsess over making sure our members get a tremendous return on their investment. We’re not perfect, but we are working very hard to improve everyday and we care deeply about our members and the manufacturing industry.
Is there an award for the longest posting?
All the best,
Mitch