Two Red Flags to Watch for in Sellers
I have 2 really big red flags when talking with a supplier. So supplier, you know, vendor, service provider, MSP, OEM equipment man I don't care, you know, how what terminology you use. I'm just gonna use supplier. I have 2 major red flags when talking with a supplier about their product or service. I'm gonna talk about them right now.
Speaker 1:I'm Max Clark. This is 20 minutes Max. And my first red flag is priceless. Now I'm not talking about a solution sales process where you have to call in and talk to a seller, and that seller has to go through, you know, a solution sale or a band with you in order to build value before they tell you how much the thing costs because you can't know how much it costs before they've established value, and you validated that you actually need the thing so desperately that you're gonna buy it regardless of how much money. I'm not talking about the whole solution sales bullshit.
Speaker 1:I am talking about I am talking about whether or not a price list actually exists or not. You know if you're talking to a company that sells pins and they don't have a prescribed price for this pin in different quantities and options you know like is it black is it blue Is it 0.5 millimeter or 0.7 millimeter? Is it in quantity 1 or 500 or 10,000 or or 10 tons? If if you are interacting with a supplier about a service or product and they do not have a price list already in place for that thing you're talking to them about, that is a major red flag in my book. Now big caveat.
Speaker 1:A big caveat is is if you're talking about you're trying to do custom something. If you're doing the custom software development, if you're doing, like, custom integration, if you're doing custom migration, you know, that kind of stuff. Okay. Fine. You've gotta go through a scoping exercise.
Speaker 1:You've gotta scope the project, and you've gotta come up with a a scope of work. And then based on that, you're gonna get into, you know, a price. Fine. We're not I'm not I'm not talking about, like, those sorts of things. Now, you know, within that being said, you know, if you're dealing with, a marketing agency that all they do is is branding and logo development, you know, they're gonna probably come to you if they're if they're doing this full time.
Speaker 1:They're gonna say, oh, yeah. A logo project is $50,000 a brand identity is $50,000. Right? You know, it's $50,000. It's not like it's gonna be you know?
Speaker 1:And you can kinda see maturity again. It's kinda like maturity of their operations is what you're what you're sussing out based on price list or not no price list. Is this a mature product that exists in product if you go deal and talk to a large organization and I'm I'm not talking about like a small service provider that's like an SMB themselves of subs 50 people where they're just going out and making it happen I'm talking about somebody who's figured out how to grow in scale. In order to bring a product to market at scale, you know, you've got a you've got first, you have product teams. You have a product manager usually.
Speaker 1:Right? Maybe there's a CPO with PMs underneath them. You have an engineering team. You've got, you know, you've got some product or service that's created. Then you've got, you know, a sales and marketing team.
Speaker 1:You've got a finance team. You know, there's lots of interactions with a company that come together to create this thing that then goes out to market. If there's a price list, it means it's gone through all these different steps. You know, a PM or somebody has come up and created and said, okay, here's a definition. You've got a sales and marketing team that's come out and said, okay, here's here's our go to market motion.
Speaker 1:Here's here's the market we've identified that we're gonna take this to. Here's how we're gonna position it in market. Here's our, you know, advantages and outcomes that we're we're providing. You've had finance involvement that understands costing and whether or not they're profitable and what their margin is and what their margin is at different units and different quantities. And, you know, so, like, hopefully, I'm expressing the point here, and you get kinda where I'm going to.
Speaker 1:You know? When you when all these things come together, the output of all this stuff is a defined product, a defined service, and a defined price. It has to exist. So if you're talking to a supplier and the supplier doesn't have a defined price, there's a lot of stuff behind it that is missing that doesn't exist. This is where I come to when I say, you know, it's a huge red flag for me.
Speaker 1:Now now look. Okay. Granted, if they're a reseller and they're reselling hardware, there's variability in pricing and hardware based on supply chain and everything else that's going on in the world. But they can turn around pricing to you very quickly if they're an efficient reseller and they know what they're doing. Good VARs have real time systems.
Speaker 1:You know? So if you ask for a quote, you know, that person isn't taking out and opening up an Excel spreadsheet and then typing into an Excel spreadsheet and then, you know, calling somebody else and sending emails back and forth and then referring to something else. And then, like, you know, taking something and going, you know, 1,000 times 1.25 to add margin. By the way, it's a terrible you know, that's not how I got margin. It's divided by them.
Speaker 1:It's a really kind of just super simplistic way of of of knowing whether or not, you know, again, how mature that's that that provider is. Okay. So I I I said that that was, you know, red red flag number 1. I was gonna talk about 2 red flags. So here's my second red flag.
Speaker 1:And this happened to me not too long ago. If you're talking with somebody and you hear the phrase, we're gonna put our a team on this or we're gonna give you, you know, we're gonna put I'm gonna put my best people on this. We're gonna put our a team on some variation of that statement. Right? What I have learned from that is that is they have just warned you that the experience you have is going to be awful.
Speaker 1:Why do you have an a team and a b team and a c team and a d team and an f team? Like like, you know, again, an organization, your least common denominator is the quality of your organization. Right? And so if you're using if you're using phrases with people about, like, a team or versus b team versus c c team, it's like, what is the actual lowest common denominator? And, like, what do you actually have to have in order to be on the a team?
Speaker 1:And and what I have found consistently is when those phrases come up from a supplier, it's usually that the standard is so low that the people that stand out as that top team are still terrible to work with. They're just better than everybody else that's there. And that standard is just so low that, like, in order to actually stand out and be better that's there than everybody else that's there is just this has happened to me for, you know, over and over again for years, and I've seen this. And I just haven't really I don't think I've really, like, appreciated the information I was being given when I was being given it. And now it really stands out to me.
Speaker 1:Somebody says, oh, we're giving you our best people or giving our a team or doing this. It's just like, woah, Nelly. Do I want to proceed with this? How bad is this gonna be? Now maybe it's just a phrase of speech, but, like, you can kinda tell the difference.
Speaker 1:You know? Like, you can figure this out pretty quickly when you're talking to somebody and they use that kind of language with you. Because they usually people tell you, like, people tell you that who they are. Like, listen to them. Right?
Speaker 1:You know? Don't try to come up with, like, ideas or or reasons why they're not telling you the truth. I mean, they're telling you the truth. They're telling you who they are, and you should just listen to them. I mean, there's a lot more, you know, these red flags, but these are 2 big ones.
Speaker 1:You know? And if you if you're out in your market and you're sourcing something and you're trying to buy something, you're trying to figure out what what service provider to contract with, you're trying to do these different things. You know, red flag number 1, is there a price list? Can they describe their pricing, how they got to their pricing? And, and and number 2, you know, how are you getting their a team?
Speaker 1:And, you know, if either of those come up, maybe you should keep your search going, you know, for for another option. I'm Max Clark. Those are 2 my 2 of my red flags.
