06. Low-Price Bait + Later Price Hikes

Overview

A supplier wins your order with a price far below market, then — after the contract is signed and the deposit paid — demands more money through a series of excuses. Because you've already sunk the deposit and time, you're often forced to accept, and the final total exceeds the normal market price.

How It Works

1. Ultra-low quote — 15–30% below cost or below peers, to hook inquiry, sampling, and signing.
2. Standard price-hike excuses (rolled out one by one after signing):
   • "Raw material prices went up"
   • "Exchange-rate fluctuation"
   • "You changed the design / process, so there's an extra fee"
   • "This batch is more complex than expected"
   • "Rush order — you must pay an expedite fee"
   • "Packaging / mold costs weren't included before"
3. Hostage negotiation — deposit paid and delivery promised; you're stuck and get squeezed.
4. Quality cutback fallback — if you firmly refuse to pay more, the factory recovers the "loss" by cutting corners.

Why It's Harmful

• Cost spirals — the "cheap" order ends up more expensive than market.
• Time lost — repeated haggling and stalling delay delivery.
• Quality collateral damage — if you refuse to pay more, the factory may silently downgrade quality, and you're the one who suffers.

Red Flags

• The quote is clearly below peers and market average.
• The quotation is vague and omits hidden items (packaging, mold, testing, certification, freight).
• They're unwilling to sign a price-locked formal contract.
• They repeatedly ask to "re-confirm the price" after quoting.

Solutions

1. Lock the price in the contract

State clearly:

• "This contract price is a fixed total price, including all material, workmanship, packaging, mold, testing, and certification costs, and may not be adjusted without both parties' written agreement."
• Price increases require both parties' written confirmation, and the buyer may refuse and terminate.

2. Demand a breakdown

• Require a line-item quotation: material, labor, mold, packaging, testing, and profit listed separately.
• The clearer the breakdown, the less room for later "surprise fees."

3. Compare three or more suppliers

• Quote at least 3–5 suppliers to learn the real market price.
• Treat "suspiciously low" quotes as a warning sign of traps ahead.

4. Lock key variables

• For volatile raw materials (metals, chemicals), agree on a price-adjustment formula or "locked for N months" in the contract.
• Agree on a fixed settlement currency and exchange rate.

5. Breach constraints

• Add: "Any unilateral price increase by Party B constitutes a fundamental breach; Party A may terminate and claim double the deposit or damages."

6. Beware "expedite fees" and "extras"

• Ask about all possible costs before signing and write them into the contract: "no fees beyond those listed shall arise."