Evaluate your pricing and marketing plan to win tenders
Posted Wednesday, June 13 2012 at 17:49
I am 27 years old and currently employed. However, I would like to do some income generating business beside my formal employment.
Already, I have a company that I registered with the aim of using it to supply goods to organisations.
I have never won a tender despite numerous applications. What is the basic criteria for tendering in Kenya that one needs to meet in order to win a tender? Please give advice.
— Eve Orembe
IT MUST BE FRUSTRATING that despite numerous applications, your business has not won any tender yet.
This, however, should not be a reason to give up, but rather a chance to evaluate how you have been bidding so as to improve your chances of success going forward.
The basic criteria for tendering varies depending on what you are bidding for. It is important to analyse each tender and draw up a plan on how to address the underlying factors so as to increase your chances of winning.
The basic reason for procuring goods through tender is to get the best deal in terms of pricing and quality. In essence, competition among the bidders will force them to quote different prices and the one who quotes the lowest price usually has the highest chance of winning the tender.
It is imperative to utilise a low-pricing strategy as a way of winning tenders. For instance, in order to reduce the unit cost of the goods you quote, buy the goods in bulk in order to get discounts.
This is critical since you are still new and without a proven track record of doing business.
Another aspect that is considered is the quality of goods supplied. It is prudent that you conduct your background search properly by identifying where you can buy quality goods at reasonable prices.
Equally important is to compare various prices since, if you can find high quality goods at more reasonable prices than your competitors, then it reinforces and significantly increases your chances of success.
Once you get the right quality, you can negotiate with the seller to consider giving you discounts if you purchase large quantities.
Once you have determined what price you will pay, you can determine the cost of each unit of the goods to be purchased.
Taking into consideration the strategy required, you will have to contend with low profit margins initially to enable you to get a foot in the business.
Another alternative which does not involve tendering is marketing. Design a marketing brochure and list the goods you can supply and their prices.
Move ahead and distribute them to the clients you are targeting. This increases your profile since you are still new in the market while offering you an opportunity to supply goods on short notice since time might be limited to ask for quotations in such situations.
It might also be useful to try and gather some intelligence on how your competition manages to stay on top; there might be other factors related to experience which you may not be able to discover when you are a starter in that line of business.
While results so far have not been positive, it is important to be patient. We wish you all the best in your endeavours.