What action would you have taken? explain?

Question

an industrial customer has indicated that our lubricants were priced about 5 percent higher than those being offered by our competitors. he indicated that if i would drop my price 7 1/2 percent, he would cancel his order with our competitors and buy for me. This will mean a 20,000 pesos commission for me personally. I agreed.

Answer 1

If you have the room in your price and can afford to reduce it by that much it probably wouldn't hurt.  But do you know for sure that this was true?  Maybe he was just pressuring you to drop your price.  I know of one big company that will do things like that.  They'll go to a supplier that they ordered from last year and comment that this other company has a lower price.  This puts you under a lot of pressure to drop your price and you don't even know if it's true.  I would have told them that I needed to run some numbers to see what I could do and I'd get back to them.  Then I'd do the best I could to see if that other price was true.  If they told me that I needed to make a decision right then, that says they're trying to play a game and I wouldn't do it.