This is a real accident that happened to our colleagues in our company a few years ago.
A client who contacted our colleagues from Alibaba asked us to quote him plastic playing cards. The main raw material of plastic playing cards is PVC. According to different grades, it is divided into new plastics, imitation new plastics and recycled plastics. New plastic is expensive, but the quality is the best. The price of recycled plastic is the lowest, and it is a secondary recycled plastic material. Its quality is relatively unstable. Usually the price difference between them can reach double.
Because customers are located in developed countries in Europe, the quality requirements should be relatively high. Our colleague quoted the price of a new plastic material to the customer. Since the thoughtful service of colleagues made the customer very satisfied, the customer gave friendly feedback that other suppliers quoted a lower price. If the price cannot be reduced, customers can only choose to cooperate with other suppliers. So in order to get the customer’s order, our colleague had no choice but to quote the price of recycled plastic to him, and specifically informed the disadvantages of recycled plastic. But this time the price satisfied the customer. So finally decided to use recycled plastic for production.
Next, the order contract was successfully signed with the customer. Proofing samples are confirmed correct. Entering the formal production link. The recycled plastic raw materials were ordered from the raw material factory for processing and production.
But when the mass product is produced, carry out sampling inspection. It was found that due to the unstable internal color of this batch of recycled plastics, some color spots appeared on the surface of the cards. Then take pictures and give feedback to the customer about this problem.
As the defects are not serious, the customer is in a hurry to get the goods. Re-production will delay the release cycle of new products. Therefore negotiate compensation with him, and make more products for customers in the next order according to a certain percentage.
In this project, the use of low-priced and low-quality raw materials resulted in defective products. Not only has it brought trouble to customers, but we also have to bear additional losses. There is no way to trouble the raw material factory, because what we buy is secondary recycled materials. Since then, our factory has stipulated that we will no longer accept orders for secondary recycled plastics.
At present, the network is interconnected, and the market price is becoming more and more transparent. In order to obtain orders, price wars become inevitable. The lemon effect (bad money drives out good money) will lead to bad products gradually occupying the market. The end result is that customers are not satisfied with the quality of the products, and they will feel that the quality of Chinese manufacturing is getting worse and worse. 
How to prevent bad money from driving out good money? We cannot avoid price wars, we can only stick to our bottom line. There will always be a partner who approves you. And only such a partner can go long with you.