Customer Case Study 1: Bacitracin Zin API Story
Retrospect
Mr. Kim is the sourcing manager for a pharmaceutical company dealing with dermatological products.
He wanted to find another bacitracin zinc manufacturer with a shorter lead time, extra micronized bacitracin zinc API powder, and better prices.
He had previously contacted at least three other suppliers in China, but he would not settle for the same price and terms they could offer him.
His plan fell short due to either the price or the technical issues.
Finally, he reached out to us through our website.
He visited us in person after several emails and a 30-minute phone call.
Then, 5 days later, he took a flight and sat with us in our office.
Challenges Ahead Of Us
Zinc Bacitracin Powder’s regular particle size distribution is 99% NMT 20 microns.
Although this specification meets the needs of all current customers for powder spray mixed with polymyxin B sulfate API powder and neomycin, Mr. Kim needs 99% NMT 10 microns at a similar price.
To get 10 microns, we need to reset specific parameters on our machine for production and testing, from small quantities to a pilot batch.
Those extra steps would require more raw materials and another spare production line for micronization.
Finally, after our thorough calculation, the PSD change will increase the cost of 10-micron bacitracin zinc powder by at least 15.8%.
How The Story Ended
The Good thing was we finally worked out both issues.
Mr. Kim’s pharmaceutical power spray also contains Polymyxin B Sulfate, but he has not used ours before for their production.
After rounds of negotiations, we finally reached a deal with Mr. Kim.
He would order bacitracin zinc and Polymyxin B sulfate powder from us so we could give him a reasonable price for bacitracin zinc micronized powder.
Meanwhile, he should order at least 100 kilograms of bacitracin zinc and 50 kilograms of Polymyxin B sulfate each year to keep the annual price stable.
How Did We Do It?
After thorough discussions and meetings with our technicians and QC team, we were able to spare one specific micronizing machine for Mr. Kim’s production.
Only in this way would the micronizing process not be too complicated for our workers.
The second issue was the price.
Though his annual demand for zinc bacitracin was low, Mr. Kim had a challenging target price.
That was also the main reason the other three suppliers could not work with him.
However, if Mr. Kim could order other APIs from our company to offset the low margin on bacitracin zinc powder, his impossible target price would become achievable.
No supplier could afford to sell him bacitracin zinc powder at that price if he had ordered only one item from other Chinese suppliers.
If they said yes to Mr. Kim, the more Mr. Kim ordered, the more money suppliers would lose.
This combined-order success turned out to be a successful negotiation lesson for the colleagues of our sister companies.
If you thought this would be the end of the story, you are wrong.
Mr. Kim ordered additional antibiotics from us after our first order, due to our good service and high quality.
He has now become a regular customer.
If you have difficulties finding the right API manufacturers in China, contact us anytime!
