April was rough. Our 21700 cell supplier in Huizhou sent us a notice on the 8th saying our allocation was getting cut by about 35% for the month. They had a bigger e-bike customer take priority. I been buying from them since 2019 and they never did this before.
We had 14 open orders that needed cells. Three were Australia jobs Brad was managing, two big USA construction wholesalers, the rest smaller. I called the Huizhou plant manager twice. He was honest, said even with relationship he cant move the numbers. Suggested we try a second source in Dongguan but their cells we tested last year had inconsistent capacity, like 4600mAh nominal but some came in at 4200.
Brad jumped on the phone with Australia first. He told them straight, we can ship 60% of the order on time, the rest in 3 weeks. Most accepted. One customer in Brisbane pushed for full quantity or full cancel, we lost that one. About $38,000 USD walked.
Henry handled the USA side. He offered a small price break, like 3%, to hold the customers through the delay. Both took it. We ate the margin but kept the relationship which is what matters long term.
The thing that bothered me most is we had no warning. Our purchasing person, Lao Zhang, had been telling me for months we should keep 8 weeks of cell inventory not 4. I kept saying no because cash flow. Now I think hes right. Cells dont expire fast if you store them at 40% charge in the cool room.
So starting May we moved to 6 weeks inventory and Im targeting 8 by end of summer. Costs us maybe 80,000 RMB tied up but the alternative is losing customers again.
Brad said something I keep thinking about. He said customers will forgive a delay if you tell them early, but they wont forgive being lied to about a ship date. Thats going on the wall in the office.
