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Do you Negotiate with Supplies in China, any tips?
Luxoria




msg:4382404
 1:52 am on Nov 2, 2011 (gmt 0)

Does anyone have any insightful tips on negotiating prices with suppliers from China?

Do they automatically pad initial quoted prices in anticipation for us requesting lower prices?

What would make a supplier more willing to lower prices? Promised quick pay, or past purchases?

So far I made three $1k+ orders, and the prices were fair. Now, other companies are quoting much lower prices. The company I want to continue purchasing from has actually increased their prices by 10%.

I found this moderately interesting article on price negotiation. : [chinawhy.net...] ,but I want to hear from people more at my level.

Edit. Adding this article as another interesting read : [resources.alibaba.com...]

 

WorkTogether




msg:4382983
 9:10 am on Nov 3, 2011 (gmt 0)

View things to remember it's worth asking about discounts and show what other prices are being offered to you. Can you guarantee them orders over the year if they agree to a price.

Be careful with suppliers offering lower prices. The quality may not be as good and end up costing more in customer service, not to mention trust issues.

votrechien




msg:4383312
 1:30 am on Nov 4, 2011 (gmt 0)

Our company relies on sourcing products from China very heavily and we generally import by the container load (of course we started off with ~$1000ish shipments!).

I have a personal blog (zero advertising, just to help out fellow entrepreneurs) here: [chineseimporting.com...] with a lot of, IMO, valuable information.

The biggest question is what are you importing? The more niche a product is, the less large the discounts will be. The suppliers will assume you know your product inside out. The more mass appeal your product, the more the suppliers will know there's a million entrepreneurs with small businesses who are looking to make a quick buck, and hence, the more opportunity for naive buyers :) Also, you have a muchhhh greater risk of encountering fraudulent suppliers.

The second thing is to remember, if you're not discussing importing by the container load, you have absolutely no leverage. You can get the market rate (Chinese price of course), but nothing lower. To determine the market rate you really have to get a few quotes. It's the most tried and true tactic in negotiation "Person A offered me the product for this price. Can you do better?". Don't lie. The factories will know if you are.

Third, price in China shouldn't be the biggest consideration. The prices in China will be ridiculously lower than North America and as long as you get quotes from a few companies, you won't get ripped off hugely. Quality of course is the most important thing. If you start demanding a very low price, you might get it but they will give you a much lower quality product without telling you (this isn't necessarily a scam- they expect you to know the fair price for a product and if you offer lower they expect you to know you must be getting a lower quality product). Other things to consider are how will the product be packaged? When will you get the shipment? Who will pay for freight? Etc etc.

Luxoria




msg:4383344
 2:41 am on Nov 4, 2011 (gmt 0)

Thank you for the detailed reply as well as the link to your blog. It's a good read.

votrechien




msg:4383370
 4:42 am on Nov 4, 2011 (gmt 0)

The company I want to continue purchasing from has actually increased their prices by 10%.


I should point out this isn't that uncommon. Depending on what you're buying, if raw materials are a large component of it, prices can be very volatile. Also, remember, inflation in China is near 9% so very roughly speaking you can expect prices to rise around this much each year. With that being said, it's also not uncommon for suppliers to work with low prices in the beginning to first get your business (your cable provider does it- why not Chinese factories?!)

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