How To Negotiate With China Suppliers - Negotiating Guide

Source: DHgate, Tag: E-Commerce Tips

One needs to how to negotiate with china suppliers to get even lower prices. Find out the best way to negotiate overseas.

• Negotiating over price is a skill every businessperson needs to perfect. It can help the buyer get products at lower prices, thus making more profits during resale. So, do you need to negotiate with China suppliers?
  Absolutely! After all, there is no company in China that doesn't negotiate. The Chinese are the best negotiators in the world. They are not going to just hand you a quote and tell you, "Here is my price." You can expect them to negotiate if you initiate it. Knowing how to negotiate with China suppliers is an important skill if you want to succeed when dealing with manufacturers and wholesalers in China.
  In this article, I'll give you tips on how to do that effectively and how you can use price as a negotiation tool.
  What is Negotiation?
  Before we proceed, let’s, first of all, get to know what the term negotiation means. Negotiation is a dialogue of opposing propositions between two or more parties, aimed at reaching an agreement. In China, it's common for the buyer and seller to negotiate back and forth until they reach a compromise. The bottom line is, both parties are trying to get the best deal possible.

• The Best Tips on How to Negotiate with China Suppliers for Better Price
  How do you negotiate with suppliers in China? Nowadays, because of the low cost of labour and material in China, most buyers just go to Alibaba.com and search for what they want. Then they receive samples from 10-20 suppliers, choose one that suits their needs, and send them a PO (purchase order). After getting confirmation, they transfer the money to the supplier's bank account.
  Unaware of the possibility that there might be better suppliers out there who will give them a better price or better quality, most buyers are often reluctant to negotiate for better deals. So they are pretty much stuck with their choice.
  If you've ever been in this kind of situation then you already know how hard it is to negotiate with a supplier once you've already started production. And maybe you haven't even thought about it yet and are still trying to figure out how to negotiate with china suppliers.
  You should always try to negotiate with your supplier before producing anything so that you can find the best price or even get free samples first. It doesn't matter if your product range is small or big - before production begins you can always ask for a discount in price or some extra stuff for free.
  There are several strategies you can employ when negotiating with Chinese suppliers. The following are some tips that may help you get a better deal:
  Negotiate on the Price With China Suppliers
  This is the most common method of negotiating with Chinese suppliers. There are several strategies you can employ when negotiating with Chinese suppliers. For example, you can negotiate on the price by changing your order quantity. You can also negotiate on the price by changing your payment terms. To make it easier for you, here are some tips that may help you get a better price.

  • Negotiation over quantity

• Negotiation over quantity is relatively straightforward, as long as you have good reasons for doing it. For example, if your customers have said that they need more of your product, then you can ask for more discounts for ordering more units. Or if you are having a sale, you might negotiate with the supplier to get an extra discount for ordering more units. The key here is to be reasonable. Don't ask them to lower their prices by 20% just because you want to sell a few more units of this product next month.

  • Negotiation over payment terms

• Negotiation over payment terms is trickier than negotiation over quantity because most standard payment terms provided by Chinese suppliers are already quite low. You want to avoid extending payment terms beyond 30 days from the shipment date if possible because it will hurt you in the long run by increasing your working capital requirements and making it harder for your company to manage cash flow. If you have no choice but to extend payment terms beyond 30 days from the shipment date, then negotiate with the wholesaler to find out what will work best for both of you.

  • Negotiate Prices at the Beginning of the Relationship

• One of the best tips to use when negotiating with China manufacturers and wholesalers is to ensure that the negotiation for the price is done at the beginning of the relationship, not long after receiving your first order.
  When you are provided with the quotes, don’t rush to place an order. Instead, try to get the best quote before any agreement between you and your supplier. They will be more willing to negotiate with you before you become their customer than when there is already an agreement in place.

  • Order Samples first to examine the quality

• Samples allow you to confirm the kind of quality you are being offered. Before you place a large order, be sure to order samples first. This will allow you to verify product quality and negotiate pricing with confidence.

  • Negotiate Shipping Costs

• Shipping costs vary based on several factors, such as weight, size, mode of transportation, and distance to be covered.

  • Negotiate off of the Second Number that Comes out of their Mouth

• Your potential supplier will quote the first price per unit, but will probably not stick with it. In a bid to woo you, they are likely to talk about the second number. Be sure to negotiate off of the second number that comes out of their mouth, not the first number. If they say $10/unit, don't counter with $8/unit; counter with $9/unit. Then work from there. It's a psychological game: most human beings think about what is being asked of them before they think about how much they can get away with giving up. Your goal is to counteract that instinct in them by starting high and moving low so they have to start thinking about how much they'll give up instead of how much they can get away with asking for.
  Negotiation Strategies to Use
  Suppliers are often willing to negotiate, so long as you ask. You need to know how to negotiate with china suppliers to get the best possible deals. You can use a variety of strategies to do so. They just need to know how to play ball.
  Negotiating is always better than accepting the first quote you get. In fact, if you don't negotiate, you're probably overpaying for your product. In this section, we will show you the best strategies to use. Let’s go!

  • Be professional

• Don't be taken for a ride by Chinese suppliers who offer very low prices just to get your business. Know what they're going through and how they think so that you can make a good decision on whether or not to work with them.

  • Be flexible

• When you place your order, you should be ready for the unexpected changes in their terms and conditions. The China supplier might have some unexpected problems that will affect the timeline of your delivery or the quality of the product. You have to be flexible enough to accept these changes if you want to get a positive result from the negotiation.

  • Be Polite and Respectful

• Being polite is essential when you are communicating with the Chinese. You need to be aware that the Chinese have great respect for hierarchy. Hence, you need to address your suppliers using their proper titles and honorifics. You also have to address them in a very respectful manner. If you are dealing with more than one person, it is important that you address all of them at the same time and not just one person. The reason behind this is because of the fact that they believe in saving face, therefore, if you do not address them all at once and only talk to one of them, it can be seen as an insult.
  Be sure to be polite and respectful when you talk to them. This can go a long way in helping you get what you want from them. They will also be more cooperative if they know that you respect them. Try to show that you are interested in your Chinese suppliers. You can do this by asking them questions about their family or culture.
  Pricing Policies and Discounts
  Before placing an order with a new supplier, ask them about their pricing policies. Ask what discounts apply for larger orders and repeat orders. Get this information
  So how can you get a price discount from your supplier in China? There are many ways to get a price discount from suppliers in China. Most of the time, it's a question of negotiating with them.

  • Make them Regard you as a VIP

• The first thing that you need to realize is that Chinese suppliers often sell to customers at different prices. Some buyers are regarded as VIPs and are given preferential terms while others are treated as ordinary customers.

  • Become your own Middleman

• If you've ever dealt with a wholesaler or distributor, then you're probably aware that they offer "discounts" on products as an incentive for retailers to buy in bulk. But what happens if a retailer only wants one or two units? In most cases, the wholesaler will refuse to sell below the minimum order quantity (MOQ). You can avoid this problem by taking on the role of middleman between the factory and other retailers. You'll still have to pay the wholesale price, but at least it won't be inflated by the cost of an MOQ.

  • Treat Your Supplier Well

• Every supplier is always looking forward to making you their customer. This means that they will be willing to give you some discounts off of their normal pricing if they feel like you will remain an important customer or if they feel that they can get more business from you in the future.

  • Position yourself as a Customer Looking for Large Orders

If your company has placed a significant order with them, or if they believe that it is likely that your company will place more orders in the near future, then you may be able to negotiate for a lower price on your order, even if it's not a large order. If your orders have been small and irregular, then you're unlikely to get much of a discount on your current order.
Find a Reliable China Supplier
You might arm yourself with the best ways how to negotiate with china suppliers, but you might not benefit much from your skills if the supplier you are dealing with is not legit or reliable. To be sure that the goods will be sold and delivered to you as per the agreement, you must ensure that the supplier is legit and has the capacity to supply you with the quantity and quality you need.
With the advancement in technology and the internet, you can easily start your own business and cut down all the middlemen. Yes, it is possible that you can even call China for your products if you want to produce goods in bulk. But how do you make sure that you are going to get the best deal?
DHagte.com is a platform where you can directly contact China manufacturers and suppliers and negotiate with them on price. You can find the best deals here with negotiated prices from top china factories. All suppliers listed on DHgate are verified. Besides, they have a dedicated quality assurance team that ensures all suppliers listed on the website supply products that meet local and international quality standards. Try it today!
There are other different ways to go about this. You can find Chinese suppliers through the Internet or you can locate them in person. With a little effort, you should be able to locate a manufacturer that is committed to making sure that every customer is completely satisfied with the products they receive.
A good way to find a reliable supplier is by using an online forum for foreign businessmen such as Alibaba.com. This website allows businessmen to connect and help each other out with their business issues. It is helpful because it provides the opportunity to ask someone who has dealt with Chinese suppliers before what they think of their experiences thus far.
Frequently Asked Questions
Should I Negotiate a Price with a China Supplier?
Yes. Unless you know a factory's actual cost, you cannot evaluate the quality of the product and there is no way to judge whether you are being overcharged.
How do I Negotiate a Price with a China Supplier?
Explain what you want, paying attention to quality, quantity, delivery time, and packaging. Posing all your questions in writing will avoid misunderstandings and help both parties avoid embarrassment. Ask for samples first to verify quality before negotiating on bulk production prices.
How can I Tell if the Value I’m Getting is the Best?
The best way to make sure that you are not overpaying is to compare the price at which your Chinese supplier sells to other customers. Compare the total cost of purchase against the total sales revenue of your Chinese supplier. When evaluating the total cost of purchase, including import duties, freight costs (if any), shipping charges (if any), insurance costs, bank fees (if any), and taxes (if any).
Can I Trust a China Supplier with my Money?
Yes, you can trust a china supplier. People from China are very honest as long as they are treated honestly.
Conclusion
Now that you are armed with the best tips and strategies on how to negotiate with china suppliers, you can now go ahead and find the best suppliers on DHgate.com. Happy negotiations!