China Product Sourcing: 3 Key Steps in Negotiating a Deal

china product sourcing negotiation

 

Many buyers have experienced the headaches, the delays or the sheer frustration of discussing pricing and commercial terms with suppliers. While this can be viewed as just a normal phase in developing a relationship in order to get to that elusive equilibrium called “doing a deal,” there are some fundamental things you can think about when trying to smooth the ride to agreement:

1) Inform the supplier in detail what you require from them.

From the first inquiry to the supplier, you should introduce your company’s business so they will understand what products you deal in and how they can help you. You have to also inform them of your purchasing plan in detail. For example, you should inform them of the models you like, as well as the quantity required for each model you will ordering.

Do not forget to prepare all the questions you want to ask them (and record the answers) concerning sizes, materials, packaging, safety certificates, etc. If you simply ask for a quotation sheet for all models, or ask them to send a catalogue, they will not treat you as a potential buyer. Take your order seriously, and hopefully they will as well — from day one.

2) Select the proper suppliers from among all the quotations.

What do I mean by “proper?” A proper supplier will:
•  Reply within a reasonable period of time
•  Introduce their company
•  Respond to all your questions clearly
•  Be professional and helpful

The supplier should sound sincere and serious, not only in the first e-mail, but also maintain a good attitude/manner throughout the negotiation process.

If a supplier only replies with one sentence (e.g. “yes, we can do that product for you”), or sounds impolite, impatient or passive, I don’t think this can lead to a good cooperative relationship. Remember, attitude is key.

3) Discuss the price and other terms with your suppliers honestly and sincerely.

When you accept the supplier’s pricing and would like to proceed further, you should discuss your trade terms. Some ideas for negotiating the first order:
•  See if the supplier will accept placing a 20% deposit before production and the 80% balance before shipment instead of the normal 30% and 70%.
•  Start with a small order quantity, and see if the supplier can be helpful or not. If a supplier is small or in a busy season, and if they think you are serious and sincere, they won’t insist on their MOQ (Minimum Order Quantity)Sincere and frank communication can lead to a successful and smooth business relationship.

Jasmine Lin is the owner of Sellwell Trading Co.,Ltd, which specializes in business trip assistance, sourcing, order supervision, coordination, warehousing, pre-inspection, consolidation, shipping assistance and project management. Learn more at www.jasmineservice.org.