When I first started importing, I always wondered what my suppliers would consider a big order and what they would consider a small order. Admittedly, even today I am not entirely confident on this although I have a better understanding. The table below gives my experience on how a supplier views potential orders based on their dollar amount.
|Total Order Value
||Chinese Supplier’s Perceived Value of You
|Under $500 per SKU
||Small buyer. Little incentive to negotiate on price or fight for your business; May not respond to emails, phone calls, etc. Any order will be of least priority.
|$500-$5000 per SKU
||Small buyer. Enough profit potential to offer some flexibility on pricing. Normally responds to communication requests. Some priority given to the order if the right buttons are pushed.
|$5000-$20,000 per SKU
||Serious medium/large buyer. Will offer price discounts to get your business. Order is of good priority to ensure you stay happy.
|$20,000+ per SKU
||Large buyer who must be a major player in their market. Ultimate price flexibility offered and top priority given to their orders.
This is entirely relative to the size of the supplier of course. For Foxconn, $10,000 worth of a SKU wouldn’t even get you in the door, while for other suppliers $10,000 would get you their first born. However, it gives a very rough idea of where you’ll potentially stand in the eyes of your supplier.
You’ll notice here that I am discussing order size in terms of dollar value and not literal size. All too often I hear importers and suppliers discussing/bragging about how many containers they bring in per year. If you’re discussing furniture vs jewelery, this is completing irrelevant. A few cartons of Chinese Pearls can easily be of more value than an entire container of furniture. Don’t fall into the trap of this type of thinking.
What have your experiences been when making orders? Does the table above reflect your experiences?
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