Negotiating with the Chinese

I’ll preface this section by pointing out negotiation is probably not one of my best attributes. Nevertheless, I’ll try to give some pointers.

Don’t Expect the 50% Off Rule to Apply

Anyone who has ever visited Asia, or better yet China, knows the 50% off rule when shopping: always start your negotiation at 50% off the quoted price.

This isn’t true when you’re importing goods from China. There is such fierce competition in China now that a supplier can no longer afford to play such pricing games.  It’s hard to say what a fair discount is, but with many of my suppliers I’m lucky to get 10%-20% off their quoted prices, and for many it’s much lower than this.
Look Beyond Price When Negotiating
There are many things to negotiate besides price when importing from China.

  • Freight Costs: Ask the supplier to pay for the cost of freight to your local port. If you’re importing a 20’ container, this can be anywhere from $2000-4000 savings.
  • Packaging Costs: Most suppliers are going to assume you want your 1000 shoes you’ve ordered packed into 4 crates loosely unless you ask other wise. Ask your supplier to include colour packaging or the like with your products.
  • Time: If you’re in a hurry for your products negotiate on the time it will take your supplier to finish the products.  This is where the 50% rule does apply: whatever time you want your products to be finished in, say 90 days, request 50% of that time, so 45 days. A general rule of thumb is Suppliers generally take twice as long to finish your products than stated.
  • Quality and Material. If a Supplier gives you a quote for 300 Denier Fabric (a type of Fabric) ask for the same price but in 600 Denier  (a more expensive fabric).

Get Multiple Quotes

There’s one sure fire negotiation tactic in China: tell them another company quoted you a much better price on the same product. For the record, this tactic works no matter if you’re negotiating with a factory in rural China or a street vendor on Nanjing Road in Shanghai.

Chinese Suppliers know their competitors very well, so this company must be real other wise they will call your bluff immediately. Also, the prices must be realistic- ideally you’ve actually received a quote from another Supplier. If you can receive 2 or 3 competing quotes, you’ll be that much better off.

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