Jason is the CEO of an electronic product company in the United States. In the past ten years, Jason’s company has grown from start-up to later development. Jason has always been purchasing in China. After a series of experiences in doing business in China, Jason has a more comprehensive view on China’s foreign trade business.
The following describes the whole process of Jason’s procurement in China. I hope everyone can read it patiently. It will be beneficial to you as a supplier or buyer.
Create a win-win situation
Always remember to motivate your Chinese business partners. Make sure they know the benefits of a partnership, and make sure every deal is a win-win situation. When I first started building an electronics company, I had no money in the bank and no start-up capital. When I placed an order for 30,000 electronic products from some factories in China, all the manufacturers sent me quotations. I chose the one with the best value for money. Then I told them that what I wanted was a trial order, and I only need 80 units at the moment. They refused to work with me because small orders didn’t make them profitable and disrupted their production schedule. Later I found out that the companies I sought to cooperate with were all very large, but the quotations I received were “Chinglish” and very unprofessional. There can be 15 different fonts and colors in a table, there is no central content, and the product descriptions are not as explanatory as they want. Their electronic product user manuals are even more illogical, and many are not illustrated. I spent a few days redesigning the manual of electronic products for this manufacturer, and sincerely told them: “I can’t bring you huge orders, but I can help you redesign this manual for buyers to read. I will be satisfied.” A few hours later, the manager of the manufacturer replied to me and accepted my order for 80 units, and the price was lower than the previous one. (When we fail to meet the customer’s requirements in some aspects, we can also say similar things to the customer in order to save the customer.) A week later, the manager of this manufacturer told me that they have won a lot of users in the US market. This is because of the many competing companies, their products are the most professional and the product manuals are also the best. Not all “win-win” deals should result in a deal. In many negotiations, I will often be asked: “Why not accept our supply? We can give you a better price!” And I will tell them: “I am not accepting this supply because you are not liars. Just a fool, I need a long-term partner! I want to guarantee their profit!” (A good buyer will not only think about his own profit, but also think about the partner, the supplier, in order to achieve a win-win situation. )
Out of bounds
Once I was sitting in a conference room of a large Chinese manufacturer as a representative of the company, and I was wearing only jeans and a T-shirt. The five managers on the other side were all very formally dressed, but only one of them spoke English. At the beginning of the meeting, I talked to the English-speaking manager, who would translate my words to my colleagues and discuss at the same time. This discussion is very serious because of the price, payment terms and quality of new orders. But every few minutes, they would laugh out loud, which made me very uncomfortable because we were talking about something that wasn’t funny. I’m very curious about what they’re talking about and really wish I had a good translator by my side. But I realized that if I brought an interpreter with me, they would definitely speak a lot less. Then I put my phone on the desk and recorded the entire meeting. When I got back to the hotel, I uploaded the audio file to the Internet and asked several online translators to translate accordingly. A few hours later, I had a translation of the entire meeting, including their private conversation. I learned their offer, strategy, and most importantly, reserve price. From another point of view, I have gained an advantage in this negotiation.
Time is the best negotiating tool
In China, the price of nothing is fixed. The best tool for price negotiation is time. As soon as Chinese merchants realize they are losing customers, they change their prices immediately. You can never let them know what they need or let them know that they are on a tight deadline. We will lock in deals and products as soon as possible so that we will not be at a disadvantage in negotiating with the Chinese. For example, the Olympic Games in July 2012 will definitely generate demand for large-screen TVs, and we started targeted negotiations in January. Good prices were already obtained by then, but we kept silent until February. The owner of the manufacturer knew that we needed this batch of goods, but he was always puzzled why we didn’t sign the contract. In fact, this manufacturer is the only supplier, but we lied to him and said, “We have a better supplier and basically will not respond to you.” Then they reduced the price by more than 10% in February. ! In March, we continued to tell him that we had found a lower price supplier and asked him if he could give him a lower price. He said it couldn’t be done at that price, so we got into a cold war. After a few weeks of silence, we realized that the manufacturer would not be trading at this price. At the end of March we raised the price of the order and finally reached an agreement. And the price of the order is 30% lower than the first quotation in January! The key to negotiating is not to make the other party feel hopeless, but to use time to lock in the floor price of the deal. A “wait for it” approach will ensure you get a better deal.
Never disclose target price
Usually someone will ask me: “What is your target price?” and I will directly say: “0 yuan!” or “Don’t ask me about the target price, just give me the best price. Chinese Negotiations The technology is great, they will get more commercial information than you can imagine. They will use this commercial information to set prices. You want to make sure that you have as little leakage as possible and make them aware that there are many manufacturers for your order. Bidding. All you have to do is choose the manufacturer with the best price according to your order specifications.
Always look for backup suppliers
Make sure to let your suppliers know that you are constantly looking for other suppliers. You can’t make them think your manufacturer can’t live without them, it will make them arrogant. Our bottom line is that no matter whether the contract expires or not, as long as the other party cannot meet our requirements, we will immediately refer to the partnership. At all times, we have Plan B and Plan C and make suppliers aware of this. Because we are always looking for new partners, suppliers are also under pressure, so they provide us with better prices and services. And we will also transfer the corresponding discounts to consumers. When looking for suppliers, if you want to gain an absolute price advantage, you must contact the manufacturer directly. You will spend 10% more for each link involved. The biggest problem now is that no one will admit that they are a middleman. They all claim that the manufacturer opened it by themselves, but there is still a way to check whether it is a middleman:
1. Check their email. This method is obvious, but it does not work for all companies, because some employees of the giant companies still prefer to use Hotmail.com mailbox accounts.
2. Visit the manufacturer – find the corresponding manufacturer through the address on the business card.
3. Check employee uniforms – pay attention to the branding on the clothes. 4. Ask the producer if he knows the person who introduced the product to him. With the above simple method, you can distinguish whether it is a middleman or not.
Post time: Aug-28-2022