5 proven ways to do businesses with China suppliers

By justchinait
 / 
December 15, 2020
 / 

Create a win-win situation

Always remember to motivate your Chinese business partners. It is necessary to clearly let them know the benefits they can obtain in cooperation and ensure that a win-win situation can be maintained in each transaction.

When I first started building an electronic product company, I had no money in the bank and no venture capital. When I placed an order for 30,000 electronic products from some Chinese factories, all the manufacturers sent me quotations. I chose the best cost-effective one. Then I told them that what I want is a trial order, and only 80 units are currently needed. They refused to cooperate with me because the small orders could not make them profitable, and disrupted their production arrangements.

Later I discovered that the companies I sought for cooperation were very large, but the quotations I received were “Chinglish” and were very unprofessional. There can be 15 different fonts and colors in a table without a central content, and the product description does not achieve the effect they want. Their electronic product user manuals have no logic at all, and many of them are not illustrated.

I spent a few days redesigning the electronic product manuals for this manufacturer. I sincerely told them: “I am not capable of bringing you huge orders, but I can help you redesign this manual for buyers to read. I will be satisfied.” A few hours later, the manufacturer manager 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 to save the customer.)

A week later, this manufacturer manager told me that they had won many US market users. This is because their products are the most professional among many competing companies, and the product manuals are also the best. Not all “win-win” deals should be agreed. In many negotiations, I will often be asked: “Why don’t you accept our supply? We can give you a better price!” And I will tell them: “I do not accept this supply because you are not a liar I’m a fool, I need a long-term partner! I want to guarantee their profits!” (A good buyer will not only think about caring about his own profits but also for the sake of partners, suppliers, in order to achieve a win-win situation. )

Beyond the limits

Once, as a representative of the company, I was sitting in a large Chinese manufacturer conference room. At that time, I was only wearing jeans and a T-shirt. The five managers on the other side are all very formal, but only one of them speaks English.

At the beginning of the meeting, I talked to the manager who understands English, and he would translate my words to colleagues and discuss at the same time. This discussion is very serious because it involves the price, payment conditions and quality of the new order. But every few minutes, they will laugh once, which makes me feel very uncomfortable, because the topic we are discussing is not funny. I am very curious about what they are discussing and sincerely hope that there is a good translator around me. But I realized that if I bring an interpreter, they will definitely speak less.

Later, I put my phone on the desktop and recorded the entire meeting. When I returned to the hotel, I uploaded the audio file to the Internet and found several online translators to do the corresponding translation. A few hours later, I got a translation of the entire meeting, including their private conversations. I learned about their quotations, strategies, and most importantly their reserve prices. From another perspective, I have already gained an advantage in this negotiation.

Time is the best negotiation tool

In China, the price of nothing is fixed. The best tool for price negotiation is time. As soon as a Chinese businessman realizes that he is about to lose customers, he changes prices immediately. You can never let them know what they need, and you can never let them know that their deadlines are tight.

We will lock in deals and products as soon as possible so that we will not be at a disadvantage in negotiations with the Chinese. For example, the Olympic Games in July 2012 will definitely arouse the demand for large-screen TVs. We started targeted negotiations in January. At that time, a good price was actually obtained, but we remained silent until February. The manufacturer owner knew that we needed this batch of goods, but we were always confused as to why we did not sign a contract. In fact, this manufacturer is the only supplier, but we lied to him and said: “We have better suppliers and basically won’t respond to you.” Then they lowered the price by more than 10% in February. !

In March, we continued to tell him that we found a supplier with a lower price and asked him if he could offer a lower price. He said that this price could not be achieved, so we entered the Cold War. After a few weeks of silence, we realized that this manufacturer would not trade at this price. At the end of March, we increased the price of the order and finally reached an agreement. The price of the order is 30% lower than the first quotation in January!

The key to negotiation is not to make the other party desperate, but to use time to lock in the reserve price of the transaction. The method of “waiting for work” can ensure that you get better deals.

Never reveal the target price

Usually someone will ask me: “What is your target price?” And I will directly say: “0 yuan!” or “Don’t ask me the target price, just give me the best price.

The Chinese have very good negotiation skills, and they will obtain business information beyond your imagination. They will use this business information to set prices. You want to make sure that your information leaks as little as possible and makes them aware that many manufacturers are bidding for your order. What you have to do is to choose the best price manufacturer 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 that your manufacturer can’t do without them. This will make them arrogant. Our bottom line is that regardless of whether the contract expires, as long as the other party cannot meet our requirements, it will immediately refer to the partnership. At any time, we have plan B and plan C, and we have to make suppliers aware of this. Since we are always looking for new partners everywhere, suppliers are also under pressure, so they provide us with better prices and services. And we will also transfer corresponding offers to consumers.

When looking for suppliers, you must directly contact the manufacturer if you want an absolute price advantage. You will spend 10% more on every link involved. The biggest problem now is that no one will admit that they are an intermediary, they all claim that the manufacturer is their own, but there are still ways to check whether it is an intermediary:

1. Check their email. This method is obvious, but it does not work for all companies because some giant companies still like to use Hotmail.com email accounts.

2. Visit the manufacturer-find the corresponding manufacturer through the address on the business card.

3. Check the uniforms of employees-pay attention to the brand on the clothes.

4. Ask the production staff if you know the person who introduced the product to you.

With the above simple method, you can tell if it is a middleman.

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