VIDEO TRANSCRIPTION: Hello, everyone. In this lecture, I’m going to give you an overview of a standard Alibaba listing. Now obviously, listings vary from product to product, the amount of effort a supplier will put into a listing, but I feel like I’ve found a listing here that kind of covers all the things that you will see on a standard listing. But please bear in mind, depending on the product, there might be some terms and variations that I’m missing. So you’re starting at the top here, we have the title of the product. I have gone for a 240ml bath jar with a spoon. So this is basically a title area where your supplier will put in the loaded keywords relevant to your product. Moving over to the left here, we have the product image. As you can see, this is basically a glass jar. They’ve modelled it with some bath salts in here, and they’ve got some other images here which are very nice. If you click on the image, you will see that you get taken through to more images and you can kind of slide through them using the arrows on the side here. If you keep going, it will show you some images that aren’t actually included with the immediate images in that top left-hand corner, you get a few extra ones and there’s also a video and some pictures of their factory, too. So you get a bit more of an overview once you click on the main photo. Okay, moving off to the left here, we have free on board reference posts. This is a common shipping INGO term which basically means that the liability for the shipment if you were to order with them, would end at them getting in on board the mode of transport of choice. So if you are ordering over ten thousand of these, you may well want to put them on a boat. It then becomes your liability and the responsibility for the shipment lies with you. This is pretty much every listing on Alibaba you will see this. You can ask for different shipping terms depending on your circumstances, but FOB is generally the way to go. Anyway, you can get your latest price here by clicking this, and this will give you a, open up a communication window with the supplier. Beneath that, we have a general overview of the price. It’s 0.57 pieces to 0.27 cents per unit, and it’s 10,000 pieces is the minimum order quantity. Now please take these as a rough overview and just get an idea of what the price is and what the minimum order quantity is. Once you open up communications with the supplier, then these are subject to change. You can offer more here, take more away there. Sometimes maybe not, I mean it depends on the supplier, what their circumstances are, but you can often get these changed with a bit of negotiation and conversation between yourself and the supplier. They’re normally very flexible on this sort of things. Underneath that we have the contact supplier button, so you can straightaway contact the supplier, go through to a messaging service on Alibaba.com and open up a line of communication with the supplier. Next to that is a start order button, this starts a trade assurance order with the supplier. Beneath that is leave messages. Now, this is kind of, you can leave the supplier a message by clicking here or, if the supplier is online, this will change to like a Chat Now and it’d be like an instant chat service. So instead of sending out an e-mail or a message using the contact supplier button, if the supplier is online when you’re online then you can have an instant chat with them, which is a lot quicker and you can find out information about the product a lot quicker, too. One other thing I should mention quickly, in the top of the image up here, you have a little heart button. This is the add to favourites button. If you click this, it should go orange and that has added it to my favourites. So now I can go to my favourites on any page on Alibaba website and reference this product very quickly. Next to the leave messages is a request for a free sample. You click this and it will take you through to a request form that you can send a supplier asking for a free sample of this product. Normally the supplier will ask that you pay for the freight and shipping, but the sample itself will be free. Heading further down, we have the information that the seller supports trade assurance, the seller’s usual payment terms, and shipping information where you can get quotes as well by clicking here. Off to the right of this is a box that gives you more details about the supplier manufacturing this product. At the top here, you have the name of the supplier and if you click on this it will take you through to the company profile. Beneath that is the number of years that the supplier has been in business, or been on Alibaba should I say, and the country of origin. Beneath that, we see that the supplier is a gold supplier with Alibaba.com, accepts trade assurance again, and has had an on-site check. We also have reviews here, they have got one review which isn’t a high amount, but they did get a 4.7 out of 5. , Alibaba transaction level rating and the number of transactions they have done in the last six months and the amount. So here it’s over $120,000 they’ve done in the last six months and that totalled to 16 transactions. Their response time is important. Now, the response time and the response rate are two metrics that you really want to pay attention to when looking a supplier. These guys are responding under 24 hours and their response rate is 85.2%. Anything under 60% on the response rates I would raise an eyebrow at, and you want that response time to always be under 24 hours. The reason for this is, at the moment this supplier’s giving you their best representation to try and get your business. Now, if these figures here are low now before you’ve even communicated with them or developed any kind of relationship with them, what’s it going to be like once they have your business? I mean, the response time, once they’ve got your money or once you’re in with them, the response time could fall away even more. And when you’re relying on quick responses and you’re relying on information quickly, on details on their orders you’ve got with them, then you want these response times to be quick now so you know that they’re going to get back to you when you really need it. Now, moving down into the meat of the listing, we will have three tabs across the top here. Again, this takes you to the company profile and their transactions overview, giving you a more in-depth look at the supplier. Beneath that are tabs. Now if you click on these, it will take you to various parts of the listing. So if we click on packaging and shipping, it will take us further down the listing to the packaging and shipping area so we can see more details on how this supplier packs and ships their products to you. Now we can jump again to their services. If we go to their services, you will see that they do label printing, so they’re in for OEM and private labelling, the different types of branding and labelling they do, packaging. They offer free samples, OEMs acceptable on lab tests and hygiene and various things like that. If we scroll down to the product description area on the listing, this is always a good sign as to how good a supplier is. You’ll see some listings on Alibaba and they are horrific on why anyone would want to send that supplier a message or engage with them in business is beyond me. You’ll see some murky, gloomy-looking image that’s just done with an old mobile phone and it’s just been thrown on an office table or something like that. This sort of thing really is off-putting to a buyer. I mean, if you’re looking to source these products and maybe part with thousands, tens of thousands of dollars, you need to be reassured within yourself that this supplier means business and they’re enthusiastic to do business with you and they’re enthusiastic about the product that they’re supplying. So when we look at this listing, you can see here that they’ve put some time into making a table and it gives an overview of details that you’ll want to know as you’re supplying or looking to source this kind of product. Going back to the listing quality, again, we can see here that they have put some time and effort into making these images look good. They modelled it here with some bath salts, they’re showing you here that there’s a label on here, you can put your logo on this label, you can have this as a private-labelled product. I dare say you could find bath salts very easily on Alibaba and maybe get these jars sent to that bath salt factory and they’ll pack them for you and the labels will already be on because these guys are going to stick the labels on and hey-ho, you’ve got yourself a nice little bath salt private label product that you can sell on Amazon or on your eCommerce store. Moving down, we have more product images. All of them are of a good standard, good quality. If you are looking to source this product and you have nothing similar, then often the factory will give you the unwatermarked images here so you can use them as a starter. So if you are looking to sell this product or start advertising it and you haven’t had time to get the product images done, then if you make a nice big order with these guys or you’ve developed a good relationship with them, you can ask them, “Can I quickly borrow these product photos? I need some just to quickly put on my Amazon listing or my website until I can get my own ones taken and sorted out.” If we click through to their company profile, this will give you more information on the factory or the supplier and is another way to gauge just how legitimate they are, as opposed to being a gold supplier, if they’re a gold plus supplier it’s, even more, a bonus. We can look at their factory photos here. There’s also a video of the factory and location, you can press that. And also, you can check here that they have had the Alibaba on-site check. Now, if you hover your mouse over that on-site check logo it will tell you on-site check, the supplier’s company premises have been checked by Alibaba.com staff to ensure on-site operations exist there. A third party verification company has confirmed the legal status of the supplier. Heading up to the top here, we have the home page, we have the product categories of all the different products that they sell. They are indeed well into the glass jar and glass packaging niche. The company profile, which is what we’re on, and giving you a great overview of what this factory is all about and what they’re doing and the contacts where you can contact them. You can also check them out with their website address at the top here and their phone number. If you go through this supplier’s product portfolio and you like their company profile, you can also save the supplier to favourites as well by clicking on the heart button there. That will save this supplier to a separate list, so you’ll have your favourite suppliers and your favourite products. So if you are looking to source a product from this supplier or you’re looking to combine products or whatever you want to do, you can save suppliers to a separate favourites list which is amazing. And that is about it for a listing overview. As stated, all product listings are different. It really depends on how much effort the factory or supplier wants to put into the listing, it depends on the product, it depends on your requirements and the information you need, but I think that this listing kind of gives you a good overview of all the common things you’ll find on any given listing on Alibaba. I hope you liked this lecture and I will see you in the next one. Thank you for watching.
Negotiation is an art that every entrepreneur should have a firm grasp on. Great business deals and offers have been made at the negotiating table or through Alibaba, enabling many firms to grow and thrive. However, like any other art, there are the wrong and the right ways of conducting a successful negotiation. You should know when to negotiate, what to negotiate on and who to negotiate with. Below are seven deadly mistakes you should avoid during a negotiation:
1. Leaving Money on the Table
A good negotiator invariably looks out for loopholes that they can turn to their advantage. Here are good examples of how clients literally leave money on the table’ for their own advantage:
Sample costs should always be credited back to you during the trial order. This is something that should be negotiated beforehand and can easily save you $100 off the trial order price.
Before placing your initial order, make sure that you are aware of the costs of the products. Stick only to your specific suppliers shortlist while negotiating to avoid wasting time with people who have no direct impact on the outcomes of the negotiation. Basing on your decisions on market price, ensure that you negotiate a price that is equally fair to you as it is to the supplier.
Reorders and negotiations
Your initial negotiation is crucial in determining how your supplier will price subsequent orders. However, as your order volumes grow, it is important that you revisit the negotiation with your supply and get them to reconsider their prices. Keep negotiating as long as you are in business because business situations keep changing.
2. Going for the Kill Too Early
A good negotiation requires an ample supply of patience from both parties. Sometimes, a negotiation is not just about negotiating. When you jump into the negotiation too early, you come across as egocentric who is solely after satisfying their own interests. This can be very off-putting, especially in China.
Before beginning the discussion, you need to establish a strong relationship with your supplier. Make them bestow their trust in you. Additionally, you need to have a firm business foundation. Do not engage your supplier before you have something tangible to offer. Patience is a virtue in business. Create meaningful relationships first, then other things will follow.
3. Negotiating Below the Price Floor
The main focus of a great negotiation is to eventually achieve mutual contentment. However, amateur negotiators think that negotiations are all about winning. They may, therefore, try to out-compete by aggressively elbowing suppliers to below their price floor.
Trying to pay suppliers less than what a product is worth is not good and looks amateurish. Factories have to make a living too and you should remember that you are doing more disservice to your business than the supplier. The suppliers also have their own interests and they are not ready to sacrifice them on the altar of your aggressiveness.
The best you can get from a supplier who feels violated by the negotiation is poor quality service or product. It is a rule of business to do all you can to protect your company. Suppliers will not be willing to compromise their business in the favour of yours.
It is a well-known fact that the Chinese are mostly peace-loving, intelligent people. It is not uncommon that they may decide to stay clear of an aggressive negotiation and leave you with the illusion that you have had your way. They will agree to work with you but provide you with poor quality products if you went below their price floor.
Communication is key when working with Chinese Suppliers. It is up to you to make sure that you are clear on what you want and not risk getting what you didn’t ask for.
4. Thinking That Price Is Everything
Keep in mind that eventually, the price alone does not matter. There are other vital factors that add to the prosperity of your business. These factors include, but not limited to favourable payment terms, timely delivery and services of great quality. It is therefore important to remember that negotiations are not just about prices. The prosperity of your business depends on other factors much broader than just the prices.
5. Forgetting to Negotiate Better Payment Terms to Increase Cash Flow
The key driver of any successful negotiation is the promise that, in the end, both parties will mutually benefit. However, you should put more focus on growing your cash flow by negotiating more accommodating payment terms. Make sure that you negotiate payment terms that are considerate of your cash flow. A good cash flow will allow room for your business to scale faster, introduce more quality services and serve a wider customer base.
6. Not Getting the Supplier to Compensate You for Defect Orders
In as much as business is about mutually accommodating each other, it would be imprudent to pay for your supplier’s mistakes. When you make an order, you deserve only what you asked for. Remember that you paid for the services and it’s up to the supplier to deliver only quality goods.If in any case, there are defects in what you have received and the supplier is only to blame for the mistake, they should be responsible for their blunder.
You will be hurting your business by acting too nice and agreeing to take spoiled goods. Your customers do not care and you will simply plunge your business into unfavourable unnecessary loses. You also need to set a precedence to the factory that you are not a walk over and mistakes will be called out.
Do not taint the reputation of your business because you are trying to get the supplier to think you are a nice business partner. Faulty goods attract negative feedback and an opportunity for your competitors to bring you down.
7. Forgetting To Negotiate Packaging, Labeling, and Shipping
Sometimes you can get carried away with setting the right price for the product and forget other important aspects of a successful shipment. There are other costs that you should put into consideration apart from the buying price of the product. These include packaging, labelling, and shipping expenses.
While thinking about these additional costs, you should brainstorm different ways in which you can cut them by getting the services done at lower prices. While negotiating with your supplier, do not forget to make every aspect of the shipment a subject of your negotiation. Consider the costs you will incur until the goods are safely in your hands. For example, you can have your labels made in China, where you can pay cheaply compared to when they are made in the US.
Finally, it is important to keep in mind that prices should not be your chief focus when negotiating with Chinese Suppliers. Understand your business needs to stand a chance of making a better negotiation. You should be in a position to know when and how to negotiate. Make sure that every negotiation is geared towards flourishing your business and enabling you to stay ahead of your competition.
Learning import negotiation skills might way down your ‘to learn list’ but it doesn’t need to be. Having the right skills and mindset from the beginning will pay dividends once you gain more experience over time.
This tutorial covers the seven core subjects to good import negotiation skills so next time you are communicating with Chinese suppliers you will better prepared to get the best possible deal.
Many sellers online, be it Amazon or eCommerce, will always go for the lowest price when communicating with suppliers. This is the obvious choice of negotiation as that is where the bulk of the money will be spent. But did you know there are many other things you can negotiate with Chinese suppliers? In fact, if done right, the other points that we will cover in this tutorial will have a much bigger impact on your bottom line than the price of the goods.
Many beginners get through the product research process, find the perfect product then strike a crappy deal with the factory. This I put down to two newbie seller fears.
The first is that they have just put their heart and soul into finding the product and are worried that by negotiating they will upset the factory and the deal will fall through.
The second is a fear of saying the wrong thing and the supplier being offended.
Both of these fears are natural. Supplier negotiation is something that most new and seasoned sellers will admit is not in their wheelhouse and they are far removed from their comfort zone.
In this Import negotiation guide you will learn the following:
- Avoid leaving money on the table by spotting common mistakes newbies and veterans make all the time.
- Learn six things you can negotiate besides price.
- Chinese mindset is completely different to the west. Learn to understand the mindset of Chinese suppliers to negotiate more effectively and get the best deal.
- Just because a price makes you profit does not make it correct. Quickly find the right price you should be negotiating for.
- Finding the boss. You will only get a small amount of leeway with sales staff. Learn how to find and communicate with the boss to get the outcomes you want.
- When negotiating you can either email, call or meet face to face. Learn which one of these you should do and when.
- You will have all of the tools and confidence needed to negotiate with suppliers
I live in London and nearly every day of the week there are markets in the streets where local people can sell the products and produce. Since I was a kid I used to buy all my food from market stalls.
Now when walking around markets you will see two types of stall.
The first are ones owned by Londoners who have grown up in the local area and have probably worked that stall all their lives. Their products will be clearly priced and that price has very little flexibility. You might be able to get a few pence off but not much and stall owner won’t be happy about it.
The second type of stalls…
are owned by immigrants from China, Africa and Eastern Europe. Their products are just as good and often better. They are all very friendly and welcoming as you walk by and look at what’s on display. But there are no price tags…
This can be quite off-putting if you are not familiar with it but the only way you can learn the price is to ask.
They will take a glance at you, maybe size you up and make a starting offer.
This first offer is always going to be high but what matters is your counter offer.
Too low and the stall owner will be offended, wave his hand and walk away.
Too high and he will accept and you have left money on the table.
There are very few places like the markets of London where these two mindsets are so starkly placed next to each other. It also perfectly illustrates how your mindset should be when negotiating with suppliers.
Forget Your Comfort Zone
It is human nature to stay in the warm, stick to the well-worn track. Only when you leave the track, start taking risks and developing a bit of thick skin does life become interesting.
Well, this is no different from import negotiation.
Your mindset is held in place by two things:
The first is the fear of failure or rejection. This is very common and something I struggle with a lot but learning to have people say “no” to you isn’t really that bad. A top Entrepreneur called Noah Kagan has many fun challenges that conquer this. One of which I did was to ask everyone on your Facebook for a $1 or £1 in my case. You wouldn’t believe how many people said no or didn’t reply and others who actually made the trip to my house and physically gave me the £1.
Noah also runs the Stranger Challenge which is another way to get you out there and break those fears. (https://appsumo.com/how-to-make-your-first-dollar/failure-olympics/stranger-challenge/)
The second is ANALYSIS PARALYSIS (put in capitals for dramatic effect). This is a disease that many sellers and entrepreneurs suffer from the world over. Once they have enough information, they keep going back and forth over the numbers. Or they keep trying to research for more information. They keep putting off making the call, or asking for a better price, or submitting the purchase order, or wiring the money.
It’s human nature but this will not move your business forward.
What to Negotiate Other Than Price to get the Best Deal
One of the golden rules when sourcing products from China is you get what you pay for.
Many sellers will always try to go for the lowest price and not for the best deal. If you order a cheap product then that product will be cheap quality. Do you think a factory is going to accept a low rock bottom price and then manufacture a high-quality product?? Not likely.
It is recommended you contact as many suppliers as possible and cast the net as wide as you can. Do not worry too much if they are trading companies for now as at this early stage you are doing research to get the market pricing.
Once you get a good amount of replies back, this should give you a “ballpark” figure and a rough idea of what the market price is and where to begin negotiating.
Please do not negotiate with all of the suppliers that have replied. This will take forever and there is really no need.
Go through the listing of the suppliers and cherry-pick out 2 or 3 of the best looking that fit the criteria you want and look the most reputable.
Take a look at the video below from our paid training courses if you are new to negotiating with suppliers or want to know what to look for on an Alibaba listing.
Quote price filtering
Some suppliers are going to quote you prices that will be high and some will be very low.
The high prices are probably marked up because of middlemen or trading companies and the low prices will either be false to get you in the door or terrible quality.
The high and low quotes should be removed from consideration and a good midpoint price should be considered.
NOTE: You will not get the best pricing on your first order.
When placing your first order with a factory, a trial order is commonplace. This will be a considerably lower amount than the factory is used to producing.
This will give you very little leverage to negotiate a better deal. Once you volumes go up, say on your trial order was 500 units and then on your second, it was 5000 you can then expect to negotiate better pricing.
So please remember not to nickel and dime your new supplier of the trial order, their margins can be tight too. If the price is good and in the ballpark then take the deal and you’ll be able to get a better deal as your volumes increase and the relationship with your supplier grows.
Getting Better Payment Terms
Cash flow is essential in any business and can be a very important negotiating tactic which is often overlooked when doing business with suppliers.
The earlier you pay your supplier the less cash you will have for other parts of your business and its expenses. Like shipping, rent, Amazon marketing.
Negotiating better payment terms means you can hold off paying your supplier until you have generated more sales and getting more cash flow to finally pay for the order.
It’s common to pay 30% up front as advanced payment and 70% before shipping or upon the bill of lading. This can get a lot better over time as your relationship and trust with the supplier develops.
Samples are an essential building block and will give you a lot of information about the product and the factory.
Remeber the sample a factory sends you is them trying to win your business and is their best representation. I had a sample a few years back show up 4 weeks later and it stunk of second-hand cigarette smoke. The factory then followed up asking if I would like to make an order…
When ordering the sample be sure to ask that the fees be credited when you place your first order. This will do two things:
First, you will, in essence, get that sample and the shipping for free.
Second, it shows the factory that you are interested in making a larger order in the future.
This is a very common practice, all you have to do is get out of your comfort zone and ASK.
Check out this video on samples and what to look when ordering your samples.
When arranging to ship your samples and trial order its standard practice to let the factory sort this out as they will probably get the best price anyway.
But after that, once your orders have increased you can negotiate the price with your freight forwarder. Shipping cost varies considerably between forwarders and it is worth shopping around and then playing them off against each other to get the best price.
The key here again is to ask!…. And sometimes be a little bit cocky. If a freight forwarder quotes you a good price go to another and ask if they can beat it. If they say yes get that quote and go back to the initial forwarder until you have the optimal price.
Be warned that shipping costs fluctuate dramatically throughout the year especially during peak season months and Chinese New Year. It’s also worth noting that most factories close during Chinese New Year and some even leading up to it.
Packaging and Labelling
Packaging options can range from a simple PP bag to a luxurious Apple-esque box. The pricing on the packaging is based on a sliding scale as well. Often times if you want a simple package or box that the factory has done before, they will be able to include it at little or no additional cost.
Note: They don’t manufacture this in-house and will outsource it to a packaging company which is normal business practice.
So it’s up to you to decide on your packaging quality that strikes a balance between the added value that the packaging brings to the customer and enhancing your brand image. Because this will come at a cost and also the time it takes to develop it.
Be careful about going with packaging that is too “cheap”. This will diminish the image of your brand and make a bad first impression when your customers receive your product. PP bags or plastic bags are an example of this.
Though you can cheaply and quickly get these made to package your products, it doesn’t do anything to help the customer experience and in fact, might even “cheapen” an otherwise quality product. This may even leave a NEGATIVE first impression in the eyes of your customers and make them more likely to look for problems and leave you a negative review.
For adding the Amazon FBA FNSKU stickers it is a no-brainer to have them printed on when arranging to package as that will save a lot of expense and time once the order has been shipped.
Make sure when you arrange to have the FNSKU printed or attached that you provide crystal clear guidelines and monitor the production process. Also, if possible, arrange a pre-shipment inspection so the risk will be reduced to pretty much zero.
Methods of Import Negotiation
There are multiple ways to communicate with your supplier during the import negotiation process both have their pros and cons. Let’s go through each of them and ill include some hints and tips.
Face to face Import Negotiation
There is a common phrase that you only get half the conversation on the phone. If that’s the case then you only get a quarter of the conversation with email or messaging.
When it comes to doing business, there is no better way to communicate with your suppliers than face to face. This not only shows a level of commitment to the relationship that cannot be beaten but you can also read their body language, facial expressions and mannerisms to gauge whether they are keen on the deal or if there is cause for concern.
There are however a few big cons with meeting your suppliers in China. The first being the time commitment. To make your trip worthwhile be prepared to spend at least 5 – 7 days in the country.
I suffer very badly with jet lag. This differs from person to person but normally I will take a few extra days if possible to compensate for this. If I don’t then I look like a zombie and productivity, let alone import negotiation is difficult.
One of the biggest advantages to meeting in China…
is being able to tour the factory. This will give you big insight into the legitimacy of the business, see any glaring problems, view their equipment, safety measures, cleanliness and certifications. You should also be able to judge if there is anything underhand going on. I have had friends who have been toured around a factory that didn’t belong to their suppliers and they had been doing business with a trading company the whole time.
Also sometimes the conditions of a factory can be terrible and to be in business with people who can’t look after their own staff speak dividends about their character.
Try to schedule a face to face meeting with a factory when trade shows or other events are taking place. One of the worlds biggest trade shows take place in China twice a year and is a must to visit. The Canton Fair has representation from all over China and if your supplier is established they will be there too. Be sure to meet them at the show and get a factory tour too if possible.
If time is a factor The Canton Fair or other trade shows are a great way to quickly size up the company you are dealing with and source new product lines too. This will get you an initial face to face meeting with the supplier which is invaluable.
Skype or Telephone Call
The next level down from a face to face meeting is a Skype or phone call and should be your go-to mode of communication with factories and suppliers. When
I started out importing and selling online I would only use email. This not only took longer but was extremely limited in the relationship that could be established. A year or two later when I finally went to meet a supplier he actually called me “The email man”…
Using Skype is extremely cost-effective and a long call to China will cost you only a small amount. The benefits, however, are huge. Not only can you get everything covered in a quick space of time but you also get a lot more information too.
For example, if you are asking a lot of questions you will be able to gauge how quickly and willingly they respond? Were they happy to answer all the questions and had good detailed answers? Or did it sound laboured? Was there irritation in his/her voice?
I had a call recently where it sounded like he was on a building site. He made no effort to go anywhere quieter and was having a conversation with someone else at the same time. This made me a little frustrated and I felt he wasn’t taking the business deal seriously.
Get To Know Your Supplier
When calling your supplier don’t just jump straight into business and start firing questions at them. You could be working with these people for many years so building some rapport and getting off on the right foot is essential. Talk about the weather over there and in your home country, sports, family or just how they’re doing. This will get you and the supplier more relaxed and settled into the call.
The main disadvantages of phone calls are language barriers. For nearly all Chinese people English is their second language and sometimes it’s easy to forget.
Try to keep the level of your English simple. Using jokes, quotes from films or metaphors can cause confusion or be misunderstood.
Speak slow simple English and ask if they understand what you have just said. After a few times of doing this with the same person, you will know their English skill and be able to adapt accordingly.
Email & Messaging
An email should really be used just for RFQ’s and initial communication. Once you have found a supplier that you like and want to move forward with than getting them on the end of a phone should be a priority.
Emails are great because you can send out loads to loads of different suppliers when enquiring about products or doing pricing research but once this is complete moving to Skype is very important.
The only other form of communication to add is a messaging service called WeChat. This is a messaging service in China that is massive and is used by everyone over there. WeChat is great for sending images or quick messages to your supplier. Send videos if there is a problem with the product or damage during shipping that needs to be addressed. It will also show that you are familiar and happy to use multiple forms of communication to build a better relationship with your supplier.
Who’s The Boss
If you are dealing with a Chinese factory then it’s important to know the key players involved. By recognizing the roles and more important the decision-making capabilities of the people involved, you can more astutely negotiate with the right people to get your desired outcome.
Sales representative — The messenger
The person that you deal with day to day from the factory during import negotiation is likely the sales representative. They handle inquiries from online platforms like Global Sources, and they normally make the rounds of trade shows like the Canton Fair. Normally this person is a millennial, has a basic if not good command of English, and is eager to do business with you.
You probably have a positive relationship with them as you are dealing with them day-to-day.
However, it’s important to know that THEY ARE NOT THE DECISION MAKER. There is a severe limit to their power and how much they can do.
Normally they don’t have the ability to decide lower pricing below what’s normally ordered, arrange extended payment terms, or agree to your modifications without permission from above. If you are negotiating one of these things, normally they will have to report this to their supervisor or to the owner directly. And he or she will then make the final call.
In fact within the organization that’s a Chinese factory, I consider it a DICTATORSHIP
The Factory Owner – The Emperor
The owner is the EMPEROR and they call the shots whether a deal can go through extended payment terms or any other decision that is to be made.
This is reinforced further and deeply ingrained in Chinese culture in terms of respect for authority figures and elders.
So the sales representative does not have the authority to make difficult decisions during import negotiation. However, they can be the messenger to the boss.
Your relationship with the sales rep can increase or decrease your chances of success. So make sure to clearly explain how your order can not only benefit you but also benefit the supplier’s business.
In cases of advanced import negotiations, if the owner is present, even if he doesn’t understand a word of English, he is giving you major “face” or respect. So this is a golden opportunity to explain your case, tell him your story if you haven’t already, and engage in negotiations.
If done properly this decision can be made during the meeting. Or at least to get the ball rolling and have the right people to follow up on finding out if they can meet your target price, x your quality problem, or make the modifications you need to stay ahead of your competition.
Remember the factory boss has ALL of the decision-making power.