Hitting a wall in order to source products from China? Do not worry or panic. You are not alone. There are several such small and medium business owners all around the world who find difficulty in sourcing products from China. If you are trying to find out suppliers and products from Chinese market, we are here to help you with all the information you want to make the process simple and accurate. The following are the tips sourcing Chinese products:
- Knowing the Market-Sourcing products requires knowing the market. Talk to several vendors to find out their modus operandi. The concept regarding products, costs and the entire market will only be available when you go around the market taking stock of the products available. You also need to learn the industry jargon to continue doing business with Chinese companies. Learning the jargon will make you eligible for concessions from the supplier. This method is extremely effective particularly in China.
- Become a Valuable Customer- Try to add some value to the business of the suppliers before negotiating the price with them. Even if you cannot contribute directly, there are indirect ways to do it to make the partnership fruitful. Letting them know regarding the amount of quantity and also assuring them regarding repeat business can help you to break the ice. However, try to do this with a pinch of salt because Chinese manufacturing companies do not have the reputation of living up to their claims.
- Altering Pattern of Demand- Purchase policy is subjected to alteration by consolidating your purchase orders. A consolidated purchase order is definitely clearer because it prevents confusion arising from orders from different departments. There is another advantage to consolidating the orders. The size of the order can be large enough to get a discount on the price of the products. It is even more helpful if you can organize a few companies to place order together instead of placing it separately. This increases the chance of order fulfilment as well as price discount. In fact, sometimes you can switch to buying a low-cost product in this way.
- Bulky Deposits on Orders- Ensure a huge deposit on orders to receive significant discount on the same. It can also offer better delivery terms and product customization. However, there are certain risks attached to this process. They are:
- In China low deposit is safer
- Chinese companies are unyielding in terms of offering discounts.
- High-Dollar Price- Transferring business to different suppliers for procuring products can enable you to get better discounts than working with a single supplier. Not just discounts, you might be entitled to other perks as well. However, there is increased risk in doing this also because you might be cheated by multiple companies.
- Be a Resourceful Customer- Be a resourceful customer and not the one who makes up issues. Issues pertaining to delivery, production and quality can damage the supplier’s profit margin. This is particularly true in the Chinese context.
- Apply a Bidding Process- To receive competitive price quotes, shop around for suppliers offering different price quotes. You will get the best quantity combined with quality of products for your business. This will also help you to know about the price structure and product structure for the Chinese manufacturers. Without competitive quoting you might end up with cheap product.
- Consider Other Aspects of Purchase- Sometimes you may not be able to negotiate price with the suppliers, but there are other aspects like bulk discounts, shipping rates and down payment which can vary depending on the supplier. For example, negotiation can be done on payment extension terms and on product warranty instead of the price. Chinese product manufacturers allow such negotiations instead of negotiating on price. In fact, negotiating on product warranty is an important thing to be considered during negotiation.
- Stop Doing Business- This is the last resort. You can always ask for a price concession before calling off terms with the manufacturer. Ensure you have another source of supply for the products before you cease doing business with the previous suppliers. However, try to avoid such circumstances.
Product sourcing agent in China requires careful probe into the market. Negotiating terms, conditions, price, and product warranty can be done by carefully examining the market conditions. Chinese manufacturers do not have a very good reputation regarding professionalism and therefore the foreign parties should be careful while doing business with them.