China negotiating tactics to maximize profitability

Negotiating with your supplier doesn’t just mean bargaining for a cheaper price. Here are a couple of strategies you can consider to go beyond just the price to get better terms.

Sample fees

This is particularly important for those who are just starting out with a new supplier. Most suppliers are willing to return back the sample fee upon first order usually you just need to ask for it. However, it is important to keep in mind that when the time comes for you to place your first order, this isn’t something they proactively offer up. Make sure you bring it up with your supplier and ask for the sample fee back or even better, just make the adjustment yourself when creating the purchasing order.

Compensation for product defect

When it comes to shipment of your product, defects are hardly a rarity. Don’t just send a complaint and wait for your supplier to pay back a return or give you some form of compensation. Instead, what you can do is gather evidence by asking customers to send in an image of the defective product and when you reorder, show the evidence to the supplier and ask them to include replacements in the next shipment. 9/10 times they will agree to this.

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Free shipping

A key reason for negotiating beyond pricing is that you can make up for that extra discount you want somewhere else. Particularly with a supplier you’ve regularly placed orders with or if you’re placing larger sizes, you can ask for them to cover the shipping cost. Chinese suppliers tend to be more open to the idea of free shipping rather than giving a $1000-2000 discount. If not the whole shipping cost, they are very likely to agree to at least sharing the cost of it.

Packaging costs

While your business grows, you might want to change up certain things like the packaging of your product. In most cases, you should be able to request packaging as a part and parcel of your whole product. Your supplier will usually agree to taking up the cost of it or at least splitting it with you.

The bottom line is, suppliers are used to buyers asking for a price discount. They probably have other buyers (your competitors) asking for the same discount rates or more which means you don’t get an edge when it comes to negotiating. By thinking outside the box and negotiating terms beyond the price, your suppliers will likely be less reluctant to agreeing to them.

Get similar content and learn cutting edge sourcing strategies at Global Sources Summit while applying them immediately at the co-located Global Sources trade show.

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What is Global Sources Summit

Global Sources Summit is a 3-day conference for online and Amazon sellers sourcing private label products from China. The conference will be held 27-29 October 2019 in Hong Kong.

The Summit is co-located with Global Sources Lifestyle trade show so you can also meet thousands of China suppliers at the same time.

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