Seven ways to deal with oppressive procurement

With the increasing number of buyers in China, Chinese suppliers feel that buyers' purchases are becoming more and more oppressive. Recently, the CEConline website conducted an exporter survey, titled "What kind of purchasing behavior is the most unacceptable buyer?" 52.94% of exporters chose "China has thousands of suppliers to choose from, so I'm not afraid of you For the item not to make concessions, the rest of the results were: "passing on market pressure" accounted for 23.53%; "low awareness of cultivating or cooperating with suppliers" 17.65%; "willful development of factories and lower prices" 5.88%.

Wang Bing, deputy general manager of sales of Xi'an Hangcheng Wood-based Panel Equipment Co., Ltd., said: "Customers use large orders to reduce prices, which has reached an unbearable level."

Mainly produces and sells desktop power tools, Wang Wang, vice president and general manager of the marketing department of Qingdao Diendi Group, a small machine tool and machine tool accessory company, also said that in the past, a product of one model could be shipped in dozens or even hundreds of containers at a time, but now, a container needs to be assembled. 10 models of products, previously multiple containers were shipped to one warehouse, but now, they are shipped to multiple warehouses. "As a result, our storage and transportation workload has multiplied many times, and we have to bear the additional transportation costs," he said.

There are seven ways to deal with oppressive purchases.

1. Understand the buyer's retail price

The quotation of the supplier to the buyer is usually the initial threshold for the contact between the two parties. Of course, the buyer hopes to get the best quality and the lowest price . And the buyer's initial mentality is: China will have a lot of sources, and there is no suitable one.

At this time, the supplier needs to know more or less the current selling price and target price of the product that the buyer needs, the expenses in a series of links such as commission/shipping/logistics/warehousing, and the regular profit margin of the buyer. Through calculation, the target price is maintained to a certain degree of competitiveness (including room for further negotiation by the supplier), and then all are reported to the buyer. Even if there is lower price competition, this decent approach will often leave a good impression on buyers and increase the opportunity.

2. Develop new products

Buyers' purchases may seem simple, some are just sample processing or a bright future of cooperation makes suppliers look forward to, but the actual requirements for suppliers are far from Not so. Buyers begin to consciously adapt to suppliers, but with the passage of commodity sales cycles and the continuous improvement of consumer tastes, they will also follow the laws of the market and raise the requirements for suppliers to a higher and higher level.

Yu Zhengjiang, the development and purchasing manager of Xiamen Jinxiong Enterprise Co., Ltd., who has many years of international purchasing agency experience, believes that some suppliers rely too much on customer samples or orders, resulting in insufficient preparation for new product development. He suggested that suppliers must take the initiative to actively communicate with buyers. From the first meeting, it is necessary to collect relevant product and market information, strive to obtain many design concepts of buyers, and study and develop, take the initiative to display, and apply for modification. The final product may not simply be requested by the customer, but developed by an excellent supplier.

3. Reputation background

Reputation background includes certification of quality, management, environment, responsibility, etc., inspection records of well-known laboratories, and shipment records of well-known companies.

Taiwan-owned and Hong Kong-owned factories are more advantageous. Last year, Wal-Mart purchased Chinese goods mainly from some Hong Kong and Taiwanese processing factories. They are familiar with the processes and working methods of international purchasing giants such as Wal-Mart. A considerable number of enterprises are designed or ordered exclusively by Wal-Mart, and they have established a very close relationship with retailers.

The Diendi Group was first established in the US market. At that time, it was a better chain store, like Home Depot, and they had higher requirements for products. Wang Wang said: "By making orders from the United States, I have established a relatively good image of myself, and some customers with higher taste are willing to cooperate with us." The number of orders is very large, the price is relatively low, and the profit margin is also very thin, but enterprises need this kind of orders to boost the scale of the factory and expand the turnover. Under this premise, Diendi Group will take some such orders, which they call "promotional orders". "But we do this kind of promotional orders selectively." Wang Wang said, "The number of this type of customer group must be regulated."

How to regulate it? Diendi Group adheres to the principle that in the same region and the same type of customers, there will be choices: do not do it with every customer.

"I will only choose the customers we think are powerful and have in-depth discussions with them." Wang Wang said, "I will tell him, where is the benefit of my product? Where is the difference? What benefits can he get by doing it with us? At the same time, I will only supply you with supplies, and I will do so within a fairly long period of time." If the customer does not agree, he can only give up. In Diendi Group, such promotional orders cannot exceed 30%-40% of the business scale. Wang Wang believes that one of the characteristics of such orders is instability. If someone else bids low tomorrow, the customer will turn away.

5. Reasonable Pricing

Suppliers should know the price and price trend of the target market well, and find more reference data to set external prices. Internally, raw materials must be checked, and any cost savings in intermediate links must be actuated, including the long-term design of self-interest, the level of profit margins, and how to maintain strategic partnership with buyers, all of which must be carefully considered.

Yu Zhengjiang suggested that export companies must control price changes within a reasonable range. If it breaks the cost bottom line or cuts corners for a long time, it will inevitably lead to vicious price competition, which will hurt others and not oneself.

6. Ask customers to provide a sales plan

Those who have many years of experience in exporting can realize that a few years ago, the order quantity was neat and large. The exporter likes to take this kind of order the most. However, in recent years, importers, including end users, are reluctant to increase inventories, which means more scattered orders and shorter delivery times for suppliers.

The practice of Diendi Group is to ask customers to provide a sales plan. This is not an official order, but it needs to indicate what the demand for the product will be in the next 6 months, or 1 year. In this way, they will reserve some raw materials in advance according to the customer's plan. When the customer's small order comes, they can still organize the delivery in a short time. Wang Wang emphasized that this problem can be solved by communicating with customers, and customers can often understand the benefits of doing so. But for some products, Diendi Group still has to limit a minimum order quantity. Wang Wang said: "I ask customers to consider and help us share this pressure."

7. Re-allocation of resources

For suppliers, all production and management materials should be done as best they can. To achieve or close to the lowest cost, such as constantly looking for new upstream factories; to make good use of the employees in each position, and at the same time, to conduct overall training for employees in all processes to improve productivity.

Yu Zhengjiang lamented that there are still too few such suppliers at present, but the number is increasing. He noticed that many new factories have been in place in all aspects at the beginning of the design, and it is conceivable that their future will be very good. .

At present, more and more foreign-funded factories have settled in China, which is the flow of production bases to China. Yu Zhengjiang warned: "If China cannot reasonably learn, summarize and plan its own bases, and continuously cultivate new growth points, it will be replaced by production bases in another region."