One of the best ways to ensure good business with Chinese suppliers is to make sure they like you as much as possible. They will likely want something from you in return for their efforts, which means that you also have leverage over them. The three key points to remember when negotiating with a Chinese supplier are:
- Know your goals for the negotiation before you start.
- Be strategic about when to push back against a supplier and when to give in (don't just go based on what feels right).
- Always negotiate, even if it is only after lengthy negotiations, so you land at an acceptable price-e.g., "we'll pay $XX per unit" or "if we can get our numbers up by XX%, will you do this?" - these are both considered negotiating!
Knowing what your goals are before beginning negotiations is crucial to achieving them. Be strategic when you experience pushback and always continue negotiations until you are at or as close as possible to your goals.
What You Should Know Before Entering Into Business Negotiations
There are some essential things to keep in mind when negotiating with potential suppliers from China. First, while the process is far less complicated than what you might be used to in a Western country, they will likely want something in return (such as getting the product shipped at an agreed-upon price). China is the leading active supplier in the world with a manufacturing output of 28.7% as of 2019.
Before entering into business negotiations, figure out if you are looking to establish a relationship with the supplier or just looking for one-off deals. Doing so will prepare you to negotiate the correct way to achieve the goals you have set for yourself or your company.
Always do your research about what kind of company they are before contacting them in the first place--their business practices, how long they have been around, and if their reviews on sites like Alibaba are positive, etc.--and understanding where these problems stem from.
You should also be aware of cultural differences: Chinese people typically won't say "no" unless it would cause too much trouble to do so rather than just saying no outright, which is not normally socially acceptable. E-mail etiquette may differ in China as well, so when communicating via email, be sure to follow Chinese etiquette. For example, most surnames are used in front of given names, unlike in western countries.
What Tradeoffs Can You Make That Work For Both Parties?
If you don't know what's essential when negotiating business arrangements with Chinese suppliers, do your research. Look for compromises that your company can make to allow for both parties to be satisfied. Some questions you may ask yourself include:
- Is there anything they want from me in return (intellectual property rights, exporting volume commitments)?
- What concessions might they be willing to offer in exchange?"
The last thing any eCommerce company wants is an unfair deal because of their ignorance. Unless your sole goal is establishing a long-term relationship and partnering with your buyers, then these negotiations are not worth pursuing. Once you have a clear understanding of what constitutes an unfair deal, then it's time for the negotiating.
It is essential to be aware that any concessions made by one party can lead to the other side raising prices. This fact alone should make eCommerce companies more reluctant to negotiate price-related arrangements with their suppliers. There are also common business customs in China, such as not shaking hands or touching another person before initiating contact first-- this means no handshakes. For more tips you can use the help of a China sourcing agent, find the service you need here at China-Agent!