Tips on How to Deal or Negotiate with your Chinese Suppliers – 2

NEGOTIATING WITH YOUR SELECTED SUPPLIERS
11. If you are not a fluent Chinese speaker, bring a native Chinese speaker to the negotiation- he/she will be a valuable support
12. Understand perfectly the production process
13. Be very clear on who is going to be making decisions
14. The best way to do business in China is face-to-face” Technology is great, but I do not think it is the way Chinese people are wired to work
15. “I can’t” is not in their vocabulary, so be wary if you get silence for an answer…
16. Make them recap the agreements, do not assume they understood just because you feel you were clear enough”
17. Give realistic purchase estimates. If you promise 10 more times than you are planning to buy, they will cut corners to meet their profit so it will hit you back with poor quality (they work on small margins)
18. Expect long negotiations: even points that have already been agreed will be raised again in the future
19. Pricing: Do not get obsessed with the cheapest deal. Quality has a price and you should also consider that.
20. Track commodity prices used in your products
21. Learn about your suppliers cost structure (how much goes into labor, materials cost),
22 . If your IP is involved, make sure they agree to sign a good non disclosure agreement, with non use / non circumvention  provisions

23. Make sure you have good contracts in place. It will be a good use of your money to get a China knowledgeable lawyer to draft them (so that the terms are enforceable and it covers all the points you need to cover- IP, stocks, product quality, product specifications, penalties, etc)
24. Ensure they have the machinery & capability to produce your product. Ask them to produce a few samples in front of you, even if they don’t match your exact specifications.

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