If you want sure success in business, sourcing goods from China can be a very profitable deal as; Chinese manufacturing companies offer the consumer goods at minimum prices due to the mass production of products with high-end technology. But it is not always possible to find manufacturers who offer you goods for very less price. Also, the amount depends on various factors like size of an order, nature of the product, quality of product, etc. To know how to source products from China, you need to understand the art of negotiation. Before we go further one should be aware of the factors that can help you to bring down the price of an order. Here are few of such elements:
Size of order: No one would like to engage in a short term deal which causes more expenses than the profit. The producer may agree to give you some concession in price if you place bulk order. Production of a particular product takes a lot of effort and customization in the manufacturing unit. New plans and technique are implemented which makes a lot of energy. Goods produced in small quantity tend to incur more cost in comparison to mass production. Therefore, the manufacturer has a lot of margin while doing mass production and has capability to offer you goods for a slight lesser price.
Quality of the product: The price is directly proportional to the quality of the product. Better would be the condition, and more would be the price. To produce a quality product it takes good quality factors of production such as skilled laborers, good quality raw materials, proper supervision, more capital to afford high-end technology, etc. If you compromise on any of such factors, it would eventually affect the quality of the final product. If you want your product to be useful in a condition, you must stop haggling price and vice versa, because the manufacturer would adjust it either way.
Future orders: If you agree with the manufacturer to place future orders with him, he may decide to negotiate the price as he would be able to see the potential business with you. Lowering the rate too much might compel the producer on compromising the quality of the product as he has his public share in profit and no one works for free. Even if you are placing bulk orders, one can only negotiate up to a substantial extent, so that both parties stay in profit.
Nature of product: The price varies depending on the quality of the product up to a great extent. There can be both perishable and non-perishable products that add up to the cost of a product. For example, frozen and perishable food items require a lot of money in packaging, storage, and transportation which increases its cost and price. Likewise, the packaging of fragile items enlarges its value. One must negotiate to keep all the things in mind which affect the cost of the product even after production.
The weight of product: More would be the weight of the product more would be its transportation cost. If you are importing heavy items like laptops, furniture or metal elements, the transportation cost would be more than would eventually affect its price; while, if it is something light like clothing, fabrics, articles made of plastic, etc. You would be able to import large orders without spending much on transportation. May the transportation cost be on the manufacturer or you; it is eventually going to be drawn out of your pocket.
For a Genuine Negotiation Consider These Points:
Don’t settle for low quality: The producer might agree to lower down the price as per your desire, but there may be hidden reasons behind it. Chinese Manufacturers often deliver inferior products and delay delivery when they don’t get satisfactory profits. It is better to cancel the deal in spite of carrying out business from unrealistic grounds. Even the manufacturer has his fair share in the profit margin and price cannot be negotiated beyond a certain level.
Consider the manufacturing cost: The manufacturer has so many liabilities to fulfill along with the salaries of his employees. Power bills, raw materials, labor wage, and maintenance, etc. are the expenses borne by the manufacturer to serve you. Considering all these things the price can be negotiated genuinely.
Manufacturer’s profit: Always consider the china manufacturer has his good profit share as he has salaries to pay and he must not be born with a silver spoon in his mouth. He would also need finances to start with, so one must not surpass the manufacturer’s interest in the deal. Considering this would lead to fair dealing, timely delivery, and quality products. This way you would also be able to develop finer business relations.
Negotiation made easy! Contact your sourcing agent today and save yourself from time taking research and consultation.