If you are thinking of starting a new business, there is no other place better than source products from China. However, dealing with Chinese suppliers is not an easy task.
Here are some tips that will help you negotiate and deal with your Chinese suppliers:
Always visit the factory or get somebody trusted to do it
What you see on a supplier’s website may have nothing to do with reality. Some manufacturers cannot produce the product you are looking for but will assure you, and crack it on time or find somebody to subcontract it.
The good news is that even if you do not have somebody based in China, there are still plenty of [China sourcing agents] (https://www.qtcmfg.com/) and inspection companies that can do this job for you. You may spend a few hundred dollars doing so, but it may save you a lot of money later.
Like QTC, the company has experience in sourcing and manufacturing a wide range of products. Most of its team members have over 10 years of experience in the industry. QTC provides many professional manufacturing suggestions to clients for free and handles from raw material to final products. Its IPQC system will make sure every product is in good condition and the company always believes “every customer deserves a high-quality product.”
Sign a well-drafted contract
We are not talking purchase orders here but a good contract that can be legally enforced and specifies all the obligations for both parties: price, payment terms, product detail specifications, delivery times, quality control procedures, etc.
Although a good contract will not save you from headaches, it will help you deal with any disputes that may arise. Without a contract you are powerless. If there are production delays, guess which customer they will leave behind in the queue- the one with no bargaining power.
The negotiation process never ends
If you believe that after the deal is signed the negotiation has finished, then I’m sorry to burst your bubble: that does not true for Chinese negotiations. Your Chinese supplier sees the agreement just as the beginning of the relationship. And especially if you have managed to get a tight quote, you will surely be hearing the sentence “I need to increase the price” soon.
Understand your supplier’s cost structure and track commodity prices that are required to manufacture your product
You need to understand your supplier’s cost ( labor cost, materials costs, mark-up, etc.).
You also need to track commodity prices that are key components in your product costs.
These two “precautionary measures” will help you deal with unexpected price increase demands, as they will allow you to assess if there is a valid reason behind the request and estimate what the fair impact on the cost will be.
Quality Control is key, even with well-established suppliers.
When it comes to sourcing from China, probably one of the best pieces of advice you can receive is NEVER RELAX, even with good suppliers.
Production monitoring and quality control are critical even when you work with your most trusted suppliers. Our perception of what “acceptable” means is quite different from your supplier’s. It is quite common for suppliers to candidly approach buyers questioning why they can’t take a product that is not meeting specifications if it still serves the purpose.