China’s poised to be one of the, if not the, biggest economies this century. Couple that with products still being made available cheaply (although prices are rising), and sourcing your products from China is a smart bet for many Amazon merchants. RepricerExpress has three tips you should follow when getting started.
1. Focus on Cultivating Relationships Instead of Just Finding Deals
Business transactions are performed differently in the East rather than the West and it’s best summed up by the concept of ‘guanxi’. Guanxi stems from Confucianism, with the philosophy consisting of conducting transactions — any transactions, whether business or personal — based on certain hierarchies that echo filial piety (‘xiao’). It’s also important to note that each relationship stays within its bounds and can’t be transferred elsewhere (i.e. you can’t use your relationship with someone for the benefit of someone else.)
For example, when it comes to a business transaction, individuality can pave the way for more formal negotiations to take place. It’s important to build a relationship with your supplier through a personal basis first, using various communication means to establish trust, respect and face. Before you negotiate a deal, focus on getting to know your supplier on a personal level. The more solid your foundation, the more it will pay off in the long-term.
2. Research Who Your Supplier(s)/Trader(s)/Manufacturer(s) Will Be Carefully
Remember what making friends was like in preschool? All you had to do was share your Crayons and you were best friends. Sourcing products is a lot more complex than that and finding the right supplier will take time and thoughtfulness on your part.
Alibaba is a fantastic place to start out, if only because of its sheer size. You will have to do some digging around to find quality suppliers, and you can do that by sending out Request for Proposal. Be warned that you will get low-quality replies, but you can also get high-quality replies, too. Reddit has a great template you can use.
If you want to cast an even wider net, check out Global Sources. It’s not as big as Alibaba, but what it lacks in quantity it makes up for in quality. That’s because each supplier has to undergo a pre-qualification process where they’re vetted more deeply than on Alibaba. On their site, you can also find China Sourcing Reports, which offers an in-depth look at specific industries. Suppliers will be mentioned in the CSRs, giving you a more focused look at where to go next.
And if you really want to internalize the philosophy of guanxi, then head to trade shows and make contacts in person. Face-to-face interaction can be tremendously important in fostering those long-term relationships, even if you only got to meet your supplier once or twice.
3. Never Go With the First Offer Tendered
A big part of sourcing products from China is negotiating for them, and we don’t just mean about the price. Negotiate on the quality, negotiate the terms, and negotiate on the type of relationship you have. Unless you’re dealing with federal laws, pretty much everything else is open to negotiation.
But let’s say you want to haggle on the price. Keeping in mind that both you and your supplier will have a price below which you absolutely cannot go, work out the details in other areas. Maybe your supplier can offer you a lower overall price if you increase the size of your order. Or maybe there can be a discount if you pay in full upfront. What about a lower price if you sign a contract for multiple orders? There’s lots of wiggle room for both of you. Just remember what we mentioned: be sensitive about price floors, or else you may notice negative consequences elsewhere, like cheaper materials or poor packaging used for your order.
Whatever strategy you decide is best for you, put yourself in your supplier’s shoes. To paraphrase Sun Tzu, if you don’t know yourself or the other person, you will lose every time. If you only know yourself or the other but not both, you’ll win half the time. But if you know both yourself and the other person, you put yourself in a position to win every time. Another way you can win every time is with RepricerExpress. By aggressively repricing your products, you can make the most of static and dynamic situations. And to get you started, enjoy the first 15 days totally free when you sign up now.
Related: How to Find Suppliers on Alibaba