We asked one of our clients to give us their impressions at a China factory visit during procurement recently. Read below to get an idea of how they felt during this trip. This is one of a series of blogs that we will title: Buyer Diary.
One of the most interested topics that businessmen are into is the negotiations with China suppliers, especially during procurement related services. Negotiations would most probably mean slashing of prices before signing the manufacturing contract; however, it is definitely more than that.
Not only before production, negotiation can occur anytime during the procurement. Either during production or post – production.
Negotiations are also not specific towards price slashing which most would assume when having procurement in China. Negotiations can be for price, time, product and many other factors which will be elaborated as the following –
Pre – production
During pre-production, the negotiation topics may be for the following, mostly concerning the purchase order –
Can your design be incorporated in manufacturing? Is it practical? These questions must be advised from the factory and may end up in long discussions. This would include details such as the material to be used for your product.
Here is where most negotiations come in. As China’s business culture is to bargain for the best price, you will see many buying agents trying to negotiate for the best price possible. Read more at Negotiating with China Manufacturers.
Especially for a rushed production, this negotiation would be very important for you and your company. Through good relationships with the factory as mentioned in China Factory Visit – Buyer Diary #1: Culture & Customs, factories would be able to help you out as and when.
During production
Especially when production did not go as well as expected, negotiations are expected to occur. Such negotiations are most intense as it affects the entire production. Even though planning could go well before production; it is likely that mistakes would occur in between. Negotiations could be for the following issues, and more –
Post – Production
As mentioned in China Factory Visit – Buyer Diary #13 Post – Production, it is often the case whereby you either finish the project smoothly, or tons of troubles come in your way. Negotiations at this phase would then depend on the progress of the procurement. Negotiations could be for the following –
This is not a comprehensive list, with many other possible issues during a procurement in China.
How should we cope with these negotiations then?
How should we be fully prepared to ensure the best scenario for our company?
With tons and tons of advice, these are a few that ODM can pin-point –
To be fully prepared for the negotiations during your procurement, make sure to browse through these pages –
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