Elksourcing：Tips for Negotiating Price with Chinese Suppliers

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Elksourcing：Tips for Negotiating Price with Chinese Suppliers

Apr 21, 2021 , , by 露露

When is the last time you negotiate price with your Chinese suppliers? It’s one of the best ways to decrease your expenses so you can realize more profit in your business. Everything is negotiable, but you should be prepared before you go to the bargaining table if you want to get the best deal. 

Negotiating with suppliers doesn’t have to be difficult, but it does pay to have a plan before you approach them. Follow below tips to get better deals with your suppliers.

1. Sell yourself as repeat business owner

Chinese suppliers are just like any other business owners: They want to sell as many products as they can, and they appreciate the customers who will help them reach that goal. When negotiating with suppliers, make sure they know you are someone who will give them repeat business, over the long term. If you have a track record of past purchases, let them know how much business they can expect from you based on those purchases. And if you’re just starting out, provide them with a sales plan that is based on logic and research.

2. Think outside of the box

If the supplier won’t budge on price, you can still negotiate for other things that will help lower your expenses. For example, you can negotiate to reduce the amount of your down payment, for a discount when you purchase in bulk, for faster shipping without additional expense to you, or for improvements to the warranty, such as its length or comprehensiveness. In addition, if you request and are granted longer terms, you will improve your cash flow. You can also ask for additional discounts when you pay your invoices early.

3. Talk to multiple suppliers

In order to encourage competitive pricing, talk to at least three suppliers and let each of them know that you are getting other quotes. Explain to them that you will go with the supplier that offers you the most competitive bid at same quality level. Don’t forget to take quality into consideration when considering the bids.

4. Offer larger deposits for a bigger discount

Suppliers are concerned about their accounts receivable just like any other business owner, so another way to secure bigger discounts is to offer large deposits on your orders. If the supplier knows they will receive 50 percent from you up front, you will increase your bargaining power, and they may be more likely to deal on the prices.

5. Don’t accept the first offer

The rules are the same when dealing with a supplier as they are in any business negotiation, and the most basic rule is to never accept the other party’s first offer. Instead, you can issue a counter offer or ask them to get back to you with a better price. You can justify this with the amount of business you’re offering to give them, the fact that you want a long-term partnership with them, or because the price includes services or features you don’t intend to use.

6. Transfer all business to one supplier

Suppliers love business owners who order a lot of products from them, and oftentimes those people get deeper discounts and other perks from the suppliers. If you’ve been giving your business to multiple suppliers, consider transferring all of it to one. But before you make the transition, call the supplier and talk to them about increased discounts in exchange for all of your business.

7. Be someone suppliers want to do business with

It doesn’t matter how much business you give your suppliers, if you’re a problem customer, you may not get the best deal because it’s too much work to do business with you. It’s important to maintain good supplier relationships by remembering that while they need you as a customer, you need them, too. Be sure to pay your bills on time, maintain open communications, and treat the relationship as a partnership, where both of you get what you need.

China Sourcing Agent

Elksourcing：Areas to Consider When Looking for a Sourcing Agent

Apr 21, 2021 , by 露露

China is becoming the major manufacturer of industrial products due to its low price and improved quality. But the diversity of products, language, culture and business practice differences pose problems for most foreign buyers and thus, having a good rapport with the suppliers is very important. This is where a China sourcing agent comes in.

Finding the right China sourcing agent is an important step to successfully sourcing products in China. Your relationship with them and their ability to deliver quality products in timely manner and at the right price will be major factors in the success of your business. 

It’s important to take your time and ask the right questions. Only proceed when you’re confident that the agent can do what they say can, and that they’re a good fit for your business. Here a few areas to consider when looking for a China sourcing agent.

1. Office in China

Do they have a fully staffed office in China? How long has it been there and how long have their staff been employed there? It is important to work with an established company with a proven track record of successfully sourcing products in China.

2. Experience in China

For most people, China is a very different country from what they are used to. The culture and the mindset are very different from the west. When vetting a sourcing agent, ask them how long have they been operating in China? Good representation will come from an agent who has been operating successfully in China for many years. Established working practices will help ensure that you get good service. They will also have built up a network of reliable contacts – which is very important part of life and business in China.

3. References

Can they provide genuine references from other businesses who have used their service? If they can provide references, you should always take the time to call to them. Ask how long they have been in business, how long they have been using the agent, what products they have sourced, what is the quality like, and can they recommend the agent. Take time to check out their website also.

4. Documentation

Ask the agent what documentation they can provide as part of the sourcing and shipping process. They should be conversant in the process and give you confidence that they know what they are talking about – based on the language that they use. Typical documents include the Bill of Lading, Certificate of Origin, packing list and commercial invoice.

5. Quality Issues

Ask what their procedure is for dealing with any quality issues that may arise. Having dealt with Chinese manufacturers for over 15 years, in general, we have been very impressed with their quality. It’s important however that the agent makes it clear to the manufacturer that they will not accept substandard levels of quality.

6. License to Trade

In China, the law is very strict on what a business can and cannot do. All businesses must have a license to trade. That license enables the business to conduct one specific type of operation. They cannot do other things which don’t match the description of their license. Ask to see the agent’s license before you start doing business with them.

7. Good English

As English is the international language of business, regardless of which Western country you come from, your primary point of contact at the agency should have a good command of spoken English. They should also have good written English as many of your communications will be in email. The same rule applies to the staff in the agent’s Chinese office. They too should have good verbal and written English as you may have to speak to them directly on occasions.

8. Process of organizing and sourcing

You have to get an insight into the sourcing strategy of the agency. A good agency is one that presents the certification requirements and product specifications of the client at the very beginning. This is proof that the agency is an incorruptible friend of the client.

Include certification requirements and product specification confirmation; Research of price, ordering a sample and choosing suppliers who qualify; First stage of negotiation of prices; Supplier selection after audition; Agreement of sales; Quality inspection; Shipping agreement, etc.

9. Field of expertise

China sourcing varies depending on the products you are buying. While some agents are good at sourcing one type of product, they might be not so good at sourcing another type of product. You have to know whether the sourcing agency you are hiring has prior experience in procuring products you want to deal with.

You can ask your agency to provide you with a record of similar orders they have handled before in the same industry. You should also ask for buyer references, so that you can get the information directly from the buyers. You might not come across a procurement agency which deals with only a specific product, but you might ask for buyer reference in the same industry. This helps in assessing if the agency is efficient or not.

10. Management

The procurement agency must have knowledge about the quality standard, certification needs and other aspects acceptable in the Western economy. Therefore, it is better if the sourcing agency has offices close the manufacturing towns, so their quality staff can easily visit the factories and do online and pre-shipment inspections frequently.

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Elksourcing：Tips for Chinese Supplier Management

Apr 21, 2021 , by 露露

Chinese supplier management allows you to build a relationship with your Chinese suppliers that will strengthen both businesses. Supplier management is not negotiating the lowest price but constantly working with your Chinese suppliers to come to agreements that will mutually benefit both companies.

1. Share Information and Priorities

The key to succeeding in supplier management is to share information and priorities with your suppliers. That does not mean that you throw open the accounting books and give them user IDs and passwords to your systems.

Appropriate supplier management practices provide only the necessary information at the right time to allow a supplier to serve your needs better. It may include limited forecast information, new product launches, changes in design and expansion or relocation changes.

2. Balance Commitment and Competition

One of the goals of supplier management is to gain the commitment of your suppliers to assist and support the operations of your business. On the other hand, the supplier is expecting a certain level of commitment from you. It does not mean that you should blindly accept the prices they provide. Always get competitive bids.

3. Allow Key Suppliers to Help You Strategize

If a supplier supplies a key part or service to your operation, invite that supplier to strategic meetings that involve the product they work with. Remember, you brought in the supplier because they could make the product or service better and/or cheaper than you could. They are the experts in that area, and you can tap into that expertise to gain a competitive edge.

4. Build Partnerships for Long Term

Supplier management prioritizes long-term relationships over short-term gains and marginal cost savings. Constantly changing suppliers to save a penny here or there will cost more money in the long run and will impact quality. Other benefits of a long-term relationship include trust, preferential treatment and access to insider or expert knowledge.

5. Seek to Understand Your Supplier’s Business 

Remember, your supplier is in business to make money too. If you are constantly leaning on them to cut costs, quality will suffer, or they will go out of business. Part of supplier management is to contribute knowledge or resources that may help the supplier better serve you. Asking questions of your suppliers will help you understand their side of the business and build a better relationship between the two of you.

6. Negotiate to a Win-Win Agreement

Good supplier management dictates that negotiations are completed in good faith. Look for negotiation points that can help both sides accomplish their goals. A strong-arm negotiation tactic will only work for so long before one party walks away from the deal.

7. Come Together on Value

Supplier management is more than getting the lowest price. Most often the lowest price also brings the lowest quality. Supplier management will focus quality for the money that is paid. In other words: value! You should be willing to pay more to receive better quality. If the supplier is serious about the quality they deliver, they won’t have a problem specifying the quality details in the contract.

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Elksourcing：Why Quality Inspection is Important?

Apr 21, 2021 , by 露露

Without proper quality control inspection, there would be a drastic increase in product recalls. Safety issues or product defects can endanger the consumer or put the seller at risk. To avoid these problems quality inspection should be done effectively by the professionals. 

In order to implement an affective quality inspection, an enterprise must first decide which specific standards the product or service must meet. The inspection process must be ongoing to ensure that remedial efforts, if required, have produced satisfactory results and to immediately detect recurrences or new instances of trouble.

1. Quality Inspection Can Enhance Product Quality

Waste is expensive and it is more likely to occur when you don’t take quality control measures. If you don’t pay attention to detail or implement processes to reduce variability, you’ll have to throw away more finished inventory, costing you the price of the labor and materials that went into producing it. Pay attention to quality inspection at every level so you can identify defective materials before you combine them with useful ones; this saves your time and effort of backtracking and spending your time and money on frustrating damage control. Ensuring customer safety saves your business money and averts damage to your reputation. It is also simply the right thing to do.

Since standards have become a symbol for products and service quality, the customers are now keen on buying their products or the service from a certified manufacturer or a service provider. Therefore, complying with standards becomes a necessity when it comes to attracting the customers. Quality inspection is a broad practice used for assuring the quality of products or services.

2. Quality Inspection Can Improve Business Reputation

Quality is an important factor when it comes to your company’s reputation. In times of Facebook, Twitter and so on, it is easy to receive bad reviews about your product. On the contrary, positive reviews let your company standout. The reputation of a company is important to succeed long-term. Don’t risk your reputation because of low quality. There is no doubt that quality control is of immense importance and contributes directly to a manufacture’s reputation and bottom line. However, micromanaging one’s manufacturing process can become tedious work; especially with all other aspects of business management to consider as well.

Compliance with regulatory conditions and standards can create unnecessary bottlenecks in production when checked near the end of the assembly line. Effective quality inspection spreads this load out evenly across the entire process, with multiple checkpoints along the way. This makes for less surprise and far fewer financial losses overall. It also plays a huge part in building consistency throughout the assembly by eliminating redundant processes and scrapped materials.

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Elksourcing：Advantages of Factory Audit in China

Apr 21, 2021 , by 露露

For the business of importing from China, choosing the right supplier is the most important thing you need to focus at beginning. A right supplier will not only produce the products at a competitive price, but also provide good service on the supply chain. 

In order to verify and select the right supplier, it is recommended to do factory audit, as there are many advantages.

1. Amplifies Performance Visibility

When companies don’t know the facts about how their suppliers are performing, factory audit tends to be based on guesses. Additionally, the simple act of measuring performance can help improve performance. This improvement can be even more dramatic when companies award additional business on the basis on suppliers meeting performance goals.

2. Uncovers Hidden Cost in Supply Chain

The supply chain is full of potential risks that can originate from suppliers in regard to corporate social responsibility. Some of these risks can be avoided by better communications between customers and suppliers. By better understanding supplier performance and supplier business practices and processes, customers can help suppliers drive waste and inefficiency out of the business, resulting in higher-quality suppliers and lower costs.

3. Leverages Supply Base 

By conducting effective factory audit, an enterprise can set a threshold for its suppliers that can lead to higher-quality results. Companies can better plan new products and services based on a good understanding of its suppliers’ capabilities and performance levels.

4. Aligns Business Practices

Ideally, suppliers should run their business in alignment with their customers; share the same business ethics, expect similar standards of excellence, show commitment to corporate social responsibility and continues improvement.

5. Mitigates Risks

Insight into supplier performance and business practices helps reduce business risk, particularly given companies’ increasing dependence on its key suppliers. Risks can be financial and operational and increase with geographic distance.

6. Improves Supplier Performance

The goal of factory audit should be supplier performance improvement. While simply measuring performance has a positive effect, factory audit can be most effective when it leads to continuous improvement activities and actual supplier performance improvement. Follow-up activities, such as supplier training and development, and corrective actions to address factory audit findings are the best ways to obtain measurable and positive results.

China Sourcing Agent

Elksourcing：What Makes a Right Sourcing Agent?

Apr 21, 2021 , by 露露

A lot of businesses reply more and more on importing from China, as China is becoming the major manufacturer for most of consumer products, because of low price and improved quality. 

However, the geographical distance, vast categories of products, language barrier, and cultural differences pose a problem for most foreign buyers. Thus, having a good China souring agent is important. The following aspects are important for you to choose a right sourcing agent.

A. Trustworthiness

A buyer should note trustworthiness is the primary factor when it comes to the selection of a sourcing agent. If you work with a dishonest sourcing agent, you will never be aware that, your sourcing agent is actually ripping you off by secretly ask the supplier for hidden commission.

A professional sourcing agent will make their golden rule that no information about the supplier should be hidden or faked to the buyer, including number of employees, market performance, reputation, registration information, real business type, product cost, quality, etc. All the communication and operation are transparent and open.

B. Communication

As English is the international language of business, your China sourcing agent should have a good command of spoken English, so you can talk online for important matters. Also, the They should also have good written English as many of your communications will be in email.

Besides, Time & Efficiency is important. Professional skills and efficient reaction can speed you up and get you ahead of your competitors. Your personal sourcing agent will provide you real-time services. If you have any questions they can help you solve immediately.

C. Product expertise

Knowledge about product and industry is a decisive factor. First, an insider has a much more comprehensive product expertise, which is required to understand what makes good quality for a certain product. Second, this may also speed up supplier sourcing and vetting procedures, as they can utilize an existing network of suppliers.

However, still it is important for you to communicate your quality requirements and product specifications.

D. Quality sense

No matter looking for products or suppliers, a good purchasing agent should guarantee the quality.

The products provided must meet the needs and requirements of customers. Supplier verification and evaluation plays a very important role, sourcing agent also will provide you when start the sourcing.

Once a supplier is chosen by the buyer, the sourcing agent should take the time to go to the factory in person to check the raw materials, assembly lines, semi-finished parts, warehouse, and do quality inspections, and provide the written report to the buyer with photos and detailed findings.

China Sourcing Agent

Elksourcing：Quality of a Good China Buying Agent

Apr 21, 2021 , by 露露

A good buying agent would be a great contributor to your business success in China. To safeguard the whole process of buying goods from China, the character of the buying agent matters. A good agent should have outstanding qualities. Some of a good buying agent’s quality include:

1. Trustworthy

The buying agent should be a trusted person or company. You may carry out your research to know if the party can be trusted. You can pull off from the deal if there are red flags.

2. Excellent Communication Skills

The whole process is guided by communication. If the buying agent has poor communication capabilities, it would be hard for you to get the goods on time. If they are poor listeners, they may compromise the whole process.

3. Market Knowledge

A good buying agent should have sufficient knowledge of Chinese market. This shows you that they can deliver quality services at reasonable prices. 

4. Resources

You have to inquire more about the buying agent to know how resourceful they can be. This would mean knowing their networks and their portfolio.

5. Experience

The buying agent should be experienced to ensure that you get the best services. Experience guarantees the agent knows the technicalities experienced in the buying process.

China Sourcing Agent

Elksourcing：What Can a China Sourcing Agent Do for You?

Apr 21, 2021 , by 露露

Sourcing from China is a lucrative business, but it can be risky and complex. Finding a reliable China supplier is difficult, the whole sourcing process seems daunting to new importers. You can’t fully trust the information shown online, and it is important to know the reality of the suppliers in China.

If you’re buying from China, you need trustworthy people on the ground in China. A good sourcing agent can help streamlining manufacturing processes. The followings are what a China sourcing agent can do for you.

1. Handle communication

Usually, if you are looking for a list of products you think promising, you may need to find 5 suppliers, also, you need to calculate unit cost and shipping cost. That means, you will have to spend lots of time at Alibaba or other sourcing websites and deal with endless emails with various suppliers. Every time you want to get price and delivery information for a product, you need to spend a few days to communicate with suppliers back and forth.

A China sourcing agent will help you solve this problem. You can easily send full production specifications and quality expectations, along with order QTY and target FOB price to the sourcing agent, then the sourcing agent will do the sourcing in their professional field, filter qualified suppliers, negotiate the best possible prices, and get back to you with a full package of options within a week.

2. Get better price and lower MOQ

Many clients always start off with 100-200 units because they want to test a product, see how it behaves, get a feel for the specification and overall market performance. What a China sourcing agent can do is to talk with the local suppliers, get quotations from various suppliers, compare one to another, negotiate with suppliers, and try to get the most suitable option. Because the China sourcing agent has long-term business relationship with suppliers, he can get the support from suppliers and start with a low MOQ.

3. Do quality inspection

Nowadays, bad product quality can kill a project instantly, as disappointed customers will leave bad reviews online, and tell more people around him. You cannot trust a China factory can manage quality 100% correct, especially in peak seasons.

If you have a China sourcing agent to help you handle whole process, it will save you lots of hassle. China sourcing agent can help you check monitor production line, check finished products one by one, and prevent bad products being packed into cartons.

Also, China sourcing agent can inspect bulk production before shipment, and do container loading check to ensure that the specifications are the same as the customer required. Especially for small sellers, it is not cost-effective to order a third-party inspection company for the production quality control.

4. Consolidate shipment

If you request samples or products from multiple suppliers, it is expensive to ship them separately. When you have a China sourcing agent, you can have all the samples sent to his office, or all the products sent to his warehouse. Usually, the China sourcing agent can keep the products in his warehouse free of charge for up to a week, you may combine all the products and shipped them in the same container to your country, to save your pennies.

As an experienced Sourcing agent has cooperated with logistics companies for a long time, they can get favorable rates and priority from logistics company. So, you can get your products shipped earlier and at a lower cost.

Moreover, your sourcing agent will prepare shipping documents and let you know what compliance certification you will need for customs clearance. You can stay away from hassle of shipping and focus on your marketing strategy.