How to Bargain in China's Wholesale Markets
Should You Haggle or Bargain in China?
Bargaining or haggling is prevalent in China and other Asian nations. A bit of bargaining is expected and those who do not are considered foolish. I do agree that most westerners find the this a bit unsettling as they have never experienced it back in their own country. Those looking forward to buy and import from China should do well by learning how to haggle in China.
So those looking for lower prices should brush up their negotiation skills to use it while buying in the Chinese wholesale markets.
Can you bargain?
Can you bargain?
Do Your Research Before Coming to the Wholesale Market.
Before coming to wholesale market it is better to do some research about product features and price. Websites like ,madeinchina.com, aliexpress.com and taobao.com would give a realistic idea about the wholesale price range for your products. For example, if you are buying iPhone covers find out prices of popular covers, new designs and approximate retail and wholesale price.
Always do prior research before coming to the wholesaler in the market as would give you crazy prices once they get a hint that you are a novice, first time buyer.
Get Pictures on Your Phone or Tablet
A picture is worth a thousand words. Avoid trying to describe what you need either directly or through a translator to a seller. You do not want to be victim of Chinese whisper. Usually a seller will appreciate that you have a clear understanding of your needs and would try to offer an alternate if the same is not available.
Ask Price for Multiple of Products
Do not just ask price for the product you need. Ask for multiple of related products to get an idea and try to remember those prices. Most of the negotiators have a good memory as it comes handy to compare prices obtained from different sellers. If you cannot remember, use voice recorder to record the entire conversation on your phone
If you focus on one product only, the wholesaler may think that you are interested in it and would jack up initial price. So ask prices for multiple products to keep them guessing what do you really want.
Compare Prices From Different Sellers
The first hour or more should be spent taking prices from various sellers. Take business cards from the seller whose product you find interesting and scribble prices on the back of their card. The Chinese wholesale markets tend to be big with signs mostly in Chinese so it helps to get hold of business card from the seller so that you can trace back your steps. I generally take a picture of outside of the shop for my reference.
Learn Some Common Chinese Words
Numbers from 1 to 10, colours, packing, shipment, how much, quality, order, quantity, delivery and deposit are few common words that would go a long way to establish you as a knowledgeable buyer and earn respect in the eyes of the seller. Once they know that you have required knowledge of the product and speak few words of local language they tend to see you as serious buyer and would give you a competitive price. In the end, everyone likes a serious buyer who can buy wholesale at a reasonable price.
Taking Haggle to the Next Level
Once you have identified the products that you want and have researched the wholesale price of the same, be prepared to start buying process with at least two wholesalers. In my experience, sometimes bargaining with a wholesaler does not go well because of many external reasons, so be prepared to have an alternate supplier handy.
Before you start price negotiation, confirm all quality features of the product that you need. Why it is important? Many sellers would try to tell you at the end of price negotiation that some features or quality aspects are not included and price will be extra. This is a common defensive negotiation technique used by experienced wholesalers. Now that they have your buying price and they are starting negotiation once again. So avoid such situation and discuss quality features before you discuss price. Let the seller know that price negotiation will follow once both parties agree on quality and product features. The best way is to lay down on the table all the products that you plan to buy.
Do not let your translator lead price negotiation. Chinese wholesaler would like your translator to actively participate in negotiations as they feel more comfortable to explain their side in the local language. Do not let that happen. Remember, it is you, not your translator who needs to decide. Let her give a chance to explain this to wholesaler and ask her to speak when needed. In China, you do not need a translator to agree on a price with the wholesaler as most of them have enough experience in dealing with foreigners with a calculator and hand signs.
Step 1: Start with a Low Ball Quote
It is common that a Chinese wholesaler would give an initial price which would leave enough room price negotiation. Counter that with your own low ball figure that should be lower than what you expect to pay. Reveal your quantity to be at least half or 1/3 of what you actually need. (more about it in the next step) conceding very little ground. The wholesaler will ask you to make a better offer. Decline and ask the seller to make an offer. He will also lower his initial offer by 5% to 10%,which should start the ball rolling.
Once you start to haggle you will quickly reach an agreeable price. You may use following time tested methods to achieve it.
- Finding fault with their products
- Showing them prices from the competitors.
- Strengthen your position with price of repeat order, prompt payment etc.
Step 2: Ask for Quantity Discount
The first price that you agreed in the step 1 was for a quantity much lower than you really want to buy. Now it's time to ask show the wholesaler that you are really not making any money and prepared to buy more quantity if prices are lower. Most wholesaler would come up with new lower price. Go through price haggle once again.
Step 3: If You Are Buying Multiple Product / Model
Try to get lower price for another product by making it conditional. It goes like this - I sell product A and product B as a bundle to my customer. Although your price of product A is acceptable, but there is a small quantity of product B that I want to buy which needs to be cheaper. Please ensure that product B is much smaller quantity than product A. Be prepared to walk away citing reason that you are looking to buy both from the same wholesaler.
Once prices are agreed, break the negotiation and ask the seller to prepare an estimate. It local lingo, it is called common Fa Piao which is nothing but an agreement to sell. It is not a tax invoice and can be canceled without much problem. Take a copy of the same and promise wholesaler that you would get back to them. If he does not agree to give a copy, take a picture of it on your phone
It is now time to repeat step 1 to 3 with your second choice wholesaler to compare prices and other aspects. Take your time, you can always go back to any of them. Once you have finalized everything, go to the wholesaler with whom you would like to place the order. Please do negotiate the following at the time of placing order.
Negotiate Extras While Placing the Final Order
Get extra parts or products for free
It depends on the products that you are buying. Most of the wholesaler would agree to give extra 1% parts or additional product because it is impossible to check quality. Getting critical parts goes a long way in servicing your own customer’s after sales need.
For example: Once my customer purchased 1000 pieces of garment steamer from a factory. After finishing price negotiation, we popped the question of after sales service and seller agreed to give 2% of parts free provided he has no further obligation to service or replace defective products. It is practically not possible to ship defective steamers back to China due to high freight cost so customer also agreed to it.
Negotiate free storage and delivery.
Most of the wholesale would store goods on your behalf in their warehouse free of charge, but you should get them to agree at the time of placing order. They are also obliged to send goods to your freight forwarder’s warehouse without any extra charge, provided it is in the same city where the wholesaler is located.
Final Words of Wisdom
In China, negotiation is a normal part of everyday business. It could be lots of fun and financially rewarding provided you take it in a positive way. It is advisable to try not to put the wholesaler in a tight spot as Chinese dread loss of face. Always keep cool and dominate the entire negotiation process without being abusive or irritating the wholesalers.
Do not feel shy about haggling. A wholesaler will not sell you if he does not make decent profit from the deal. They are also not as poor as they look as many of them would drive cars much better than yours. It is just they are acting their part well and expect you to do the same.
Wholesale Markets in Jiangsu Province
In Jiang Su Province
- China Oriental Silk Market, Wusi
- Changshu Merchandise Mall
- Jiangyin Food City
- Jiangyin Textile Market
- Taicang Light Textile Market
Major Wholesale Markets in China
In Zhe Jiang Province
- Yiwu China Commodity City
- China Light & Textile Industrial City
- Xiaoshan Commercial City
- Huangyan Luqiao Commodity Market
- Cixi Zhouxiang Food Wholesale Market, Ningbo
- Datang Textile Market , Zhuji
- Huanbei Commodity Market, Hangzhou
- Hangzhou Silk Market
- Huzhou Silk City,
- Evergreen Clothing Market, Hangzhou
- Zhili Light & Textile & Embroidery Industry
- Honghe Sweater Market, Jiaxing
- Hangzhou Light Textile Market
- Yongjia Bridge Button Market, Wenzhou
- Tongxiang Puyuan Wool Market, Jiaxing,
- Jiashan Mall
This article is accurate and true to the best of the author’s knowledge. Content is for informational or entertainment purposes only and does not substitute for personal counsel or professional advice in business, financial, legal, or technical matters.
© 2014 Kamal Mohta