Sourcing from China (Part 2): Negotiating terms, leverage over suppliers, and describing your needs.
In this episode...
In episode 65 we discussed the different supplier options open to buyers who’re sourcing from China. One of the options is to do the sourcing yourself. Many importers want to pursue this, so we're creating a mini-series of episodes that explores the sourcing process from China with tips and best practices from Sofeast's CEO Renaud Anjoran.
In part 1 of the series (episode 69), we looked at the early stage of sourcing where you find your potential suppliers, verify them, and cultivate backups once you’ve settled on a first choice.
Now, here in part 2, we’re going to explore the terms you need to negotiate with your chosen supplier, how to keep leverage over them, and how and why to clearly describe what you actually want from them at the pre-production stage.
00:00 - Introduction.
02:20 - Why is it important to be organized and avoid looking too inexperienced when negotiating terms with a new supplier?
05:27 - What terms do you need to negotiate?
- 05:50 - The price of the goods
- 07:02 - Lead time
- 09:58 - Incoterms
- 10:53 - IP protection
- 12:11 - Transparency over the supply chain & access to the manufacturing site
- 15:35 - The quality standards
- 17:53 - Payment terms
24:29 - How to keep leverage over suppliers?
28:09 - What payment tools do we have to keep leverage?
35:36 - Keeping leverage over your tooling.
38:20 - Paying by letter of credit.
40:49 - In what ways should you describe what you're expecting to receive from your supplier?
49:13 - Wrapping up.
- Negotiating With Chinese Suppliers: The Terms you Need to Discuss
- How To Keep Leverage Over Suppliers
- Pre-Production: Describing What You Want
- 9 Things Small Importers Can’t Negotiate With Chinese & SE Asian Suppliers [Podcast]
- Incoterms – what are they?
- How To Create A Valid Manufacturing Contract In China To Protect Your IP
- IP Protection in China when Developing Your New Product [Importer’s Guide]
- How to Pay Chinese Suppliers by T/T Payment (Bank Wire Transfer)
- How to get a Chinese supplier to accept a letter of credit
- How to move Plastic Injection Molds between China Factories [10 Tips]
- Documenting Your Company’s Quality Standard into the Details
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