Stage 2 – Sourcing & Negotiation
During this stage, China Procurement researches potential suppliers in China. This is typically done in Chinese, using websites, business registers and Chinese Yellow Pages. Once a potential supplier has been identified, the first contact is normally made by phone. Subsequent conversations take place using online messaging facilities such as MSN or Skype in addition to phone calls.
Sourcing
Normally the size of the order or type of product will determine whether we can work directly with a manufacturer or through a distributor.
Negotiating
Once it has been established that the supplier can supply the required product to the exact specifications, the next step is to agree on pricing and delivery schedule. Both of these will be very much dependent on the order quantity.
One of the most important processes prior to negotiating is building up a good rapport with the supplier, hence getting to know suppliers and building good relationships is critical to our success. Also it is very important that the final price is fair to both the customer and supplier. Many very large customers force the manufacturer’s prices so low that they barely cover costs, so the manufacturers end up using cheaper inferior components.
Before making any agreements with the supplier, we carry out a due diligence to ensure firstly that they are a reputable company, and secondly that they are capable of meeting the terms of the purchase order
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