9-Step Strategy to Negotiate with Alibaba Suppliers

Eric Pong
negotiate alibaba suppliers - Floship

One of the simplest ways to increase profits is by cutting costs. Negotiating with your Alibaba suppliers can increase your profitability and boost your efficiency.
However, most suppliers will be against offering discounts unless the discount is given in exchange for considerable value in other areas. Consider these nine steps when communicating and negotiating with Alibaba suppliers.  

Step 1: Seek On-Site Verification

In negotiator training, negotiators learn to first identify who their counterparties are. On the Alibaba platform, start by ensuring that your chosen supplier is trustworthy. A verification badge on a supplier’s online profile provides at least one basic level of assurance.

Step 2: Research Costs and Competitors

Prepare for negotiations by identifying the costs your Alibaba suppliers incur and what their competitors are charging.
Use the “Latest Price” button to know what the supplier is charging. Measure this against what your competitors are paying for the same products. When you’re familiar with industry practices, you are set in a better position to build a sensible offer.

Step 3. Communicate Clearly

To initiate communication, click on the “Contact Supplier” button. Another option to begin communication is using the “Chat Now” button; remember, this option may not be feasible due to different time zones and work schedules.
Whichever option you choose, make your communication simple and clear. You may be chatting with someone from a different country who speaks a different primary language. Clarity can save you time and money.

Step 4: Sell on Volume

Alibaba suppliers are more likely to consider giving you discounts if you’re a high volume customer. Just like any other business, the supplier wants to sell as much product as possible.
If you are the kind of customer who will be purchasing frequently and in large quantities, you will get a better deal. One negotiation training tactic is to provide sales projections. You can also share records of your past purchases to show you should be taken seriously.

Step 5: Negotiate Outside of Price

When your supplier won’t negotiate on price, you can negotiate on other things that affect your cash flow. For instance, you can negotiate on the amount of deposit or how long it should take to fully pay for a purchased order.
Other aspects you can negotiate on without affecting price include faster shipping, responsive e-commerce fulfillment, warranty improvements, and better packaging.

Step 6: Sell on Value

Quality Alibaba suppliers generally stick to fixed prices and are not easy to persuade to budge on price. A tactic you can adopt is to sell on the value you bring.
For instance, if you’re opening up new markets for suppliers, the expanded reach would increase their profits. Connecting Alibaba suppliers with more efficient or cheaper local address distributors would lower their costs. A quality negotiating course teaches how such value transforms your customer-supplier relationship into a strategic partnership.

Step 7: Make Bids Competitive

Talk to multiple Alibaba suppliers to encourage competitive pricing. When you enter into negotiations, let the supplier know you have competing quotes that are equally attractive. By negotiation workshop standards, if you promote competitive bidding, the only remaining distinguishing factor will be the price. The ideal response is you’ll either get an attractive discount or an offer the has better, non-price-based value.

Step 8: Offer Attractive Deposits

One concern shared by Alibaba suppliers is collecting on accounts receivable. One way to secure larger discounts is by offering attractively high deposits. An in-house negotiation class can help you to calculate the best deposit point your firm can offer. If your supplier receives deposits of 60-70 percent upfront, they’ll be far more amenable to consider discount requests.

Step 9: Be An Ideal Client

When you’re the perfect customer, suppliers will hate to lose you. Do you pay on time? Do you give all your business to one supplier? Do you maintain open communication lines? Or, do you request endless samples without making a purchase?
If you’re a problematic customer, an Alibaba supplier may not want to negotiate with you on prices. As an ideal customer, suppliers may offer discounts and other incentives to retain your business.

Need a Fulfillment Partner?

Many who use Alibaba for procurement, may be drop shipping. Using a Fulfillment Partner however means, better margins, better rates with your manufacturer as you would buy in bulk. We would store your products, pick & pack and ship them for you. Are you ready to make the step from drop shipping to order fulfillment?
Floship is one of Asia’s leading eCommerce and crowdfunding order fulfillment providers. We are located in Hong Kong, meaning, a lot of benefits in both tax rates as well as lower tariffs compared to directly shipping from China to the United States. Why not get a FREE consultation and pick our brains? Click here.

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