Alibaba suppliers shenanigans (Amazon FBA Venture)
Updated: Feb 22, 2019
In a just a couple of months I just acquired skills that, had you asked me even 6 months ago I would have said I don’t need and I definitely will not require. The most important of them all is negotiating, or rather haggling.
After I had chosen a product to sell, I went on Alibaba and read up on how to use it properly. It turns out, it is always best to ask multiple suppliers. However, you shouldn’t contact them, one by one, rather Alibaba has a neat feature which is “Request for proposal” or RFP. You just enter the specifications of the product you are looking for, then you send it out and wait for the replies to come back.
The replies come in numbers. I mean it is a deluge of responses. It’s a mess !! Borderline spammy… I will spare whomever is reading the learning curve, just take on the ones that have been with the verified sticker for at least 8 years, choose 5 of them and stick to that. The prices will approximately be the same.
Negotiations while online is not something that is easy. I have been reading a book titled “Never Split the Difference: Negotiating as if Your Life Depended on It”, it teaches different techniques and from what I have read thus far, being in presence of the other party is much better because of the body language that can be assessed; which isn’t possible to do while online.
Nevertheless, I have come to streamline my own negotiation techniques to these few steps:
1. Get the offer from them
2. Refuse, claim that it is too expensive.
3. Counter with an outrageous offer. ( I have come to realize that with China, prices are nothing like we are used to, you may be surprised with what you get away with)
4. They will of course tell you that the situation has changed, wages have risen, the economy has slowed, and all the good excuses they can come up with, and that ultimately the prices have risen in consequence. Acknowledge and speak of the competition; specifically on how they are way cheaper.
5. After they claim that theirs is a product of quality, I have told them that quality was a given and not even part of the negotiations.
6. Once you have come to a price which you feel they won’t budge, tell them you will think about it and seek other suppliers for comparison. Let them marinate 2 days. They will by themselves lower prices.
When I was ordering my first product, I stopped at step 6, took it and thought I had made a deal. But I have now realized that there is a variable that I can use to further lower the price. When I start ordering I will always ask prices for a quantity that is lower than the ones that I require. Once I feel we have reached a level that seems to be the lowest they want to go, I will then tell them about the higher quantity, then repeat the 6th step. It turns out that it works.
My best results thus far was a price lowered 50% from the first number quoted. I am interested in knowing if it works for others as well. Try and let me know. I would also like to know what are the strategies that have worked for you.