Understanding Chinese Supplier Pricing
Quotes typically break down as: raw material cost + processing + overhead + profit margin (10-20%). Knowing this gives you leverage.
Effective Tactics
- Volume commitment - Lock in 6-12 months volume for lower unit price
- Simplify specs - Loosen unnecessary tolerances to reduce cost 15-30%
- Consolidate orders - Combine parts to increase total order value
- Flexible payment - Better terms reduce supplier working capital cost
What Not to Do
- Dont reveal your max budget
- Dont negotiate only on price
- Dont compare different quality tiers
- Dont push margins below 10%