How to inquiry to Chinese factories ?

An importer asked me what he should do when Chinese factories ask for his “price targets”.

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I think it is a legitimate question from factories

Here is the sequence I advise importers to follow, when they source new suppliers:

  • Get in touch with at least 3 potential suppliers, and ask some questions (about their main market, their size…) to evaluate if they are good fit for your needs.
  • Request quotations (FOB, in USD) from them, to get a first pricing (without giving any target).
  • Be in touch with them briefly on the phone, if possible. Human contact will show them that you didn’t sent that RFQ to 100 suppliers, and they will be more inclined to give a fast response.
  • You will likely see several very similar quotes: that’s the ”market price”. Eliminate all the “outliners” that gave prices 20% higher or lower than the average. (If you are consciously looking to buy above the market price to get above-average quality, keep the highest quotes).
  • If you have a team on the ground and if all candidates are in the same area, this is the best time to visit their factories.

 

If this is not easy, continue discussing via email and phone, and pay for factroy audits once have narrowed your search down to 1 or 2 candiates.

  • Give more information about your product and your quality requirements to the most interesting candidates.  For example piston rod , sintered part  , shims or other compoennts for shock absorber ,you need to provide drawing or major size , quantity to lean . If it is difficult for you provide these information , you can also send us samples to learn , our engineers are able to  design according to your sample .chrome rod

Don’t hesitate to give them your target price if it is very different from what they offer you. Ask them to justify their price level precisely.

Don’t forget, in China price is very closely tied to quality. 别忘了,在中国,价格和质量息息相关。

If you negotiate a very low price, most suppliers will end up saying yes. Then they will wonder how to make your products.

即便你谈的价格很低,大多数供应商最终都会同意,然后他们会想着如何做你的货。

They will probably use the very cheapest materials and subcontract production in a small workshop. You will get what you pay for.

他们可能会使用最便宜的材料,可能会找小作坊分包生产。一分钱一分货。

One last piece of advice: if you pay 20% above market price, all you risk is wasting 20% of the money you disbursed for your project (and actually it is closer to 10-15% because the FOB price is only a portion of your total landed cost).

最后一条建议: 如果你支付高于市场价20%的价格,你的风险无非就是你为这项目多支付了20%资金 (实际上,没那么多,大概10-15%,因为FOB价格只是你到岸成本的一部分)。

If you pay 20% below market price, you risk getting something that can’t be sold at all (which means you risk losing all your investment).

但如果你以低于市场价20%的价格购买,你就有可能买到根本卖不出去的东西(这意味着你可能竹篮打水一场空)。

Do you agree? 你同意吗?

I am cathy from Max Auto Ltd ,if you have any inquiry to China , we can help you source any parts from China .

We specialize in manufacture and export all the components for shock absorber , for example piston rod , sintered part , shims , oil seal , stamping part and coilover .

shock-1


Post time: Apr-29-2022