by Mike Bellamy in 'China Sourcing Information Center'
I was watching your videos and have some questions. I established my furniture company a short while ago, and when doing business with Chinese suppliers I tend to first ask about prices. So my question is: as I start with small quantities, how and what would you suggest to ask first? The price and quality are very important to me, so would you suggest that the quotation should come second? However, if they are too expensive, then I REALLY cannot use them. Many thanks and I truly enjoyed your videos!
Thanks for your questions. I am happy to hear you enjoyed the video about finding suppliers http://chinasourcinginfo.org/2011/11/17/finding-suppliers and congratulations on starting your furniture company.
Per your request, I would be happy to offer some comments based on your questions below.
As I understand it, it appears you are looking for ways to streamline the process and not waste time during RFQ with suppliers who will not be a good partner for you.
Since you are just getting started and have smaller orders initially, I think you would be wise to start your conversation with potential suppliers by letting them know first off that your orders are not large at this time. So often, the sales people just assume the buyers are buying big and quote accordingly. Then after further discussions, when they realize the order is small, they are no longer interested in working with you or they raise up the price a lot. That wastes a lot of time. So be open about your realistic volume and if the supplier is not interested do two things:
1. Hold on to this business card, because an honest supplier who passes on business (rather than taking your order and sub contracting it to somebody else) is good to know and hopefully you can use them in future when you get bigger.
2. Ask them if they know of smaller shops who would be interested in this order size. So often, the big suppliers have nice websites and English speaking staff, so they are easy for foreign buyers to find. But there may be a small company out there that is a good match for you, but you have to look harder to find them. Asking the larger supplier if they know any smaller suppliers is a good start.
BTW, you can also tailor your online research at www.GlobalSources.com to give you a list of potential suppliers based on # of employees. Don’t bother contacting a shop with 2000 employees if your orders are small. But that factory with 25 employees may be very happy to work with you and offer you a good price.
As you mentioned in your question, yes, I don’t advocate leading the RFQ talks with price only, because as soon as you do, you will subconsciously be attracted to the supplier that has what appears to be the best price, and it is very rare that the lowest price supplier also has the quality or lead time or other attributes your “dream supplier” would have. It is far more effective to narrow down the pool down to a handful of highly qualified suppliers, then start to talk price. Don’t be seduced by the siren’s song of low price.
One final note. Being a good sales person, I should mention that if you have trouble finding suppliers, you can hire a company like PassageMaker www.PSSchina.com to conduct the RFQ on your behalf.
Wishing you successful sourcing!
Answer written by Mike Bellamy, an Advisory Board Member & Featured Blogger at the not-for-profit China Sourcing Information Center. Mike is also the author of "The Essential Reference Guide to China Sourcing" and founder of PassageMaker Sourcing Solutions.