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The right strategy for a successful negotiation in China

By Jesus David Cano Romano
February 29, 2016
shaking hands

Holding a negotiation in China mostly will differ from applying general negotiation guidelines taught in books. Since it’s every entrepreneur’s aim to minimize the suppliers’ price, it’s essential to find the right strategy before you go into a negotiation. Due to our long term experience negotiating with Chinese Suppliers in China 2 West, we can tell that especially in China it’s not possible to provide the “one way” solution. Some suppliers may name you a reasonable price where there is no negotiation possible, while others may name you an outrageous high price, expecting you to name a significantly lower price, to then meet in the middle.

Still, there are tips and tricks that always work to get the best out of a negotiation.

2 basic things to keep in mind

So before going through the structure there are two things that you should pay attention to when it comes to negotiations:

1)   Never assume that the person opposite doesn’t speak your language. Don’t say anything that they’re not supposed to hear, thinking they wouldn’t understand it anyway. The more money involved, the higher the possibility that the supplier is using tricks to find out your negotiation strategy and use this knowledge against you.
2)Find the person in charge and speak directly to them. You don’t want to spend your time talking to a person that isn’t making the decision at the end. Also during the negotiation, don’t talk to your translator but to the supplier.

4 steps how to structure your negotiation

The following will be  a rough structure that you can follow to increase the chance of being successful in your negotiation:

1) You should start of addressing the supplier by his name. It’s a simple and small gesture with a big effect. This may seem obvious but it’s definitely worth mentioning.
2) Appreciate his endeavor and don’t be parsimonious with compliments. Show the supplier that you’re interested in a business relationship and that you can imagine working with him.
3) Now this is where it you have to do your homework. Do research in advance to find as specific information as possible about the current price on the market. Explain that you have multiple offers and name a company that offers the product for a lower price. Don’t lie and most of all: be realistic. The supplier will notice if you name an amount that is out of proportion.
4) Stress again that you want to do business with the supplier and propose a compromise to meet in the middle.

Again, the most important aspect is: do research. This is the part of the negotiation that determines the outcome eventually.

And always keep in mind: you want to find a fair price so both of you are winning. In the end it’s mostly about long term relationships and that won’t work out if one is worse off than the other.