How negotiable are prices on Alibaba? And can you get a better deal by getting on a plane and negotiating in person? The answer is no…but…
I recently received an email from Tony of AbbyPoint:
I have quick question that I hope you can guide me with your sourcing expertise. I've been sourcing on Alibaba and Hktdc for some time now and I've familiar with the platform. My question is, how are the prices on those platforms compared to when you go negotiate prices in person in China? (Assuming you're asking for the same quantity). From your experience will the prices be considerably cheaper if I go in person?
Can you get cheaper prices by flying to China and negotiating in person?
Probably not. If you’ve solicited a number of quotes on similar items from different suppliers on alibaba, you are not likely to see significant cost savings from coming to China to negotiate the price in person.
If you are importing a commodity that has a number of suppliers on alibaba, and you’ve solicited quotes from them, you should have a good idea already of where pricing should be falling out. By going to China and negotiating in person, you may realize some small price concessions in an in-person negotiation, but they are not likely to be large.
But a trip to China is still a good idea!
Hop on a plane and visit some suppliers. Worst case scenario = you lose a kidney. Just kidding!
In China, you can:
- Quickly visit multiple suppliers for serious negotiations (and supercharge this process by going during the Canton Fair)
- Look for the best price, not the lowest price (best price = a low price from a quality supplier)
- Better assess the capabilities of the factories you are dealing with
- Begin building long-term relationships with your factory partners
A China trip may be well-worth the cost, but it probably won’t result in large cost savings on your products, if you’ve done your homework on alibaba.
Did I miss anything?
Let me know in the comments. Whether you are a newbie with unanswered questions, or a seasoned China hand, I love all input and feedback.