Doing business in China is very different from Western business culture. In most Asian cultures, saving face is important. This means that it can be hard for foreigners to decode a rejection because we are direct in our communication.
In this article, you will learn how negotiating in China works.
Negotiating with your Chinese supplier
Sometimes, Western businessmen think that no matter what – it’s always okay to try and push the price even lower when dealing with Chinese manufacturers.
You should be careful though, when suggesting a lower price. Because of the unwillingness to say no, you will not get a clear indication that marks when to stop negotiating. This feeling of when enough is enough will come with experience and knowledge of your suppliers.
It is important to learn though. The consequences of pushing your Chinese manufacturer too hard can be serious.
An example of bad practice negotiation
I recently met a Danish supply chain manager who had been in China. He had met up with a local manufacturer and negotiated a fantastic deal with the company. Or so he believed.
After placing the first order he waited in vain for the goods to arrive – they never did.
He was convinced he had a great deal. But even Chinese manufacturers have a limit, and he had stepped over the line.
In Asia, a deal is a deal. This is something I really enjoy about Asia. But it only works if there is mutual respect. Business goes both ways and not only the buyer has the power. Both parties need to be satisfied.
It surely can be difficult to judge when it’s appropriate to stop negotiating, and I have no guidelines to offer. You need to know your partners and cultivate a long-term relationship with them. Only then you will learn how to bargain in China.
