Negotiating price and terms
We negotiate on the ground, in the local language and codes, from a specification that has been fixed first. Price is only one variable: payment schedule, Incoterm, quality thresholds and penalties are discussed together, and recorded in writing before the order.
- 30/70
- deposit then balance before shipment — standard market practice
- In writing
- price, payment, Incoterm and quality thresholds settled before the order
- 0
- discounts obtained at the cost of a substituted material
- 01
Fix the specification
Material, thicknesses, finish, packaging and markings settled in writing. Without that basis, any discount obtained will be paid for elsewhere, on a component nobody mentioned.
- 02
Negotiate on the ground
In Chinese, within local practice, from the position of a partner based nearby who brings regular orders — not that of an isolated buyer reachable by email.
- 03
Record in writing
Price, quantities, payment schedule, Incoterm, quality acceptance thresholds and lead times: recorded before the order. What is not written beforehand cannot be obtained afterwards.
The trap of a discount with nothing given in return
Asking for a lower price without changing the specification is the most common request — and the most expensive. The factory rarely agrees to lose its margin: it compensates by substituting a cheaper component, material or surface treatment, without mentioning it.
The result arrives three months later, in a container. Useful negotiation therefore bears on the technical sheet: you fix the specification, then discuss price at constant specification. A quotation well below the others almost always signals a difference in materials, never better productivity.
Price is not the only variable
A unit price on its own means nothing until you know what it covers. Four levers are negotiated together, and a gain on one often offsets rigidity on another:
- Price, at fixed specification
- The payment schedule: local practice remains a 30% deposit then a 70% balance before shipment, against a copy of the bill of lading
- The Incoterm: comparing an EXW price with an FOB price means nothing until both are brought to the same basis
- Quality thresholds: acceptance levels agreed before inspection, and what happens if they are not met
What a presence on the ground changes
A negotiation by email, in a language native to neither party, produces misunderstandings that neither side catches. On site, in the language, what goes unsaid can be read and commitments are made in front of witnesses.
There is also the balance of power: a factory does not treat a one-off buyer ten thousand kilometres away the same way it treats a local partner bringing it several orders a year.
Securing payment
We help you never to settle an order before the inspection report, and to check that the beneficiary’s bank account matches the entity named on the invoice — fraudulent changes of bank details are the most frequent risk in this market.
Terms remain defined case by case with the supplier. We provide no guaranteed financial or legal advice.
- Price at constant specification
- Payment schedule
- Incoterm and costs covered
- Agreed quality thresholds
- Tooling and sample costs
- Terms recorded in writing
Negotiating alone or through someone on the ground
| Direct, remotely | Through an agent on site | |
|---|---|---|
| Language | Approximate English on both sides | Chinese, with no intermediary |
| Position | One-off buyer | Partner with regular orders |
| Specification | Often verbal or implied | Fixed in writing before price |
| Commitments | In an email thread | Recorded and enforceable |
Frequently asked questions
- How far can a price be pushed down in China?
- The question is the wrong way round: at constant specification the margin for negotiation is real but limited, and a supplier dropping very low very fast is announcing a substitution to come. Lasting gains come from volume, payment terms, packaging or the production season rather than from a unit price wrung out of the factory.
- Should we tell the supplier our budget?
- Rarely at the first exchange: the quotation will align with it, whatever materials it takes to get there. Better to have a precise specification priced, compare, then discuss. Budget becomes useful once you know what each euro buys.
- Will you negotiate with a supplier we found ourselves?
- Yes. We can step in on negotiation and the written framing of terms alone, without touching the rest of your organisation. Each service can be commissioned on its own.
An offer to negotiate?
Send us the quotation you received and your specification. We will tell you what is genuinely negotiable, and what the price is hiding.
Each service can be commissioned on its own, or alongside the others.