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India Sourcing Network

How to Negotiate Like a Boss With Suppliers from India

How to Negotiate Like a Boss With Your Indian Suppliers

When it comes to sourcing from India, negotiating is a vital part of the process, and it’s important to know how to do it effectively.

In this article, we’ll explore the top negotiation strategies with Indian suppliers, to help you navigate the process with like a boss.

Treat your supplier like a partner

In India, negotiating is part of the culture and is expected. However, it is important to remember that your supplier is not your adversary, but rather a partner in your business. Use “we” instead of “I” language, and focus on finding a balance in the partnership that will be a win-win for both parties. Show them that you are a serious buyer with a long-term vision and explain how you can help them grow as you grow.

For example, if you’re sourcing textiles from India, you could say something like, “we’re excited to work with you on this project, and we believe that if we can work together to create a high-quality product, it will benefit both of us in the long run.” This approach shows that you’re interested in a mutually beneficial partnership, rather than just a one-off transaction.

Negotiate with confidence and professionalism

Confidence is key when negotiating in India. Avoid showing weakness, such as saying your resources are limited, as it can indicate that you are not a serious buyer. However, it is also important not to overpromise, as this can come back to haunt you. Negotiate with the boss or factory owner, as India is a hierarchical culture, and sales executives or merchandisers may not have the authority to make decisions.

Relationships matter

In India, relationships are highly valued, and once you start placing repeat orders with suppliers, you will get priority treatment in terms of payment terms, better prices, free shipping for samples, and more. Building a relationship with your supplier can help you secure better deals in the long run.

Know your target price

It is important to know your target price when negotiating, so you’re not shooting in the dark. Look at all landed costs, prices of your competitors, and determine what your sourcing price should be.

Get quotes from multiple suppliers, and don’t simply go for the lowest price. Ensure that the quotes you get from different suppliers are for the same product with the same specs.

For example, let’s say you’re a small business owner looking to source handmade pottery from India. After doing some research, you determine that your target price for a set of four mugs is $20. You can share this information with your supplier and ask them if they can offer you a price within that range. If they can’t meet your target price, you can explore options like adjusting the product specifications or increasing the order quantity to lower costs.

Leverage your bargaining power

If your supplier is unable to meet your target price, find out what factors are affecting the price and MOQ and try to make changes in your product or order quantity. For example, you could adjust materials, functions, customisation, or size.

Keep in mind that MOQ is often due to material suppliers and not the factory’s requirement. Find out if you can buy materials in bulk and store them at your supplier’s factory, or maybe produce multiple SKUs using the same material or fabric.

Negotiate more than just price

Everything from packaging, MOQs (test order), delivery lead time, payment terms, samples can be negotiated, and will affect your overall sourcing cost. Ask for a quote of their MOQ/container and ask how much more you can pay for a small order. Negotiate more when you scale, as you have more leverage.

Face-to-face negotiation is most effective

Negotiate over video as you can see their face expression, and it is easier to convince people when talking face-to-face. If possible, travel to the factory for in-person negotiation.

Finally, if the price is not working out for you, be ready to walk away from the supplier. If the price isn’t working out from multiple suppliers, you may have to walk away from the product or look in another country.

Get quotes from multiple suppliers, and don’t simply go for the lowest price.

Here are some key points to remember when you are unable to achieve your target price during negotiations with a supplier:

1. Find out what factors are affecting prices and MOQ, and consider making changes to your product or order quantity.

2. Consider adjusting materials, functions, customization, or size, or lowering quality without affecting product functionality.

3. Keep in mind that MOQ may be due to material suppliers and not the factory’s requirement. See if you can buy materials in bulk or produce multiple SKUs using the same material/fabric.

4. Consider increasing order volumes, placing long-term orders, or helping the supplier venture into new markets to gain leverage.

5. Negotiate beyond price, including packaging, MOQs, delivery lead time, payment terms, and samples.

6. Ask for a quote for the MOQ/container and see how much more you can pay for a small order.

7. Focus on quality more than price, as pushing the price too much may result in lower quality.

8. Negotiate more when you scale, as you have more leverage.

9. Consider negotiating over video, and travel to the factory for face-to-face negotiation if possible.

10. Be ready to walk away from the supplier if the price is not working out, and if necessary, consider looking for a supplier in another country or walking away from the product altogether.

 In conclusion, negotiating with suppliers in India can be challenging but rewarding. By treating your supplier as a partner, negotiating with confidence, and leveraging your bargaining power, you can secure better deals and build long-lasting relationships with your suppliers. Remember to negotiate more than just price, and to focus on quality over price.

 

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