3 Tips About How to Get Good Price from Suppliers
One question nearly every importer will ask at some point is, “Is this the best price I can get?”
Like most importers, you’ve probably questioned whether the price quoted by your supplier is “fair” and “reasonable”. You might have wondered if you could get a lower price from another supplier. And maybe you’ve had the foresight to balance other important factors against price, such as quality and supplier relationships.
1. Get quotes from multiple suppliers
Anyone who’s bothered to shop around at multiple stores knows it’s not always wise to accept the first price you see for an item, especially if that item is costly. The same logic applies when it comes to suppliers.
It’s essential to obtain quotes from different suppliers before purchasing an order. You’ll gain a better understanding of the overall market rate for certain items. If you accept the first quote a supplier offers, you might be disappointed later when you discover there were better options available.
2. Ask suppliers for the breakdown pricing
You can learn a lot about how a supplier has priced a product just by looking at its bill of materials, or BOM. The BOM is a list of raw materials, sub-components, and parts (and quantities of each) that are used in manufacturing an end product. This information can reveal why an item is priced a certain way, helping you understand the breakdown pricing.
3. Don’t negotiate pricing too low with suppliers
Some importers mistakenly think that getting the best price from suppliers means getting the lowest price possible. But the age-old proverb, “you get what you pay for” is as true here as anywhere else.
Experienced importers know that a lower price often comes with an equal or greater decrease in product quality. This is especially true for suppliers that work on very tight margins. Some suppliers will often try to recover margins lost in negotiations by using cheaper, sub-standard parts and materials, often without your approval. Others may simply refuse your order altogether.