One Quick Negotiating Tactic to Get a Better Price from Your Supplier
Bargaining power – not always easy to come by as an Amazon seller. If you’re using Amazon FBA, you’re at the mercy of the fees set by the largest e-commerce platform in the world. If you’re using your own fulfillment center, you may have some room to discuss price. However, your options will most likely be limited to the kinds of 3PL warehouses that can both handle shipments on your budget and are willing to play ball.
There is, however, one place Amazon sellers can fight for lower-cost services to dramatically improve their bottom line: your supplier.
There’s a good chance you’re already familiar with alibaba.com. It’s the most popular place to find and source products to sell on Amazon, and for good reason. With the ability to sort by manufacturing price, minimum order quantity, country of origin, and more, Alibaba has cemented itself as the premier marketplace for sellers to find suppliers.
Did you know?
You can search alibaba.com within the Helium 10 free Amazon chrome extension? Just run Xray on any Amazon search results page (or single product page), and click “Find Suppliers on Alibaba” in the upper right corner!
A Quick Supplier Bargaining Strategy
Let’s say you find your ideal product on Alibaba from a manufacturer that appears to be trustworthy.
It cost $7.48 per unit to make (for orders of 500-999), according to their alibaba.com listing.
We’re going to conduct a quick price match comparison using a separate, Chinese marketplace website.
1. Using Google Translate, translate your product name into Chinese (simplified).
2. Copy that Chinese translated phrase, head over to 1688.com, and paste it as a search. You’ll quickly notice… the entire site is in Chinese! Don’t fret, this is a surface-level visit that we can still glean some quick info from.
3. On the search results page, visually look for the product that best matches the one you found on alibaba.com. It doesn’t need to be a perfect match, but look for similar materials, size, and practical use.
Once you find one, click on it.
This will take you to the product listing with a cost of production, among other information.
4. Copy the price (which is currently displayed in Chinese Yuan Renminbi). In this case, ¥42.00 (for orders of 500-2999).
5. Go to xe.com, a fast international currency converter, and plug in:
¥42.00, converted from CNY (Chinese Yuan Renminbi) to USD (US Dollar)
And the results are…
$7.48 to $6.40 ($1.08 difference) may not seem like a lot, but when we’re talking about order quantities of anywhere from 500 to shipments in the thousands, these numbers become much more substantial for your profit margin.
Now you can go back to the original supplier and say, “Hey, you guys are offering me ‘wholesale’ pricing at $7.48, but I just found virtually the same product for over a dollar per unit cheaper. What can you do for me?”
Keep Looking For New Ways to Save
For those of you paying attention, you may recognize this tact from the Helium 10 Elite Training with Kevin King! If you’re interested in taking your Amazon business to new heights with the networking mecca for e-commerce sellers, learn more about Helium 10 Elite here.
Keep in mind, using 1688.com to cross-check prices this way does not guarantee you get the lowest price you find, but it is still a good tool to have in your back pocket when negotiating prices with your supplier.
Always come to the table prepared!
- Introducing… The Serious Sellers Club! - July 26, 2021
- Selling on Amazon vs. eBay: 2021 E-Commerce Comparison - July 24, 2021
- ELEVATE Episode 2: Why the “E” in E-Commerce May Stand for Empowerment - July 22, 2021