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I am currently in email negotiations with a foreign company to become a small reseller of their products in the US. They have quoted me a price that is based on a volume break as oppose to a flat wholesale price, but I want to negotiate a better price if possible. What I would like is some advice / feedback about wholesale structure when buying from outside of the US. I know this varies from country to country, but I would prefer to have a wholesale price close to 50% of retail, can this be considered standard? I feel like the price being quoted by thgis guy is treating more like a "hobbiest" as giving me little room to make a profit.
What do you think? Should I just ask for that or should I ask for a lower amount to anticipate a bit of hagling? I don't want to come off as arrogant or naive. I also don't want to blow my contact. Does anyone have some resources I can consult about negotiating wholesale pricing with foreign countries?
Another detail about this negotiation is that the contact is an in-between guy for the manufacturer and buyers and I am working with him because he speaks fluent English.
but I would prefer to have a wholesale price close to 50% of retail, can this be considered standard?
No, not really. The mark up completely depends on the type of product, how you are selling it etc. Some cheaper things we purchase (sunglasses, inexpensive jewelry, etc) is marked up 400~600% where as some other things is only marked up by 50~100%.
Quote:
Originally Posted by Perihelion2010
Another detail about this negotiation is that the contact is an in-between guy for the manufacturer and buyers and I am working with him because he speaks fluent English.
And likely marking up the items by a significant margin.
Health and beauty products - shampoos, conditioners, skin treatments etc...
Yeah...the margins on that should be pretty healthy.
But Health and Beauty products are often not the sort of things people want to purchase from someone unknown.
Anyhow, the best way to know whether you are getting ripped off is to look at the prices other companies are offering for similar products. Not all companies quoted prices are up for negotiation, that is especially true for larger businesses. If its a small order its probably not even worth their time to think about it!
Yup, I've already contacted two other manufacturers for comparison quotes so I can have some numbers to shoot to this guy and try to get him to come down. I need to find out at what volume I can get the price that I am aiming for. The language /cultural barrier just makes it an adventure. I've learned that contacting the American consulate for the country you are interested in doing business with is also helpful. They can put you in contact with trustworthy traders.
I've learned that contacting the American consulate for the country you are interested in doing business with is also helpful. They can put you in contact with trustworthy traders.
What do you mean by the American consulate? and how do you contact them?
Commercial and economic officers in U.S. embassies and consulates abroad provide assistance to U.S. exporters through in-depth briefings and by arranging introductions to appropriate firms, individuals, or foreign government officials. Because of the value and low cost of these services, it is recommended that the exporter contact the local Export Assistance Center before traveling to a foreign country. When planning a trip, business
Another detail about this negotiation is that the contact is an in-between guy for the manufacturer and buyers and I am working with him because he speaks fluent English.
Avoid middlemen. Factory reps may not speak perfect English but sufficient to provide quotes and paperwork.
Quote:
Originally Posted by Perihelion2010
They have quoted me a price that is based on a volume break as oppose to a flat wholesale price, but I want to negotiate a better price if possible. What I would like is some advice / feedback about wholesale structure when buying from outside of the US. I know this varies from country to country, but I would prefer to have a wholesale price close to 50% of retail, can this be considered standard? I feel like the price being quoted by thgis guy is treating more like a "hobbiest" as giving me little room to make a profit.
What do you think? Should I just ask for that or should I ask for a lower amount to anticipate a bit of hagling? I don't want to come off as arrogant or naive. I also don't want to blow my contact. Does anyone have some resources I can consult about negotiating wholesale pricing with foreign countries?
Source from various suppliers and compare their quotations.
To be worth your while, your markup has to be 7x or 8x to cover CIF and cost of doing business. Offhand, bath accessories @0.30cents retailed at $2. Compare the info you can glean from these sites on the same type of product: [for illustration only - this product is no longer hot]
Retailing at USD
url address: giftsonline.net/catalog/Miniature_Clocks.html
Retailing in Euro
url address: sunfactory.fr/en/gift-ideas/jewelery-clocks-watches/
Supplier in HK
url address: kamkei.com/product.asp
Great info, thank you very much for the examples as well.
Since I posted last the consulate has provided me with several english speaking contacts directly from the manufacturers in my target countries. The middle guy I referenced in the first post bailed after I told him I needed the price he was quoting me to be dropped by 50 - 60%.
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