When you first send a message to the supplier on Alibaba, give them an idea of what product you're looking to source and ask them for their WeChat username. In terms of the communication tools that I use, I strongly recommend bringing the conversation to WeChat as soon as possible. WeChat is essentially the Chinese text messaging app, and almost all Alibaba suppliers will have a WeChat account. The reason why we use WeChat is that you'll get a faster response from the supplier, as well as building a closer relationship with them.
Keep track of their WeChat username in your supplier list to help you organize your conversations with each of them. It is crucial to building a relationship with your suppliers to extend beyond the transactions that you two make. Using WeChat, I have conversations with my suppliers about their day, I ask them about their family, and I greet them politely. In Chinese culture, business is built entirely on a trusting relationship.
The outcome of building a solid relationship with your suppliers could mean that you can jump the queue for faster production times, and potentially get a better pricing for the products. One thing that you'll see commonly when chatting with suppliers is an MOQ. I want to briefly go over the idea of an MOQ, and explain why an MOQ is priced the way it is. MOQ stands for minimum order quantity, which is the minimum amount of units that you have to order before they will accept production.
Most suppliers that you meet on Alibaba will give you a high amount for an MOQ. Most of the time, this is fairly negotiable. To negotiate the number of MOQ, or even the price, we first have to understand why an MOQ is the way it is. Whenever a factory has to create a brand new product that isn't part of the current production line, they need to allocate a new assembly line just to make your product, and source a new batch of raw materials to create your product.
Now, to create a new product for your brand could mean that they'll need a new stamp to print your logo, or create a brand new aluminum mold with the specific shape of your product. These costs are known as the startup costs, meaning that these are typically one-time costs that you have to pay to get the factory to start making your product. The good news is that you do not need to pay this again after the product has been made.
So you can see that as a manufacturer, right off the bat, there are startup costs that they need to cover. And the reason why the MOQs are set the way they are is that that is the lowest number of units that you have to order to cover the startup costs. The way to get around this is by understanding the startup costs by talking to your supplier, and asking them what the costs are associated with making one product. After you figure out this cost, you can offer to pay them 20% to 30% higher than what they were courting you in exchange for a lower MOQ if this arrangement is more cost-efficient for you.
At the end of the day, the supplier may be willing to make a little or break even to get you your first order if it means that you will stick to them for more orders down the line, so don't be afraid to ask. Remember that all these suppliers that you're talking to are salespeople, and their agenda is to get as large of a purchase order from you. They also have the power to adjust the MOQ if they feel that the customer has a long-term potential to further their business.
