How to win the price war among foreign trade peers?
A foreign trade friend told me that the customer said our price was too high, and another factory offered him a price lower than us $20, lower than our cost price. I believe most foreign trade people will encounter such problems. Price war has become a battlefield in foreign trade, so how to fight this battle?
My friend sent me their chat content and found that after the customer asked the price, the friend and the customer began to bargain.
The customer said “I’ve got $60 from other supplier”
A friend replied, “that’s impossible.”
The customer immediately replied, “you feel free to support us.” every feeling strong ones will make good and successful business cooperation. please let me know your opinion”
In the price war with their peers, some foreign trade people will think that the price is simply impossible and will directly conflict with their customers. They even tell their customers that there must be a problem with the quality of their peers and there must be some moisture. In order to prove that they are right, they argue with their customers and instead close the relationship between their customers and peers. How can they not be bothered by such problems?
Don’t be frightened by foreigners’ bargaining habits.
No matter how cheap the price is, foreign buyers will come back with “too expensive”. This is already a buyer’s habit. Foreign traders should not be frightened by the customer’s habit. On the contrary, those who say that the price is OK are not real buyers.
Don’t complain about foreigners cutting prices Some foreign trade people will complain that the foreigner bargains too much when they hear the foreigner bargains. Especially in the face of some Indians, the price is always so low that it is lower than the cost price. In fact, the foreigner sometimes does not know the price bottom line and the cost bottom line, and those who do not know do not blame it. Some foreigners bargain foolishly, not because of his mistake, but because of his psychological uncertainty.
Understanding the Price Range and Increasing Price Confidence To do foreign trade, we should first lay a good foundation and understand the price of our products in the market and compare it with that of our peers. We should also have some confidence in our own price. When the foreigner did not reply to the initial inquiry, many of us were impatient and fell into doubt to reduce the price. We need to be particularly clear that in foreign trade, no matter how big the customer is, it is impossible to place orders every day. There is a purchasing cycle. Most customers place orders several times a year. The first time they ask us for an inquiry, they mostly collect information. At that time, the customer did not have any orders at all. No matter what price you gave him, he would think it was high and the price was cut at random.
We can ask him “when are you going to place the order?” “Before you buy our products, what other requirements are there for the products?” Don’t give yourself too much psychological expectation, often in foreign trade, the greater the hope, the greater the disappointment. Looking at customers who are very likely to become single, we will add inexplicable troubles to ourselves.
Know the selling points of the products and don’t panic when you meet with price cuts.
The price quoted by the customer may only be due to habitual bargaining, or judging from his experience and competitors in the market, he thinks the price is too high. Customers compare our prices with those of their peers, and we need to prove that the gap between our prices and competitors is reasonable.
When quoting, make a quotation as detailed as possible to the customer, instead of a simple price.
The quotation should also include information such as payment method, validity period, packaging method, delivery date, certification, etc. to help customers consider all possible situations before and after the order.
In addition, I attach a refined picture, suggesting that every company should use SLR equipment to take pictures of products, and then ask artists to refine the pictures.
Foreign trade is actually similar to online shopping in many aspects. Due to the high cost of international express charges, customers do not agree to pay express charges, and our suppliers are not willing to pay express charges, so many customers directly look at pictures online to place orders. Every one of us has the experience of online shopping. Several shops have the same products, which may be the same, but we can see that the picture is worse than that of another one. Especially by comparing the detailed pictures, we will conclude that the one with the good picture is of good quality. Especially when the one with the certification is placed there, we will completely ignore the difference of a few dollars to buy the one with the good picture and the certification.
Peer prices are indeed very low. What about vicious competition?
The price is only lower, there is no lowest, especially sometimes there will be vicious competition, competitors shoddy, jerry-built. So what should we do at this time?
I have also encountered this kind of problem many times. We are an old customer who has been cooperating for more than 2 years. The cooperation has been good. The customer also trusts us very much. Products bought from other companies often come to our LCL for shipment. We help the customer coordinate. Later, I met a competitor whose price was very low and close to the cost price. The customer used this price to push down our price, indicating that he had cooperated well with us. He hoped to place an order with us, but the price should follow that price. Let’s calculate, this price has no profit margin.
I told the customer that at that price, I would not only lose money but also make no profit. Our raw material cost, plus the processing cost, plus the company’s operating expenses have already exceeded that price. We have been cooperating for so long, and we are also friends. If the price can be done, we will certainly give you support and give you that price under the condition that we do not lose money. I hope you will consider it carefully. Of course, other suppliers are cheaper. You can try it. We respect your choice and welcome comparison.
In the following time, when there are new prices and new products, I will recommend them to these old customers in time, and even send samples to old customers free of charge.
I will also record the inquiry information of the customer every time. When the customer asks about the same product, I will reply to him. You have already asked about the price at that time, the current price and the reason for the price change.
After a few months, the customer probably received the goods from that supplier, obviously the quality was too poor, and indeed the quality was not good. And told us that there is another new order this time, please quote us the best price.
There is a lot of vicious competition, especially some unscrupulous suppliers who take inferior products and pit their customers first. We can’t avoid this, for professional customers, of course, can know the issue, but customers who have not stepped on the pit, especially those who like low prices, are bound to be unable to listen to advice, and a detour is indispensable. We have to do our job quietly and wait for customers to change their mind.
Original Artical，Author：China Trade Agent，if repost，please give references ：https://offers-bg.com/how-to-win-the-price-war/