It’s such a broad subject. So, in this paper, we will use a specific example to illustrate how to negotiate the tariff price with the supplier. In fact, the next example I’m going to give you is a serious problem that was impacting so many Amazon FBA sellers. And that problem is the new tariff because of the trade war between the United States and China.
By the way, as a reminder, if you are new to Amazon FBA business and you’re still researching the product. It’s suggested that to take a look at the harmonized code, which determines the duty that you’re going to pay for this specific product. Make sure you study and see how much duty you are going to pay. Some categories are being impacted at 10%, Some categories are 25%. It depends on the product under the product category to be prepared. A lot of people don’t have that much margin to accommodate that much of duty.
Now let’s talk about the negotiation.
Is duty negotiable?
Not with the United States government, I can tell you that. But everything is negotiable with the Chinese suppliers. If you speak to the best China product sourcing agent, he will tell you the same story. In fact he will urge you to negotiate or let him or her negotiate on your behalf.
So the case is since September of 2019, all the products that I’m buying from China are being affected used to be duty-free now is 10%. The last container I cleared is over a hundred thousand dollars on the commercial value.
So you apply 10% on 100000 dollars is over 10000 dollars just on the duty. I can do a lot of things with 10000 dollars, I’m sure you understand that.
A lot of companies are so frustrated, but they’re doing nothing, not me, you know, I’m a creative, and I’m tough when it comes down to negotiation.
And I managed to have the supplier to share the burden with me, and this is how I did it. I called out for the Chinese suppliers and explain to them like this, Mr. Lee, there’s a problem for us, I hope you’re listening, I said, There’s a problem for us. I didn’t say there’s a problem for me. Our last shipment, our last shipment is been impacted by the new tariff of duty.
I’m pretty sure this is a temporary challenge, Can we work together to overcome this hardship, otherwise I have to look for alternatives.
I really don’t want you to have the risk of losing our business, let’s brainstorming an idea to share the impact.
The psychology of this negotiation is to bring your supplier into the ownership of the problem.
Emphasize this is short-term pain, and give them a reward if they do so which is to continue to have your business, otherwise, they will have a 100% risk of losing your business. guess what, after a couple of times, going back and forth, some are great 50/50 some are great 40/60. It doesn’t matter, get whatever you can get, that is the bottom line, money, if the duty is 10000 dollars for my container now is 5000 dollars.
This negotiation tip alone is going to save them thousands of dollars. Now some of you may be saying, What about me I’m not a big Amazon seller, actually, I have not even started, I’m researching a product what if the new product I’m researching is going to be impacted by the tariff, Of course, you can use the similar negotiation techniques if you have researched the harmonized codes that apply to your product.
You can go back to your supplier and tell them I have done some homework. The new tariff is going to impact your product.
Now this time is your product. Now, mine because I haven’t even thought it, so is there anything you can do on your pricing to offset the duty impact Can we go fifty percent on this, so I can buy products from you You see, negotiation is fun, right?
If you still think that negotiation is not your cup of tea, then you can consider hiring the best China product sourcing agent. They have more knowledge and skills to crack a deal with Chinese suppliers. You can be benefitted from their experience and end getting a great deal. Make sure that you choose an experienced sourcing agent in China.