Something that often isn’t adequately taken into account when someone starts an Amazon FBA business is the massive cultural differences between most Western countries and China. While courses such as Nine University teach you how to negotiate with Chinese suppliers, understanding the cultural differences will make you a stronger negotiator. In this article, I’m going to teach you how to negotiate with Chinese manufacturers as an Amazon FBA seller, by using knowledge of their cultural distinctions to strengthen your position.
How to Negotiate with Chinese Manufacturers as an Amazon FBA Seller
When interacting with Chinese suppliers, you often have to engage in negotiations to set prices on the goods you buy. As with any negotiation, it’s important to understand the history of the culture you’re negotiating with and how that influences their negotiation style. When you’re armed with knowledge of the culture and its history, you’ll be a more effective negotiator and more easily able to achieve a solution that leaves both parties satisfied.
While you need to understand and observe certain etiquette rules of the Chinese, that’s only a portion of the negotiation process. The values of the Chinese culture influence their style of negotiation. Several cultural roots have formed Chinese values, including agrarianism, morality, a pictographic language, and a wariness of foreigners.
Foundations of Chinese Economy
Even today, agriculture forms a huge portion of Chinese business, since two-thirds of the Chinese live in rural areas. A sense of community and familial loyalty are the foundation of this agrarian root, and their culture therefore tends to favor the idea of working directly with agriculture. This is in contrast to the American history of moving away from a manufacturing economy and towards a service economy.
The writings of Confucius have a huge effect on the sense of morality in Chinese culture. His idea that society prospered when organized under a moral code still informs Chinese culture today. This moral code means that the Chinese value the ritual of haggling and achieving a compromise, as opposed to the tendency of American culture to go straight to the goal and be less concerned about the path to get there.
While Americans learn written language through Roman letters and Arabic numerals, the Chinese learn through memorizing pictorial characters. This impacts the worldview of their respective cultures, with the Chinese more inclined to look at the bigger picture than Americans, who tend to be more detail-oriented.
China has a long and painful history of attack from outside forces, leading to a mistrust of foreigners that is ingrained in every part of their society. There is also a long history of internal conflict in China, with the transitions of different empires and civil wars, so trust is largely limited to family. While the United States has had its share of internal and external conflict, it’s also a newer country with less of a history of attack from outside enemies. This means Americans have less experience to draw on to cause them to mistrust foreigners. This makes it difficult for most Americans to appreciate how deep the Chinese mistrust of foreigners can be.
Since Chinese culture is rooted in a moral code, it means that the Chinese value reciprocity, even over the long term of negotiations. The hierarchical part of their moral code also means that social status is incredibly important to them. Their use of intermediaries can be explained by the mistrust of foreigners, and they tend to favor a holistic worldview due to their use of pictographic language.
Of course, China, like any country, is made of varying individuals, but understanding the foundations of their culture and economy can help with understanding their negotiating style. By understanding their history and culture, you have a better chance at successful negotiations.
I hope this helps you grasp a better understanding of how to negotiate with Chinese manufacturers as an Amazon FBA seller. If you’re looking to understand even more about starting and running your own Amazon FBA business, I recommend looking into Nine University. Nine University’s FastTrack program can have you running your own Amazon FBA business in a matter of weeks, while enjoying the support of the Nine U community. When you’re ready to get serious about selling, Nine University can help you out.
