Negotiating With China

Everyone knows China is the number one supplier of goods to countries around the world. The United States continues to be one of China’s main importers, and this is unlikely to change in the next decade. Many large growers have sourced manufacturers to supply them with some of their needs in order to have a good product at a reasonable price.

Over the last 30 years, China has used its number one resource – people with low incomes – to produce products that can be exported to Hong Kong, Singapore, Japan, Europe, Australia and the U.S. Here in the U.S., we have enjoyed low-priced products, and probably 99.9 percent have satisfied consumers.

This, however, does not take away the fact that some quality control procedures have surfaced, such as the powdered milk problem, tires, toothpaste and wall board. I am sure we have also seen, at the same time, our own U.S.-manufactured products taken off shelves.

What Are We Sourcing?

Many of the Top 100 Growers continue to purchase significant quantities of product from China to keep or reduce the cost of plant products delivered to their retail customers. We now have a couple of decades behind us in which low-priced product is expected – and required – for growers to survive. These products generally fit three categories:

1. Greenhouses, greenhouse equipment, greenhouse carts, wet-pads, shade systems, shade systems, shade fabric, reverse osmosis Systems, greenhouse fans, horizontal air flow fans and other types of greenhouse supplies.

2. Containers, ceramic pots, injection molded pots, plug trays, blow-molded decorative pots, water-soluble fertilizer, decorative stone mulch, custom-molded containers, marketing materials and other production supplies; and

3. Tissue culture plants, rooted and unrooted cuttings, older high-end plants requiring extended growing time such as Phalaenopsis plants, Lucky Bamboo and other forms of plant material.

China has had several changes in its economy over the last five years, reducing the price difference we saw 10 years ago. Over the last five years the U.S.-China currency exchange has changed about 21 percent, and it is starting to change even more.

In the last five years, China has had inflation pressure – even during the current global economic crisis. Over the last five years, Chinese inflation has increased 15 to 30 percent, depending on whether you rely on the official data or the real situation, with everything from prices at the gas pump, housing costs, food costs or going out to eat at a restaurant.

The cost of shipping from China to the U.S. has also doubled. Now, there is pressure on the minimum wage system, with 14 of the most important manufacturing provinces increasing their minimum wage to double-digit levels.
Advice For Growers

Now, with all these cost increases, how can growers be at an advantage purchasing from China? Well, China still has room to produce at a lower price, but you have to use your purchasing power to get the right price.

China’s wages are still much lower and its management overhead and management system carry a much lower cost. University graduates are still in an oversupply situation, with many graduates earning higher degrees because the job market is now absorbing the annual number of graduating students.

The bottom line is China has the ability to produce at a lower cost, but you have to meet China face to face and negotiate to get the best price. An agreement with a Chinese manufacturer is somewhat different from a typical agreement in the U.S. Growers must focus on the smallest details: describe what you expect in terms of quality, in detail, and lay out guidelines for failure to deliver on time.

Never pay in full in advance, but work out a method that is fair for both parties. Avoid “letters of credit,” as they have loopholes that can result in non-payment. Use a third party friend to introduce you to the Chinese company, and your relationship will be on a fast tract.

Some of the Top 100 Growers and some of the greenhouse manufacturers in the U.S. source from China to offer the best value possible. If you are not considering purchasing from China, it is not too late to investigate.

Leave a Reply

One comment on “Negotiating With China

  1. Dears, We are a company that is starting to import hobby greenhouses. We have quoted with many Chinese companies but we aren't sure which one is a reliable and good quality supplier. Can you help us and recommend some suppliers? Kind regards and thanks in advance for your help. Naiffe Jasen

Latest Stories

October 21, 2016

How To Select The Best Nutrients For Growing Cannabis

With a little bit of knowledge about the requirements of cannabis plants and how they absorb and utilize nutrients, you can confidently select the products you need without breaking the bank.

Read More
Sakata vincent-choice-sunflower

October 20, 2016

Sakata Develops New Downy Mildew Resistant Sunflower

‘Vincent’s Choice Deep Orange DMR’ has a deep orange color and a bit more pointed petal form than the other varieties in the Vincent series. It is resistant to more than 10 races of downy mildew that currently affect sunflower.

Read More
Albert Grimm, Jefferys Greenhouses

October 19, 2016

How Jeffery’s Greenhouse Is Investing In The Indu…

Greenhouse Grower reached out to Albert Grimm, the 2016 Head Grower of the Year and Head Grower of Jeffery’s Greenhouse, to ask what he and his company have done in the last 12 months to invest in the industry. Here is what he had to say.

Read More

October 18, 2016

Dümmen Orange Buys Rose Breeder, Participates In Petal …

Dümmen Orange will be hitting the streets of Columbus, OH, this week, handing out some of its favorite flowers as part of the Petal it Forward program in partnership with the Society of American Florists.

Read More

October 18, 2016

Lighting Research Center Is Surveying Growers On Supple…

The Center, part of the Rensselaer Polytechnic Institute, is looking for commercial growers to participate in an online survey regarding supplemental greenhouse lighting.

Read More

October 18, 2016

The Best Garden Products Retailers Found At This Year&#…

We reached out to dozens of plant retailers, asking them to name their favorite products from the summer trade shows. Here’s a slideshow of their non-greengoods picks.  

Read More

October 18, 2016

How To Do Your Own Consumer Research

We talk to Fuel Insight's Doug Sapp about his tips on figuring out how customers really shop your store.

Read More

October 17, 2016

How To Make Your Plant Yard Easier To Shop

Garden retail consultant Robert Hendrickson once observed that merchandisers at garden centers seem to have a bungee cord attached to their belts. They can work freely indoors, but the moment they reach the doors to the outdoor plant sales yard, they’re yanked back inside. That problem doesn’t seem to exist in Europe, as any American plant retailer who has toured their peers overseas can attest. Luckily, a European visual merchandiser who understands how to boost plants sales with effective displays, has written a book designed for non-merchandisers. Antje Verstl’s ‘Eagle & Frog’ is packed with tips and illustrating photos, so readers can clearly understand her advice. After reading her book, I asked Verstl a few questions about her views on plant merchandising and what kind of advice she’d give to American garden retailers. Q. Good visual merchandising can be expensive (labor-wise, and sometimes in materials) and time-consuming. Many retailers feel their staff is too […]

Read More

October 17, 2016

Altman Plants Hosts Media Day To Highlight Its Water Sa…

This month, Altman celebrated more than 100 million gallons of water saved since its water recycling program began operation.

Read More
Coreopsis 'Madras Magic' (Terra Nova Nurseries)

October 17, 2016

New 2016 Perennial Introductions For Zone 6 And Up

Some perennials are at their best in warmer climates, but that doesn’t mean they can’t be used in colder areas for season-specific containers or grown with cool-crop annuals to add some unique offerings to a product mix. Here are 11 new introductions hitting retail in 2017 that are hardy in Zone 6 and up.

Read More

October 17, 2016

International Forum Of Agricultural Robotics Will Highl…

The inaugural event, organized by two France-based companies, is designed to bring together ag robotics stakeholders to discuss, debate, and exchange ideas on the future of agriculture.

Read More

October 17, 2016

11 Award Winning Annuals You’ll Want On Your Benc…

All America Selections tests plants in gardens across the country for performance and health. Here are 11 that have made the cut over the past couple of years.

Read More
Caterpillar on leaf

October 15, 2016

Offer Your Customers Host Plants For Caterpillars And B…

Just like bees need plants that provide pollen, butterflies rely on plants for a place to lay their eggs and to provide a food source for emerging caterpillars. Check out this list of plants for caterpillars and butterflies from Michigan State University Extension.

Read More
Bees on flowers

October 13, 2016

45 Pollinator Friendly Perennials Sure To Attract Bees

Pollinator friendly perennials are the foundation of a well-rounded pollinator garden. Check out this list of 45 perennials that are sure to attract bees.

Read More
eric smith Biosafe

October 13, 2016

BioSafe’s New Hort Sales Rep Says Water Regulation And …

Eric Smith, BioSafe Systems’ New Horticultural Technical Sales Representative, has several years of experience that he says will help him when working with growers on critical issues facing them.

Read More
Echinacea Butterfly Postman

October 12, 2016

16 New Perennials For Pollinator Gardens

Customers who want to attract butterflies, bees, hummingbirds, and other pollinators to their gardens need plants that will provide food, shelter, and protection throughout the year. Consider carrying a few of these 16 pollinator-friendly perennials for retail sales in 2017.

Read More

October 12, 2016

Leo Roozen Takes Home Paul Ecke, Jr. Award At SAF Conve…

Since 1985, Roozen has been the president of Washington Bulb Co., in Mt. Vernon, WA, turning it into the country’s largest flower bulb grower.

Read More
Dual Atrium Greenhouse (Nexus)

October 12, 2016

Gibraltar Industries Acquires Nexus Corporation

The building manufacturer and distributor strengthens its position in the U.S. greenhouse market, complementing its RBI greenhouse company with the aquisition of Nexus Corp.

Read More
[gravityform id="35" title="false" description="false"]