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
Andropogon gerardii Blackhawks (Intrinsic Perennial Gardens)

April 25, 2017

Kelly Norris: Diversity is the Key to Growing the Ornam…

Offering a selection of ornamental grasses that cater to customer needs will keep sales from stagnating.

Read More
Florikan Space Technology Hall of Fame

April 25, 2017

Out-Of-This-World Plant Nutrition: Fertilizer Company I…

NASA scientists are growing vegetables on the International Space Station using Florikan’s controlled release fertilizer.

Read More

April 25, 2017

41 New Vegetative Petunias From California Spring Trial…

With the abundance of new introductions for the 2018 retail season, we’ve made it easier for you to sift through them by separating out the vegetative petunias from the Northern sites, which includes selections from Westhoff Flowers, Sakata Ornamentals, Danziger, Proven Winners, and Syngenta flowers.

Read More
Lighting Book Light Management in Controlled Environments

April 24, 2017

“Light Management in Controlled Environments̶…

An expanded update to “Lighting Up Profits,” this new lighting book unlocks the secrets of managing light to enhance greenhouse crop production.

Read More

April 24, 2017

Ian Baldwin Offers Examples From Grower-Retailers on Pr…

In March, Baldwin wrote a blog advising grower-retailers to consider raising their prices this spring. The post inspired a number of creative suggestions.

Read More
OHP PGR App

April 23, 2017

OHP Redesigns Its PGR Calculator App

The new version contains many of the same features as the previous version but now runs faster and works on all iOS device environments.

Read More
Kaylee South

April 22, 2017

American Floral Endowment Announces Winners of 2017 Pau…

Four students pursuing careers in horticulture now have scholarships to help them along the way, thanks to the American Floral Endowment.

Read More
Jim Zampini

April 21, 2017

Nursery Industry Leader Jim Zampini Dies at 85

Jim Zampini, a nationally recognized nurseryman and one of the leading figures in the thriving Lake County, OH, nursery industry for more than six decades, passed away on April 15 at the age of 85.

Read More
Begonia Spectre Silver Terra Nova Nurseries

April 20, 2017

Terra Nova Nurseries Releases Two New, Attractive Begon…

Stardust is the latest addition to Terra Nova Nurseries’ existing T Rex Begonia series, and Silver is the first introduction to the company’s new Spectre Begonia series.

Read More
GGS Cannabis Production

April 19, 2017

Suppliers Can Offer Technical Solutions for New Cannabi…

Here’s a look at how a few manufacturers have partnered with growers to make their transition into cannabis a smooth one, whether it’s through hands-on guidance or partnering with other industry leaders.

Read More

April 18, 2017

Cool Combos From CAST 2017 – Editor’s Choic…

With container gardening becoming more of a lifestyle among consumers than a trend, and breeders continuing to put more effort in container mixes and components, I feel I would be remiss if I didn't share some of the special combinations that not only caught my eye at California Spring Trials, but absolutely took my breath away and made me want to immediately get started gardening.

Read More
LumiGrow Growers Council

April 17, 2017

LumiGrow’s Latest Lighting Research Highlighted in Grow…

Industry leaders representing a broad range of vegetable, floriculture, and cannabis producers gathered to learn how to implement modern lighting strategies for their own production.

Read More
Danziger New Hires

April 16, 2017

Danziger Invests in Continued North American Business G…

As part of a new business structure for its North American market, Mike Fernandez has been appointed Market Manager North America for Bedding Plants and Perennials, and Kate Zvara was named as Key Account Manager and Retail Specialist.

Read More
Oregon Lean Nursery Consortium

April 15, 2017

How Oregon Growers Are Making Lean Improvements With He…

The Oregon Nursery Lean Consortium recently helped two Pacific Northwest growers realize significant productivity gains and labor savings.

Read More
Kemin Horticulture Trial

April 14, 2017

How to Trial a New Product Before You Use It in Your Gr…

Before you apply a new product on a plant, you want to make sure it is safe and effective. Technical experts from Kemin have compiled a five-step guide designed to help you measure the benefits of a new product you want to incorporate into your operation.

Read More
Venlo Greenhouse (Westbrook Greenhouse Systems Ltd.)

April 13, 2017

AmericanHort’s Production Technology Conference To Debu…

The AmericanHort Production Technology Conference is designed to give nursery and greenhouse growers a chance to get hands-on with the latest advancements in production technology and explore the return on investment potential of equipment purchases and upgrades.

Read More
Hydroponics Michigan State Web

April 13, 2017

Research Team Seeking Feedback From Hydroponic Growers

Are you a hydroponic grower of food crops? If so, Michigan State University and Iowa State University researchers are looking for your input.

Read More
Florida Flower Trials

April 12, 2017

Looking for Info on New Varieties for Hot Climates? Che…

The Florida Nursery Growers and Landscape Association’s Florida Flower Trials, which are focused on new and improved varieties able to thrive in the extremes of Florida’s climate, are a great opportunity to connect with national breeders.

Read More