Introduction: The Core Challenges in Global Sheepskin Buying
International sheepskin procurement helps businesses access high-quality materials at competitive prices. But two key hurdles often slow buyers down: MOQ (Minimum Order Quantity) and payment terms. Suppliers set MOQ to cover production costs, while payment terms affect your cash flow. Negotiating these well can save you money, reduce risk, and build strong supplier relationships. This guide breaks down simple, actionable steps for both.
Part 1: Negotiate MOQ for Sheepskin – Understand, Prepare, Compromise
MOQ is not random. Suppliers use it to ensure their production runs are profitable. For sheepskin, this depends on factors like tanning capacity, raw material sourcing, and shipping costs. Before you negotiate, do your homework.
1.1 Know the Supplier’s “Why” First
Ask suppliers about their MOQ reasons. For example:
- A small tanner might set a 300-unit MOQ because their machines need a minimum load to work efficiently.
- A supplier near a sheep farm could have a lower MOQ (150 units) since raw materials are easy to get.Understanding their constraints helps you propose solutions they’ll accept.
1.2 3 Practical Strategies to Lower MOQ
You don’t have to accept the first MOQ offer. Try these tactics:
- Split orders: If the supplier’s MOQ is 400 sheepskin rugs, ask to split it into two 200-unit shipments. This eases your inventory pressure and still meets their production needs.
- Promise long-term 合作: Say, “If I take 200 units now, I’ll order another 300 in 3 months.” Suppliers value repeat business and often cut MOQ for committed buyers.
- Combine products: If the supplier sells both sheepskin coats and rugs, mix your order. For example, 150 coats + 150 rugs might meet their total MOQ (300 units) while letting you diversify your stock.
Part 2: Negotiate Payment Terms – Balance Safety and Flexibility
Payment terms determine when and how you pay. For international sheepskin deals, common options include T/T (Telegraphic Transfer), L/C (Letter of Credit), and DP (Documents Against Payment). The goal is to find terms that protect you (from non-delivery) and keep the supplier happy (from late payments).
2.1 Learn the Most Common Terms for Sheepskin
- T/T (30% advance, 70% after shipment): This works for trusted suppliers. You pay 30% to start production, then 70% once they send shipping proof.
- L/C: Best for new partnerships. A bank guarantees payment, so the supplier gets paid only if they meet your order specs. It’s safe but adds small bank fees.
- DP: You pay when you receive shipping documents (before getting the goods). This is riskier than L/C but simpler for small orders (e.g., 100 sheepskin blankets).
2.2 Tips to Get Favorable Payment Terms
- Use your credit history: If you have a good record of paying suppliers on time, show it. Say, “Here’s my payment history with 3 other sheepskin suppliers – I always pay within 7 days.” This can help you avoid high advance payments.
- Tie terms to order size: For larger orders (e.g., 500 sheepskin boots), ask for better terms. Example: “I’m ordering 500 units – can we do 20% advance instead of 30%?” Suppliers often agree to this for bigger volumes.
- Offer a middle ground: If the supplier insists on 50% advance, propose 30% advance + 20% when production starts + 50% after shipment. This splits risk for both sides.
Conclusion: Key Takeaways for Successful Negotiation
Negotiating MOQ and payment terms in international sheepskin procurement isn’t about “winning” – it’s about finding a win-win. Remember these steps:
- Research the supplier’s constraints before talking.
- Propose flexible solutions (split orders, long-term commitments) for MOQ.
- Choose payment terms based on your relationship with the supplier (L/C for new ones, T/T for trusted partners).
- Always keep communication open – suppliers are more likely to compromise if you’re clear and respectful.
By following these tips, you’ll reduce costs, lower risk, and build supplier relationships that last.