Managers interviewed say that different distributors often charge different prices, indicating there are no fixed pricing standards for products. Payment Conditions Payment is one of the most important and challenging elements of doing business in China. Payment conditions must be well negotiated, understood and mutually acceptable between the retailer and the foreign company before any trade transaction occur. There are three methods of payment available with retail outlets in China. Unless the retailer can be convinced a product will immediately sell in volume, consignment is the preferred and only method of payment with retail outlets for foreign companies who are in the local market for the first time.
Retailers accept the products and try to sell the products at their store.
If the products are saleable, and is positively received by local consumers, details to complete the business deal is finalized. An alternative payment arrangement may ensue depending on the success of the product sales. Except for seafood companies, most payments for other agriculture and food products are done through the Bank of China's Line of Credit. This is an agreement or contract that outlines the conditions of payment between the retailer and the exporting company and administered by the Bank of China. In order to gain local Chinese consumer support and succeed in the local market a lot of effort and money is needed to invest in the promotion and advertisement of products.