Despite the country’s enormous size, China is not as connected to the global economy as one might expect. When it comes to importing from China, Western corporations publicly complain about the difficulties of doing so. Although mistakes are common, they can be avoided with enough study, due diligence, and active participation throughout the purchase process. In order to create a long-term connection with Chinese manufacturers, here are seven mistakes to avoid.
Failure To Perform Supplier Audits
All well-known listings of Chinese suppliers have their fair share of dishonest companies in their ranks. You may be swayed by claims that are either half-truths or outright fabrications. The worst-case situation is that you’ll be forced to engage with a trading company that raises your prices significantly.
You or a third-party auditor must visit the Chinese factory to conduct an audit. Your first encounter with the supplier is ideal since Chinese business culture places a high value on “guanxi” – a system of beliefs that highlights the underlying dynamic in social networks or interpersonal ties. If you are looking for a reliable GuangZhou sourcing agent, check out justchinait.com.
Asking questions in person gives you a sense of the supplier’s character. You can detect if a vendor is being open and honest by their nonverbal indicators. Product inspection should be performed on every batch and at various points in the production process. You’ll be able to evaluate providers more accurately and choose the best firm for your needs if you visit their plant.
The Practice Of Not Placing Orders For Product Samples
In some cases, it is possible that your provider will not go through your whole set of specifications. If they don’t pay attention to even one small detail, the end result could be subpar. Buyers routinely request samples from a variety of vendors. Proof that your product can be made to the supplier’s specifications can be found in the sample you receive.
For the supplier, it serves as ‘practice’ in understanding what you truly want. Provide comments and try again if only minor changes are needed in the sample, and if you like the rest of the things so far. If you receive a subpar sample, you may have to find a new provider.
To win your trust and business, providers will send you a high-quality sample. Despite the supplier’s best efforts, there is always the possibility that the “golden sample” was obtained from another manufacturer. If you make an order based on just the supplier’s behavior and not the sample quality, there’s always the chance that the final product will fall short of your expectations due to the fact that it was produced at a less expensive factory.
Believing That The Manufacturer Is Aware Of Your Needs
You may find it challenging to communicate your needs quickly and clearly if you are dealing with a language barrier. Chinese suppliers are likewise viewed as a source of ‘losing face’ as part of their culture.
Businesses in China are concerned about how they are perceived by others and strive to conduct themselves in a manner that is considered socially acceptable. To maintain one’s dignity, one may choose to exaggerate the truth.
If you have any questions, ask if your supplier has an English-speaking sales representative. However, it’s possible that none of these individuals are working on the production line or have authority to make decisions. Because they fear ‘losing face,’ sales people often resist asking for clarification when you try to explain technical details to them.
If the supplier doesn’t respond to your questions, you can’t trust that they understand your needs. Make a list of all the things you need to do and go over it with the factory manager or a member of the factory staff via video or phone call.
Remind them that the product must be manufactured to exact specifications in order to be sold and encourage them to seek clarifications. Also mention that if all goes well, you plan on placing a substantial order as well.
Using A Hands-Off Approach To Work
Communication with your supplier is really important. Be kind, yet tough. Decisions are made centrally in Chinese businesses, and what the decision-maker decides is final. In the event that you fail to follow up, your provider is likely to do the same. Assertively communicate with them to keep them on their toes and display leadership.
Inflexible Pricing And Minimum Order Quantities (Moqs)
China’s manufacturers have low profit margins, thus they are strict about minimum order quantities. If you pledge to place a larger order following your initial buy, they may be more willing to drop their MOQs. The supplier’s willingness to comply will be influenced by the manner in which you express your commitment.
Since their business hasn’t taken off yet, new Amazon sellers may have a harder time negotiating price and payment arrangements. If your request doesn’t jeopardize the supplier’s capacity to make a profit, your email may persuade them to give you a chance.
Quality is matched by price. Be sure to have a goal price in mind before you get down to negotiate. Because the supplier is a business, it’s important for you to understand how they operate. Driven bargaining can damage your relationship, but more likely it will affect the quality or total service you receive.
A Manufacturing Agreement That Isn’t Completely Watertight
When it comes to the extent of the engagement, your manufacturing agreement should be crystal clear and explain the precise production needs for your product. Your manufacturing contract should clearly outline the manufacturer’s responsibilities.
Final Word
It can take anywhere from a few weeks to a few months to negotiate with a Chinese supply chain. Making the appropriate decisions and entering into a contract that provides a firm foundation for your budding business are made easier when you know what you’re getting yourself into. Follow the above mentioned points to avoid making mistakes.
