Tips for Managing Relationships with Chinese Suppliers
Managing the relationships with Chinese suppliers is not easy, the cultural difference, the language issue, the communication problem, different social system, different business culture and practices, etc.
But, managing the relationships with Chinese suppliers is not that difficult at all, if you can answer the questions: How do you define the relationships with Chinese supplier? Do you think your relationships with the supplier are equal? Do you think your order is a blessing or giving to the supplier? Do you often threat the supplier that if they don’t do this or don't do that, you will change the supplier, as you said there were many qualified suppliers lining up for your order?
The relationship should be equal
We recently read a story on the leading international trade forum fobshanghai.com, a Chinese supplier complained how their big buyer behaved arrogantly and how it was indifferent to the benefit of their suppliers, The buyer often canceled orders without prior notification, which had caused huge money loss to the supplier as they had already started production. The buyer did not give any reason and refuse to compensate the supplier for the monetary loss.
The relationship between the buyer and the supplier is not equal. The buyer might think that their big order is a blessing to the supplier, so the supplier should do whatever they are asked to do to please the buyer, fair or not. However, in the end, the supplier refused to supply to the buyer any more. The buyer maybe thinks they have plenty of backup suppliers to replace that supplier, however, if things go on like this, the buyer might develop a bad reputation among Chinese suppliers.
Even many small and medium sized buyers are as arrogant as this buyer. Gradually they will find the relationships with the suppliers become intense and tough.
Vice versa, it is very common that big suppliers belittle small buyers, we are helping a big importer find Chinese suppliers, out of the vast suppliers we contacted, a few of them are very arrogant, they even don’t have interests to answer the telephone, reply the email and try to learn our inquiry. We also help small and medium sized buyers verify Chinese suppliers, oftentimes we heard the suppliers says they are too busy, too many orders, and they don’t care if they buyers buy from them or not. Our advice to the buyers is “dump those arrogant suppliers”.
We are partners.
Companies need to cooperate with upstream and downstream companies, suppliers, service providers, distributors, logistics companies, etc. You need the cooperation and support from other partner companies in your supplier chain to improve your competitiveness; otherwise your company will achieve nothing.
As partners, we should try to share market intelligence with suppliers, we help them grow, we give them feedback and suggestion to improve their products, we let them feel we not only buy from them, we see them as partner, we help them grow. If the R&D ability of the factory grow, if they can lower their price and improve the competitiveness of their products, in return, that will help the buyer’s company grow.
The language issue causes most miscommunication, English is not native language of your Chinese supplier, so they are always struggling to express and understand things in English. You will agree with me if you have visited Canton fair. The salesmen there are elite salesmen, however, at most booths, you will find you will only be able to communicate with them in very basic English, especially, many of them will have problem with speaking and listening, writing is somewhat easier for them compared with speaking and listening.
To avoid language barrier, here is some advices I would share:
1. Use simple and easy to understand English
When you write an email or converse on instant messengers, try to use simple and basic English to express yourself, if your supplier didn't respond to your questions, which you think is important, explain that question, and ask again, they might not understand that question at all.
2. Write instead of Speak, if it is important
Calling the supplier can speed up communication, however, in most cases, you will find it much more harder to communicate on telephone (in spoken English), than communicate in email (in written English).
So for important matters, try to write in Email, then make a call to confirm if they have received it.
The knowledge, expertise, and experience of salesman might be another reason that causes communication barrier.
Managing the relationship with suppliers is not easy. Miscommunication can lead to dispute, misunderstanding destroys the chemistry between the supply chain, misinformation causes improper decision and bad results.
The question is not if, but how! How should we communicate with Chinese supplier effectively?
Most suppliers are factories, especially when you dealing with small to medium sized factories, you should be aware that things might not go as well as you planned. Factories mostly locate at remote locations, so the workers in factory, in many cases, are under-educated. So be patient, teach them, guide them, and lead them to right direction. Don’t take it for granted that every supplier will be capable and experienced enough as to deliver your products in a professional way without any issue.
Trust is important
Company is not a bloody cold organization, it is a group of people with character. So dealing with supplier, in essence, is dealing with people, or to be precise, dealing with Chinese businessman. Don’t disguise yourself in business English, cold contract, promise, deadline, conditions and terms. You will find some casual greeting, care, love bring you closer to the supplier (the key persons).
Sign a contract
A contract, not a relationship or anything else can protect your benefit. Be careful with every clauses and terms. Hire a legal expert to draft and review the contract. But remember, contract and legal action is the last resort, it will be costly to file a lawsuit in China, time and money wise. So the best way dealing with Chinese supplier is to get the contract signed at first, try to communicate with supplier to get any issue solved in a friendly way, don’t threat to go to court for tiny mistakes from suppliers.
99% businessmen are not scammers
Most people are decent businessmen, they try to grow their business in a legal way, not try to scam people. Some people are scammed when trying to buy branded products or others, but generally, like the people in China, most of businessmen here are friendly and nice as well.
Prepare for mistakes
International trade is complicated, any mistakes with specification, production, packing, shipping, communication and language translation can cause problem. The process of international trade is about how to avoid mistakes and when mistakes happen inevitably, how to solve them in a friendly way.
There are tiny percentage black sheep hidden out there, waiting for chances to cheat you. Due diligence is like covering insurance -- it is all about probability. You don’t risk your business by taking chances.