Some random thoughts on doing business in China

I am working on a project now which poses some problems. A customer of mine wants something a vendor does not want to give her:  lower cost.  My advice to my customer is simply to look for another vendor ( one reason being that I have seen some red flags with this particular vendor ).  Yet my customer insists on pursuing this factory because she likes their apparel designs.  I was thinking about this situation today simply because I want to give her the best advice possible.  Here is what I would tell her:

1.)  Just because you are interested in a vendor does not mean they are interested in you.  A case in point:  after I returned to Tokyo from the Canton Fair in November  I followed up with eight vendors I had met and discussed a project with.  Four of the vendors were very slow in replying or did not reply at all.  When I reported this to my customer he told me to keep trying saying that “all business people want to make money.”  Well, apparently that is not the case with these four vendors because almost two months later nothing has happened even after repeated emails and phone calls. These vendors, for one reason or another, are simply not interested in the business my customer has to offer them.   China is different nowadays. There are many factories that are busy and they do not want orders unless they are sizeable ( tens of thousands of pcs) and easy to do.  I have addressed this issue in previous blog posts. In short, you just can’t force a vendor to take your business. If you have any sense at all that they are not interested in working with you take your business elsewhere, fast. 

2.)  Just as when you buy a house you inspect every room in the house so when you evaluate a vendor you need to consider all variables e.g. cost, product design, QC, lead-time etc. You should not give weight to one variable e.g. low cost or low minimums, at the expense of all the other, sometimes equally important, things that get goods to market.  Just remember: it does not matter how good the design is, if the vendor cannot work with you to get quality product to your customers at a cost that they ( your customers ) are comfortable with then the design is absolutely worthless. 

 3.)  You have to be very careful when selecting a vendor in China. I have worked for or advised companies that have lost tens of thousands of dollars simply by partnering themselves with the wrong vendor in China. These fiascos usually are the result of either:

 a.)  a rush to find a supplier. 

 b.)  a buyer focuses on a part e.g. usually low cost or design  and is blind to the whole.  

In short,  it is wise to look at the picture carefully and from as many angles as possible.  And when you see blemishes don’t ignore them.


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