What China sourcing and building a house have in common

The other day I received an email from a client I helped two years ago. I had found a vendor for this client and things were going well until recently when my client said that he was having some communication and other issues with the factory. This was a vendor I had met at the Canton Fair. All the pre-production samples and vendor communication had been great and the pricing was very good. As my involvement was winding down I advised my client to audit the factory before he gave them an order. Accordingly he had his Hong Kong inspection company go to the factory and they passed it with flying colors. The impression of the Hong Kong inspector – someone very experienced with factory inspections – was that this was a very good factory. The first couple of orders were fine. And then pricing started to go up, which of course is SOP in China ( especially with buyers who sell their products online where retail pricing is in full view of everyone, including vendors in China) And now my client has started to have some unfriendly exchanges with his factory contact, a lady I had met in Canton and who I had a very good impression of.

It is hard to know what is going on here because I no longer work with for this person. He now has a North American based agent with full-time local personnel in China manage his orders. One possibility is that there is a personality clash between the local employee of the agent’s company and the vendor and that this is impacting my former client’s relationship with the vendor. This does happen all the time in China and is one reason you really might not want to use a third-party in your China sourcing.

Another possibility is that the vendor feels slighted because my former client has never visited the factory, but just sends someone else. When you do production in China it is imperative that you show up occasionally, as a sign of respect to your vendor who, in fact, you are asking to help grow your business. Vendors take buyer visits very seriously and no expense is spared in welcoming overseas guests to China. It is not only a chance to show-off modern China to overseas guests, but historically Chinese have relished the opportunity to fete foreign visitors because they feel it can give them the upper hand in negotiations. They want to entertain you. The message you are sending to the vendor if you do not show up, but ask someone else to go for you, is that the vendor is not worthy of your time. It also sends the vendor the message that you do not really care about your business.

Once again I use my house analogy here. Let’s say someone comes to you, the contractor, and asks you to build a house for them. You start building the house but months go by and you never see the person who you are working for. You get emails from them occasionally and every so often someone, say a friend of the person, stops by to see how things are going. But the person himself, who asked you to build the house, never comes by. Are you going to feel an attachment to that person? Probably not.

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