The expert route to sourcing in Asia.

There are 5 golden rules to business in China.

•     Have a representative on the ground to deal on a daily basis with the supplier. Time difference, language difference and cultural differences make it difficult to deal in the way you are used to. If things get tricky suddenly that faultless email and phone system you have used for years suddenly starts to fail ! It is easy to contact suppliers when asking for quotes or placing orders, is it so easy when there is a problem with quality or a delivery is delayed ?

•    Understand that we are not the same ! Never, ever, ever make an assumption that the Chinese supplier will ‘know’ or ‘it is so obvious’ that you do not need to explain, if the supplier is left to his own initiative they will do something which is totally different to anything you could have possibly imagined ! e.g. ‘We quoted it in Aluminium’, but the part drawing said it needed to be ‘brass’? ‘Oh, this supplier makes most things in Aluminium so we thought it would be OK !’

•    Visit the supplier, ask the relevant questions, get a ‘feel’ for the company, does the representative know where everything is in the factory ? Is he part of the management? Does he look comfortable and part of the set up ? Many, many Chinese have a ‘friend’ who can ! OR an Uncle who does ! This does not necessarily mean they have anything to do with the company you are visiting or maybe this is not the company who will be making the parts. I have heard examples of company names being changed just for a visit, quality documents which are not even for that company and I have visited companies who did not have the facilities or capabilities to produce the product they were quoting for. ISO and TS certificates can be bought at the local market in China ! Many companies can and do use these systems correctly but some don’t, can you tell over the phone ?

•   Negotiate prices, payments and deliveries up front. You can get a great price and then discover it is going to be based on the finished product weight, or the packaging is more, or the freight is not included etc.

•   Do not expect great credit terms up front, they don’t know you (unless you are representing a blue chip or fortune 500 company !) and you don’t know them ! Buyer beware !

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