Many importers are frustrated and exasperated by the behavior of some Chinese suppliers, who are “playing games”.

Paul Midler’s book (Poorly Made In China) does a fantastic job at dissecting the tactics of a few Chinese suppliers. Actually, he originally wanted to call his book “The China Game”…

Unfortunately, Chinese exporters are experienced players. They are quite good at extracting dollars from their customers. And they are on their own turf.

So, what can foreign buyers do to avoid pitfalls? I can see a few solutions:

Changing the rules

If you keep losing at a game, maybe you should change the rules. There are two ways to do this:

• With a legally enforceable OEM agreement that binds your supplier
• With a letter of credit (no upfront deposit, easy to cancel)

Changing the players

I have seen many importers working for too long with a poorly-performing supplier. Once a factory screws up on an order, the relationship seldom gets better with time!!

So a solution is to switch to another supplier. I know, it is not easy and sometimes it is not realistic. But you should try to keep your options as open as possible.

Also, don’t hesitate to “punish” a regular supplier by suspending orders for one season. If you announce it and you do as promised, they will be more careful in the future.

Changing the way you play

Some buyers place orders without clear specifications, don’t pay enough attention during the sample approval process, and then push the manufacturer to ship “as soon as possible”.

This is a recipe for disaster. Be more organized, don’t ask for favors from your supplier, and you’ll be in a much better position.

Learning all the tricks

I have worked closely with an importer who, after 15 years of hands-on experience in China, was savvier than his counterparts. He was excellent at slashing prices, was setting tough terms, and was paying everything through letters of credit.

The problem with that strategy is that few suppliers in his industry accept to work with him, and he has gotten a bad reputation. Not something I advise!

Changing the playing ground

If you keep losing money on your China orders, why don’t you try to buy the goods once they are in your country, in stock?

For certain kinds of products (with low customization), this is usually possible. There are always new intermediaries ready to take this risk… New players in the sourcing game!