In this episode…
In this series of episodes, we’re exploring how to do your own sourcing from China, from finding suppliers for your products to getting them made. Today, how to build relationships with suppliers!
It includes hard skills, that we’ve already covered in episodes 1 to 4, such as identifying suppliers, negotiating terms and describing your specifications, how to manage projects, and how to check product quality. Click here to listen to those earlier episodes.
However, sourcing from China also includes soft skills, and there is where our attention turns in this episode where Renaud and Adrian focus on how to build relationships with suppliers.
Just hit the play button to start listening..!
Listen to the episode right here 👇👇👇
🎧 Sourcing from China (Part 5): Building Rapport With Suppliers 🎧
00:00 – Greetings & topic introduction.
02:48 – Three types of relationships you may have with a Chinese supplier.
3 situations when you work with a Chinese supplier:
- They don’t know you aside from receiving your orders, samples, and emails.
- They know you, you’ve visited them, built some rapport, and they have a positive impression of you.
- They know you and they don’t like you. Maybe they see you as a troublesome customer. They still work with you and fulfil your orders, but their negative impression may prevent them from providing the best service or doing you a favor when needed.
07:25 – Reciprocity for favors between suppliers and customers.
Suppliers who do you a favor will commonly expect reciprocity from customers they have good relationships with, so they may well call on you to help them in future, too. For instance, if they keep a price low for you, they may expect you to accept a bit lower quality in return (not the case with products that are very sensitive to lower quality such as medical devices, for example, as the suppliers understand they can’t alter the quality for safety & compliance reasons). This ‘give and take’ is often unspoken.
10:18 – What are the inner and outer circles in Chinese relationships?
Inner circle relationships are close family members, friends, and contacts with who you have a lot of common ground. This may be someone you went to school with or even a business contact from the same hometown whom you get along with. People in the outer circle are strangers or acquaintances where there’s no trust (yet), and Chinese people may not show much care towards you or consider how to keep you in their network long-term if you’re in this circle.
This is a bit different from business relationships in the West where it’s almost implicit that everyone wants to work together to get a favorable outcome, even if they do not know each other. That being said, Chinese people are usually pretty open to people from other countries and cultures, so building rapport isn’t impossible.
13:30 – Is it worth befriending your Chinese supplier to break into the inner circle?
Being interested in them as people always helps, but a couple of positive interactions doesn’t mean you’re a ‘good friend’ yet. Also, business needs to come first and you will be respected if suppliers see that you protect your interests in a balanced and fair way.
16:04 – What is the concept of ‘face?’
Putting people down, especially in public or email chains, is a surefire way to get ignored by Chinese people and alienate yourself to them because they’re losing ‘face’ or social credit. Speaking in a fair, balanced, and predictable way with respect for the other party, even if a mistake has been made. It doesn’t mean you can’t inform a supplier that you’re unhappy if mistakes have been made, simply do it in a professional and respectful way without calling individuals out in front of everyone else. Make your expectations clear and have them confirm they understand in advance, this could be your quality standard, for instance. Then if problems occur this can be referred back to and disputes can be avoided.
No need to be scared of any confrontation in case of issues, though. Chinese people are usually pretty direct, especially in factories. So sugarcoating your feelings could lead to misunderstandings or them not reading how important the issue is to you.
23:13 – Tips for how to build relationships with suppliers in China.
Meeting them is helpful and allows you to get to know them. If they know and like you there’s more chance of them being responsive and providing better service. Before Covid going to China was a must, but now the best practice will be to schedule regular video calls. Keep them brief and with a clear outline and to-do’s for after the meeting.
26:20 – How to be seen as a ‘good customer?’
Suppliers will tend to make allowances, work harder, and do favors for good customers. They’ll also be more afraid of losing your business and less likely to gouge you on price. The alternative is that they might not like you and will see you as a pain, leading to the opposite. So, act reasonably, predictably, communicate clearly about what’s important to you, don’t squeeze them on price too hard. They will particularly like customers whose orders are growing and who don’t ask them to do too much new product development work.
28:15 – Risks facing customers without a good relationship.
If suppliers fear a bad reaction from you if there are problems they will tend to keep them from you until the last minute or hide them completely in the hope you don’t notice. This is counterproductive, in a way, but they don’t like confrontation with an angry customer. Refusing outright to accept something can lead to a breakdown in communications as the Chinese side may feel you’re being unreasonable for not trying to be flexible. Instead, if the problem isn’t too great, see if you can do extra testing to assure the products work as expected or pay a reduced price rather than rejecting a batch out of hand (unless the problems aren’t totally unacceptable, in which case referring the supplier back to your documented specifications and requirements professionally).
31:31 – How to get better results from email communication?
Watch the tone of your emails, as strong language or all-caps can lead to offence.
Be factual and clear. It often helps to avoid missed responses by clearly addressing each point in a numbered list and asking for responses to each.
- Part 1: Good Fit, Sourcing, Vetting, & Backups [Podcast]
- Part 2: Negotiations, Terms, Leverage, & Quality Standards [Podcast]
- Part 3: Project Management & Checking Quality Early [Podcast]
- Part 4: Final Inspections [Podcast]
These resources will also help you understand how to build relationships with suppliers or improve (or end) those that you already have:
- Get help to find a good manufacturer in China with this free eBook
- When a relationship turns sour with a Chinese supplier
- Relationships with Chinese suppliers: be clean!
- Bad relationship with a Chinese supplier: just end it!
And, if all else fails and you need to ditch your current supplier and switch to a new one…
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