As a buyer, you may be in a position of strength in front of a supplier. For example, your orders are quite attractive to them, and you can easily switch to another supplier. You may be tempted to work with a business lawyer to draft a manufacturing contract. That makes sense. And that lawyer will probably prepare a relatively strong contract, too. That makes absolute sense from a lawyer's point of view (their mission is to cover all risks, after all). However, here are a few consequences … [Read more...]
Sourcing From China 101, Part 6: How To Keep Leverage Over Suppliers
Up until now, I have explained how to find a good supplier and what terms to negotiate from the get-go. But this is not enough. Buyers who are new to China often make a mistake: they trust their suppliers too much. How to keep leverage over suppliers? China is a dog-eat-dog environment. You can’t trust a company simply because you have checked and qualified them. You need to structure your deals in such a way that you keep some power over your supplier and do not become financially … [Read more...]