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7 Must Know Points For Businesses Dealing With China

July 13, 2010 Articles 0 Comment

I recently read an article from a great blog called All Roads Lead to China named “20 Things I Have Learned About China and really enjoyed many of the writer’s points. A number of the points noted in the article are relevant to many of our clients and without understanding or acknowledging many of the points you run the risk of your china sourcing project going astray. Plenty of our clients have learnt this the hard way before coming to us for assistance! The 7 must know points for anyone doing business with or wanting to source or import from China include:

1 – There is no “China”, and there is no “Chinese consumer”.  This is a BIG country full of people and places that range in ways that are rarely appreciated.

China is massive and there are over 1 billion people and thousands and thousands of different suppliers. And while understanding the Chinese Culture, people, language etc will help you succeed, one still should not stereotype all suppliers or people in China under the one mould. Making any assumptions like “that was how my last supplier did it” or “that’s the way they do it in China” are fraught with danger and can be costly if made in the wrong circumstances. Lesson – Never assume anything and deal with each supplier and situation individually.

2 – There is no “Poorly Made in China”.  There is only poorly understood, badly planned, and horribly managed.

We get so annoyed when we hear comments like “all products from China are bad quality”. Most of the time they come from someone who has either had a bad experience with receiving poor quality products from China or from someone who knows someone, who has received poor quality products. I can guarantee that in most cases the reasons for poor quality where not because the products came from China but because of one of the following reasons:

- The supplier was not given the correct specifications and the importer expected the supplier to be a ‘mind reader’. As a result when the products were received they did not match what the importer expected.

- The proper due diligence was not conducted on the supplier in the beginning and the importer was unlucky to find a supplier that was not able to produce the goods to the standard required

- The proper Quality Control measures were not taken to ensure the goods were of the highest quality

3 – Quality control is a hands on process, and that goes double for any platinum ranked supplier on the Alibaba website

See above. Without actually getting someone to inspect the goods at the factory you run the risk of receiving poor quality goods and there is not too much you can do once you have paid the supplier and the goods are in your warehouse in your home country.

4 – China is an unfair playing field for EVERYONE. To win, there has to be a game.

This ‘game’ can only be one when planned for and played correctly. Some choose to play the game alone and some succeed but many fail. Others choose to get support to help play the game and in most cases when done correctly or when the support or advice comes from professionals, the game is nearly always won!

5 – There are no deals of the century

I learned a long time ago that “if it looks too good to be true………it is too good to be true”. In many cases in China if the deal with your potential supply looks too good to be true it usually is. Take the quoted price of your product for example. If the price is significantly lower than you expected it to be or significantly lower than other suppliers of the same product, expect the price to rise sometime in the near future and most likely before you even receive your first order.

6 – The best negotiations are not coercive, but are collaborative

Never go into negotiations with China suppliers with ‘all guns blazing’. Successful negotiating requires both parties to win in some way. The supplier does not win when you screw them down on price that hard that they will not make any margin. If this occurs the supplier will be unlikely to say no for the sake of saving face but they will produce the products at a low quality or use cheaper raw materials to increase their margin to where it should be.

7 – All roads really do lead to China.  Some are one way.  Some are made of dirt.  Some are riddled with potholes… but if China were a smooth 6 lane highway with functioning stoplights, it just wouldn’t be the same.  Strap yourself in, put both hands on the wheel, and enjoy the ride.

The opportunities in China are endless but without the right path or assistance the road can be very rocky and you may not even get to your required destination. Working with China can be a challenge but with the right tools, experience and knowledge it can be just as rewarding for you and your business.

Good luck with your China importing!

Written by Matt Edwards

Related posts:

  1. Doing business and dealing with China – What you need to know!
  2. The Six Steps to successful Quality Control on China Suppliers
  3. Having a presence on the ground in China – Top 5 reasons why is it so important
  4. China Sourcing Support for Local Businesses
  5. What are the costs involved to import from China?

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