When starting an ecommerce business, it’s natural to try and source your products as cheaply as possible. In doing so, you will more than likely find yourself looking at Chinese suppliers on sites like Alibaba and Made in China.
When I first started my online business and sourcing cheap products to sell through Amazon, eBay, and my online store, I had to go through this same process. It was very daunting to begin with, as I was not only concerned about having to invest money. It was also my first time dealing with partners in China, a country that I knew very little about, other than the fact that they excel at manufacturing, win a lot of medals at the Olympics, and their food tastes amazing!
1. Culture – it affects business, too
You may not think much about it to begin with, but there are a number of cultural differences in business practices when you deal with people from other countries. Asian countries in particular have deep-rooted traditions that you need to be mindful of when dealing with potential business partners. What may be acceptable in the United States, might not be acceptable elsewhere, particularly in the Far East where the cultures are drastically different from ours.
It’s natural to do a ton of research into how to set-up a successful online store, source your products, and turn them into profit, but it’s easy to forget about your potential trading partners and considering the cultural differences that may affect you doing business with them. I did precisely that, and ended up making more than a few embarrassing and frustrating mistakes that led to countless headaches and sleepless nights.
In my experience, making a great first impression will not only make your life easier when dealing with the supplier, but it may even result in better pricing for your product than what is listed on the chinese suppliers’s website.
2. The perils of email-only contact
When I first took to selling on Amazon, I discovered that some sites offer you the ability to talk with suppliers directly. I encourage you to take the time to do this as much as possible. Emails are such an impersonal way of dealing with another human being, and some sentiments or turns of phrase may be misunderstood and could even be considered rude. It can be difficult to ‘read’ someone’s intended tone when faced with a sheer wall of text.
I have personally found that a relationship that uses only email communication from the initial contact to the design phase will result in a lot of stress for you. You will constantly have to communicate with them to correct minor issues with your product.
3. Communication – make it personal
I’d suggest taking the time to get personal with your contact and call them via Skype if you think they’d be able to communicate with you. You will find it much easier to convey your needs to them, and in their culture it is considered a lot friendlier. I have found that this allows me to eliminate any possible issues that can occur when dealing in emails alone, and I love chatting with them personally as much as they seem to enjoy talking to me. The Chinese way is often to befriend first, and talk business later. It seems to me that the Chinese are excellent at sniffing out ulterior motives and those with questionable ethics, which is why relationship-building is so important to them.
Admittedly, other sellers I’ve talked to about this sometimes find this approach frustrating. The relationship-building process will slow your original timescale down somewhat, but finding an honest and reliable partner is all about trust in the eyes of the Chinese. They need to know if they can trust you, and to do this, they need to get to know you. The business side of the relationship can only go forward when they are comfortable.
4. “Yes” doesn’t always mean yes
Talking is even more crucial during the initial stages of your relationship. If you’re asking the supplier to make a bespoke product that they have never carried out before, an email can only go so far as to letting them know precisely what it is you need them to make. They’ll say yes regardless, often to avoid the embarrassment of admitting that they’ve never made anything like that before.
However, this is only to save face and may lead to them terminating the working relationship later by using non-committal phrases in future communications. If you ever hear them say “yes, but….” It will usually mean ‘no’, and you should find another way or another chinese supplier. I’ve had to walk away from many suppliers due to them initially saying yes, but never responding after that, or giving me the run-around in a confusing manner.
5. But don’t forget that you are running a business
Don’t let the friendliness of relationship-building beguile you into offering deals and terms you usually wouldn’t accept in a business arrangement. The Chinese have a way of using this to their advantage when negotiating terms. They also employ psychological tactics such as going silent during a Skype call as a way of making you feel as though the conditions aren’t quite good enough for them, pressuring you into offering them more favorable terms. I guess you could say that employing a ‘friendly, but firm’ approach to your dealings will not only get you what you want, but should also earn their respect as a strong businessperson.
6. Be wary of middle-men
One final reason why calling is so important is that you want to make sure you are dealing with the chinese suppliers or manufacturer directly. In some instances, you may work with a middle-man, which adds another communicative layer between you and the supplier. Sure, the address may check out on Google Maps and they might be legitimate, but dealing with a middle-man will only make things even harder for you regarding problem-solving and conveying requests to the real suppliers. This is problematic for a few reasons, such as eating into your profits because they need to employ someone else to deal with you.
7. Don’t lose your cool
Saving face is a little different in China than it is in the West. We liken it to avoiding embarrassment and protecting ourselves from the ridicule of others. In China, the concept goes much deeper than that. In fact, it is involved in almost any situation that could cause a problem for them. Losing your temper, for example, is a social faux pas that will likely cause them to end their dealings with you. Keeping your cool when problems occur will show you to be a superior business person then they perceive the West to be.
8. Keep using titles respectfully
I cannot express how important social standing is in China and in most Asian countries, too. In the West, we can often drop the formalities of using titles once we’ve dealt with someone a few times, or after they’ve offered their first name to us. However, in Chinese culture, titles and positions are extremely important. You should almost always refer to your contacts by their title and then their surname (family name). In not doing so, you will show them disrespect, and this could sour the relationship. If they don’t have a title, use Mr, Mrs, Sir, and Madam instead.
10. Don’t take personal questions too personally
I was quite shocked by some of the questions my partners would ask of me when making initial contact or discussing future needs. They would often ask my age, whether I was married and if I had children, and sometimes about how much money I currently make. These are all very personal questions that I would find inappropriate in Western business dealings, at least initially. These are not odd lines of questioning in Asian countries, but are rather a part of understanding you and your social standing. If you don’t feel comfortable answering them, try to be as non-descriptive as you can, or even lie if you feel you have to, but at least try to give some sort of qualitative answer.
11. It pays to cultivate your connections
Once I had built some great working relationships, I was able to ask my Chinese suppliers to reduce prices on a few products, wait longer for the initial payment, cover the losses due to shipping accidents, and more.
I think that being patient, taking the time to understand their business culture, and befriending my suppliers has made my life as an Amazon seller that much more enjoyable.
12. Don’t Put All Your Eggs in One Basket
Because of the difficulties inherent in importing, (production issues, miscommunication, timing, etc.) issues may arise where you’ll need to rely on more than one contact to fulfill your orders.
Because miscommunication is so rampant, you must diversify your chinese suppliers. That way, if one drops the ball a bit too often, you’ve got a backup that you’ve also been courting to pick up the slack. And when I say “courting,” it’s not an exaggeration. There’s a bit more romance in making a solid business contact in China than you might expect.
We’ll cover this point in a bit more depth below.
13. Know Your Supplier
This isn’t exactly a tip that’s exclusive to business dealings in China, but it’s essential nonetheless. You’ve got to research the people you’re doing business with. For each supplier, you need:
A physical address, to make sure they’re on the level.
Client references, to give you an idea of what to expect.
To find out whether they are an actual manufacturer or just a broker. You may end up paying extra to a middleman.
To check their experience making the product you’re importing. You want somebody who’s done this type of work before.
Product samples, so that you have an idea of the quality of goods you’ll be importing.
14. Build Relationships Before Business Connections
As I alluded to earlier, it’s extremely important to establish a friendship with your Chinese contacts. In Chinese culture, contractual obligations are considered secondary to ethical ones. Repeated social interaction with your chinese suppliers will help you maintain a productive relationship based on trust, mutual benefit, and camaraderie, rather than simple monetary gain.
15. Keep an Eye on the Calendar
The Chinese celebrate a lot of holidays. In fact, sometimes they have weeks off at a time. There were 54 holidays in 2013, and close to that number again in 2014. You need to keep an eye on the days (and weeks) they’ll be relaxing, and adjust ahead of time. That way it won’t cause any delivery delays in your business.
16. If Possible, Go in Person
This obviously won’t be an option for everyone, but it’s highly recommended if you’re doing a substantial amount of business there. Going to visit your manufacturer in person will reinforce the relationship you’re trying to build, and getting to know your Chinese contacts personally will pay big dividends in future business transactions.
17. Pay Close Attention to Etiquette
The Chinese are bound to strict social constructs of hierarchy and custom. Ignoring this fact can cause slightly awkward moments if you’re lucky, and full-on disasters in company relations if you’re not. Some things to look out for:
Who’s the boss? Greet him first.
You’re NOT on a first-name basis. Use titles and last names.
Don’t shake hands too tightly — it’s considered offensive and off-putting. Keep the shakes short and gentle, otherwise they might think you’re purposely trying to intimidate.
Schmooze before getting down to business. Small talk can lead to big things.
Avoid direct eye contact.
No pats on the back, touching the knee, etc. Aside from the handshake at the beginning, just don’t touch your contact in general.
18. Subtlety Conquers All
Directness is considered a sign of immaturity in Chinese culture. Chinese business conversation is all about subtlety. Asking direct questions will usually cause discomfort, and rarely result in getting a direct answer. This goes double for complaints. If you corner your Chinese suppliers about quality issues, they will avoid taking blame, not because they are trying to weasel out of their responsibilities, but because the Chinese view of fault is different.
They see problems as unavoidable facts of life with no direct cause; rather, they are results of a confluence of circumstances, almost entities in and of themselves. You’ve really got to skirt the issue and imply your meaning to Chinese suppliers to get your intended result. To their credit, they are usually very practiced at understanding your underlying intentions.
19. Prompt Payment Will Eliminate Problems Before They Start
This should be another obvious one, but be prompt with your payments. It’s considered part of your moral obligation to your business contacts, and it will lubricate the many gears of the machine before they even begin to get rusty. So set a schedule for payment and stick to it.
20. Set Goals, Not Standards
Another aspect of Chinese culture that can cause a lot of misunderstandings is the idea of perfect service. As mentioned earlier, the Chinese expect their operations to run into snags. Problems come and go: The idea is to get the process to go as smoothly as possible, and take mistakes in stride.
One approach to minimizing the difficulties this will cause you is to align your thought process with theirs. That means setting goals instead of standards. You just can’t have unbreakable rules, because such a thing doesn’t exist in the Chinese mindset. They’re too flexible in their thinking for that. Instead you have to have targets to aim for, making sure not to sweat it when the results aren’t exactly bullseyes.
21. A Little Motivation Will Go a Long Way
The phrase “flattery will get you everywhere” comes to mind. Chinese workers are often only minimally compensated as far as pay is concerned. Words of encouragement or inspiration are surprisingly effective motivators. This is just one more example of how the relationship-building process is so essential to doing business with Chinese suppliers.
You just have to be nice, and give credit where credit is due. And if it’s not due, you might consider looking for something else to compliment. The nicer you are, the more compliant your contacts are likely to be.
Once again, the real secret to success with your Chinese suppliers is being culturally sensitive. Making an effort at understanding the way they do things will go a long way in expanding your business into this market. So be sensitive, subtle, and just generally congenial. You may be surprised at how much of a difference it makes.
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