Recently, I began a business specializing in toys and games. I had some great ideas on branding and product creation, but I had no idea where to start looking for someone to make my products. I can’t get anybody to play my games or be entertained by my toys if I have none, right? So I began some research through podcasts, blogs, and YouTube videos; focusing on small business owners who shared their journey from beginning to present. It is that I trust them more than a well-known magazine or website… I’m not a big fan of people faking information for financial gain. I learned many ways I could begin manufacturing my products and after weeks of negotiations, guess where I found a supplier? China!
The negotiation process is pretty straight forward: they offer you a price, you haggle because the price is too high, they say that’s their best offer, you say you’re walking away from the deal, then they come down on the price. Only, that’s the American way to negotiate. The one thing American business owners fail to realize is that Chinese culture is not the same as American culture. Working with a Chinese manufacturer is much like courting someone in a dating relationship. You start off with the preliminary “hello” and exchange of basic information. Later on you share information about yourself, but you also ask the other person many questions and learn more about their personality, interests, and aspirations. If things go well then you try a first date, and another, and so on, hopefully building a deep and lasting bond. Perhaps this even leads to marriage (like the dating sites advertise). The Chinese need to be nurtured in a similar way because they place much of their business risk in relationships, not price.
Claria Muriel Ruano writes a blog called Foreign Entrepreneurs in China. She earned a bachelor’s degree in Economics in Spain and an MBA in Europe and works in the export department for her company. She has 12 years’ experience in the field, where several years were spent in China. In her blog, there was an article posted called, “36 Tips on How to Deal or Negotiate with your Chinese Suppliers”, and I’d like to focus on two of those 36 tips. Number 14 states, “The best way to do business in China is face-to-face. Technology is great, but I do not think it is the way Chinese people are wired to work.” While going to China and meeting with a supplier is not always going to be an option, this illustrates how important personal relationships are to Chinese business partners. Number 36 reads, “… Your Chinese supplier sees the contract as the ‘beginning’ of the relationship.” This tip definitively informs the reader that business dealings are thought of as relationships, so treat your supplier in the same way you would treat those in your personal relationships.
In my experience so far, in dealing with Chinese suppliers, courtesy and respect are a must in every individual form of communication. A compliment, apology, formal salutation, thank you, or anything of that nature needs to be included in your communication… it will definitely be in theirs! The more active you are in getting to know your point of contact, the more willing they will be to just discount the price without you even having to ask. Here in America, when we are trying to sell something, we usually have two prices: “the price” and “the friend/family price.” If you treat your supplier like they are a real human being, and not like a computer haggling machine, you will find yourself getting the “friend price” more often than not.
It all boils down to respect and integrity. We’ve all heard that Americans have a bad reputation across the globe. This is because our culture is vastly different than many other cultures in the world. We aren’t rude, we’re just American. Be conscious of this when dealing with Chinese suppliers, respect their culture, and your worries about dealing with Chinese suppliers may be reduced drastically!
Ruano, Clara Muriel. “36 Tips on How to Deal or Negotiate you’re your Chinese Suppliers.” ForeignEntrepreneursInChina, 11 Feb. 2011, http://www.foreignentrepreneursinchina.com/2011/02/36-tips-on-how-to-deal-or-negotiate-with-your-chinese-suppliers-2/. Accessed 15 Feb. 2017.
Phillip Wiseman is a Management Trainee at one of the largest automotive retailers in the world and earned that position due to his undergraduate studies in Management at the University of North Carolina at Chapel Hill. He is also currently enrolled in the Master of Entrepreneurship Degree Program at Western Carolina University. Webmasters and other article publishers are hereby granted article reproduction permission as long as this article in its entirety, author’s information, and any links remain intact. Copyright 2016 by Phillip Wiseman. http://www.vehiconomy.com