Managing the relationship withis not easy, the cultural difference, the language issue, the communication problem, China has another social system, different business culture and practice.
Managing the relationship with Chinese suppliers is not that difficult at all, if you can answer one question: How do you define the relationship with Chinese supplier? Do you think your relationship with the supplier is equal? Do you think your order is a blessing or giving to the supplier? Do you often threat the supplier that if they don’t do this or don’t do that, you will change the supplier, as you said there were handful of qualified suppliers lining up for your order?
The relationship should be equal
We recently read a story on the leading international trade forum fobshanghai.com, a Chinese supplier complained how their big buyer (Target) behave arrogantly and how Target was indifferent to the benefit of their suppliers, Target often cancel orders without prior notification, which has caused huge money loss to the supplier as they have already started production. Target doesn’t give any reason and refuse to compensate the supplier for the monetary loss.
The relationship between Target and the supplier is not equal. Target might think that their big order is a blessing to the supplier, so the supplier should do whatever they are asked to do to please Target, fair or not. However, in the end, the supplier refuses to supply to Target any more. Target maybe think they have plenty of backup suppliers to replace that supplier, however, if things go on like this, Target might develop a bad reputation among Chinese suppliers.
Even many small and medium sized buyers are as arrogant as Target. Gradually they will find the relationship with the suppliers become intense and tough. Like human being, organizations like company seldom do self-exam; they always think it is other side’s fault.
Vice versa, it is very common that big suppliers belittle small buyers, we are helping a big Brazilian electric bike importer find Chinese suppliers, out of the vast suppliers we contacted, a few of them are very arrogant, they even don’t have interests to answer the telephone, reply the email and try to learn our inquiry. We also help small and medium sized buyers verify Chinese suppliers, oftentimes we heard the suppliers says they are too busy, too many orders, and they don’t care if they buyers buy from them or not. Our advice to the buyers is “dump those arrogant suppliers”.
We compete as supplier chain, we are partners.
Companies need to cooperate with upstream and downstream companies, suppliers, service providers, distributors, logistics companies, etc. You need the cooperation and support from other partner companies in your supplier chain to improve your competitiveness; otherwise your company will achieve nothing.
As partners, we should try to share market intelligence with suppliers, we help them grow, we give them feedback and suggestion to improve their products, we let them feel we not only buy from them, we see them as partner, we help them grow. If the R&D ability of the factory grow, if they can lower their price and improve the competitiveness of their products, in return, that will help the buyer’s company grow.