by Clara Muriel Ruano in ‘Foreign Entrepreneurs in China blog’
After a couple of years in China, I have managed to meet a good number of entrepreneurs and business people sourcing goods from Chinese suppliers.
I have also read plenty of posts from fellow bloggers providing negotiation tips and often narrating horror stories (and I have also shared tips and written horror stories myself!)
Last week I was chatting with somebody who is heading a representative office that helps source a number of goods to it’s headquarter. I soon realized this person was a satisfied buyer who surely had lots of horror stories to tell but was far from bitter about suppliers. That made me think about the people I have met that could be (quite simplistically) described as “happy buyers”. They all have some common characteristics.
What I am about to write may not hold true for everybody, but I have come to realize that the “happy buyers” I have met share the following approach to business:
1. “Happy Buyers” are into building long term relationships
a) They happen to be genuinely looking for “win-win” situations because they want (and more importantly need) long term suppliers.
b) They focus on strengthening the relationship because they are aware that not having big purchase orders they need to leverage on the relationship - and with that objective in mind, they make sure that they visit their suppliers very often, because in China things do not get done by fax.
2. “Happy Buyers” approach price negotiation very professionally
a) They understand their suppliers’ cost structure (how much goes into labor, materials cost), and
b) They track commodity prices that are involved in their products. So, when a supplier comes back saying “I need to increase the price” they can:
a) Assess if there is a valid reason behind the request
b) Estimate what would be the fair cost impact
c) Objectively decide if they should give in (in future orders… not for this one!)
All of which will positively help the long term relationship and both sides satisfaction.
And, of course, there are some other very basic things in common like having the right tools in places (contracts, good quality control), but for the purpose of this post I wanted to focus on the two I have mentioned above.
I know there will still be a lot of bad experiences out there (even when you have ticked all the above/ and even suffered by those same people I talk about) but I am just describing what satisfied buyers that I have met have in common.
So, are you a “Happy Buyer”? What is your secret?
Clara Muriel Ruano has lived and worked in a number of Asia Pacific economies since 2002, before basing herself in China in 2008. Her Foreign Entrepreneurs in China blog is designed for entrepreneurs and small and medium sized companies with an interest in practical, realistic hints, tips and lessons learned from success and failure in the China market.