by George Huang
How often should you visit your suppliers? The short answer: Not very often.
Why? Doesn’t visiting your supplier offer you valuable insight and an opportunity to voice any concerns to the supplier face-to-face? While this is often the case, you shouldn’t visit your suppliers in too often because it provides almost no unique value to your bottom line. Let’s look at a few scenarios to illustrate this more clearly:
An overseas buyer and supplier commonly share one of two kinds of relationships.
In the first relationship, the buyer holds the power. The buyer places orders relatively frequently or higher-volume orders for the factory to complete. This results in the factory being somewhat dependent on you as the buyer and willing to do a lot to keep you from going to another supplier. You have even more leverage if the factory doesn’t have the resources to diversify its client list.
If you’re the buyer in this situation, making routine trips to visit your suppliers every few months or more is usually excessive. It’s wise to visit your suppliers once or twice a year, especially those suppliers you work with most frequently. But as a buyer in the position of power, you should be able to trust that your supplier will be receptive to any complaints or feedback you have.
After all, your supplier needs you just as much as – if not more than – you need them. And if you’re finding that you DO NEED to visit a supplier more frequently to force corrective action then there may be a more serious problem with communication. You may be working with a bad supplier and should consider whether or not to take your business elsewhere (see 4 Telltale Signs of a Bad Supplier).
On the flip side of the coin, if you’re a buyer with small orders and do not have a long and established relationship with the factory, then visiting your supplier should still be a somewhat rare occurrence.
How do you know if your orders are not large and frequent enough to warrant more visits to the factory?
One indicator is working through a vendor or trading company. Buyers that work through a trading company generally have order volumes too small to benefit from going factory-direct (see 3 Reasons to Buy Through a Trading Company). It’s also key to consider that trading companies generally deal with a high number of buyers at a time to achieve a thin margin with each order.
A buyer that represents a smaller portion of a supplier’s business will find they have less influence over that supplier. And it doesn’t make much sense for a smaller buyer with little influence to spend the time and money to fly out to visit their supplier on a routine basis – whether in China or elsewhere.
One other consideration to be made for visiting your suppliers is that the tour of the factory not likely going to paint a full and unbiased picture.
The moment you step out of the car and onto the factory grounds, a representative will lead you through a planned route where you will see exactly what the supplier wants you to see. In some cases the entire factory may have prepared for your arrival. If you do mention points of concern to the factory representative, you’ll likely be assured that corrective action will be taken right away, which the factory may or may not follow through with after you leave.
It is important to understand that suppliers in China have an entirely different set of objectives than you do. And unless your plans and suggestions directly affect the factory’s bottom line, your feedback may be going in one ear and out the other. Your supplier will cooperate with you for as long as they think their business relationship with you is worth the trouble. This can be tough for a lot of buyers to hear, but here are a few tips for dealing with a difficult factory.
Overall, visiting your supplier in China is definitely an experience. Visiting can be valuable just to “give face” to the supplier and factory, an important Chinese cultural and societal sign of respect. However, do not expect to gain anything of manufacturing value by visiting for than once or twice a year.
Be sure to check out 5 Tips for Visiting Factories in China to help you get the most out of yours.
Do you have any stories of when visiting your supplier made all the difference? Share them in the comments below!