By Tony Kumar
E-commerce for a lot of us has been totally life changing and hopefully never taken for granted. But at times the human element totally goes missing and disappears in the e-commerce space. We sometimes get so immersed in our little E-com businesses and start thinking this is how business is done in the real world. But on the other side of that computer/laptop/phone is also a human being just like us hence making those human connections/relationships can and should never be underestimated.
Always a good idea NOT to judge a book by its cover.
In the long run authenticity does seem to always play itself out, be it in any business space or industry. Often what we see from the outside, will quite likely make us perceive that would be the same from the inside. But as they say, never judge a book by its cover.
A supplier with an amazing and well-made Alibaba Page & Website, can highly influence our decision in wanting to do business with that particular supplier. An Alibaba page with great pictures, product descriptions, and gold status will at the very least wake up our curiosity buds and push us into looking what exactly that supplier has to offer.
Also, when we meet suppliers at their exhibition booths and see all their products displayed there, it helps us see what quality level their products are at. But at times the samples displayed at these exhibitions by some suppliers are of a higher quality than those of their actual manufactured products.
The look and quality of the samples displayed at a booth are also significantly enhanced by all the lighting and decoration around the supplier’s booth. A few also still continue to adopt the old school tactic of using an attractive sales person or models (both local and foreign) in getting buyers attention to their booths. We can compare it somewhat to super hero movies, which look amazing on screen and often take our breath away. But the process in making those super hero movies is often not very glamorous and there are a lot of trials and errors involved to arrive to the finished product on screen.
So similarly, the process in making any product is often filled with its own challenges and realities. It’s always a good idea to see what’s going on the other side of the fence in order to have a better understanding and a more wholesome perspective of things. No harm in learning how the product got made, what are the processes involved, and more importantly is that supplier someone you could potentially do long term big business with or not. Especially if you are in it for the long run and actually wish to build a quality business/brand.
No doubt flying half way across the world is not always going to be possible both in terms of money and the time/energy needed. Though these efforts initially can definitely be well worth it and can be a good long-term investment from your side.
Ideally you yourself making these trips to visit your suppliers is better but going forward you can always find some reliable companies & people who can help you with the process of auditing new suppliers, paying visits to your regular suppliers and maintaining that one on one touch with suppliers. Basically, having boots on the ground at all times will keep most suppliers on their toes when doing business with you.
Below are some of the more specific benefits of visiting your suppliers manufacturing premises
1.) To find out if the supplier is an actual Manufacturer or Trading Company
First things first, a visit to any supplier will let you know if you are dealing with an actual manufacturer or a trading company. Once you have that out of the way then one can simply focus on the main tasks at hand. In the Chinese business culture, it’s still very common and normal for suppliers to say they are manufacturing the product even if they are not. Many of these suppliers who are essentially trading companies still believe (though maybe rightly so) that they will lose a lot of business if they openly show themselves as a trading company.
Now of course there is nothing wrong in working with a trading company, especially if they have managed to meet your target prices, quality requirements and been professional throughout the process. So through your visit you will have established if the supplier is a manufacturer or trading company.
If they are a trading company, your first impression about this company would not be very good as you would naturally feel this company might not be very trustworthy to work in the future, as even before the first deal they have hidden their real identity. But really then it’s up to you as a buyer to decide if you wish to continue going forward in doing business with this company or not. As sometimes these trading companies are quite strong financially hence can provide quite competitive pricing without compromising on the quality and overall service.
2.) Get an understanding of the manufacturing process of a Product(s)
One of the first things you will likely notice during your visit to a supplier is you get to see if your supplier is actually manufacturing the product you need and which process is being outsourced to other manufacturers.
You need to see if the manufacturer has their own mold making machines, injection mold machines, and printing machines. Also, if a supplier has all these machines and infrastructure one can safely assume that this supplier is quite strong financially and this could help you get better payment terms from them also in the future.
Nearly all products need a mold made and some sort of printing done on them. This will help you know how much control can your Primary Manufacturer actually have over the products quality. You can see which process is being done in house and which process is outsourced to another supplier.
Why is this important? Well these are some of the factors which can highly influence the products cost, how much quality control a supplier has over that product, maintaining consistency in quality, delivery times, and after sales service.
If your product requires significant customization then working with a supplier who has the capability & technology in their own manufacturing premises is most ideal. Basically, the process of product development becomes easier and faster and less things getting intercommunicated because fewer manufacturers will be involved in the whole process.
Though of course you would also need to have confidence in them and make sure your current supplier is actually capable of doing all this in their own factory without compromising on the quality of the product and delivery times. A good manufacturer will know what are their strengths and which manufacturing processes to outsource, as at times the products quality can be significantly enhanced if some part of the production process is outsourced to a nearby manufacturer who is specializing in that manufacturing process. Also if you have found a manufacturer who is able to make the complete product in their own factory, these suppliers are able to give you very good pricing as they are not involving other suppliers in the manufacturing process and the production time too can be shorter from these suppliers.
3.) Relationship building exercise and making that Human Connection
Building Relationship and trust with your supplier (Called Guanxi in Chinese business culture). Even though you may not speak the language and the supplier’s sales team might not be fluent in speaking English, the whole process simply becomes more Human and real. Even sharing a meal, drink (one doesn’t have to) or Chinese tea can not only make you feel more comfortable in doing business with that supplier but many suppliers themselves would feel the same way and could try supporting you in many ways in the future.
As a buyer it will also give you some confidence to know if the supplier you will be dealing with is someone you can feel comfortable, enjoy and trust to do potential big business for the future.
But yes, this is just one of the tools to make your business smoother and in scaling up, and it’s best to always to be alert and professional during this time and even for the future. One should not let these things cloud your decision-making ability and practicality. Some suppliers even try to take advantage of these situations by over promising and then later under delivering, especially after drinking some Chinese Alcohol (Baijiu) some of which have up to a 52% alcohol level (Not recommended for you to drink!) though each to his own of course.
4.) Opportunity to Negotiate Better pricing and payment terms
You can negotiate better prices and payment terms when you visit your suppliers personally. Most if not all suppliers see this as a very positive intent from a buyer and hence do make an effort in giving you the best pricing and terms possible from their side. Most of the times (if not every time) the cost and time you spent in visiting your supplier will be covered by the supplier giving you more favorable pricing for your product and payment terms.
There is of course no guarantee for this but if you go in with a positive attitude and intentions, then more often than not the other person will pick up those vibes and try supporting in return to the best of their capabilities. So, for example if you were dealing with your supplier on 30% + 70% payment terms, then potentially after your visit you could get payment terms like 10% or 15% deposit and the balance after the inspection and before the shipment. And once you do business with a particular supplier for a few years they even can support you by giving you some credit, where you maybe give a deposit of 10% and pay the balance after 60 to 120 days after the shipment.
Now these kinds of payment terms are naturally influenced by a number of factors, such as your own reputation, order quantities, your financial strength, the supplier’s financial strength and their company policies. But overall it can be a win-win situation for both parties in the long run.
5.) Re-emphasize on the importance of quality, quality improvements and your projects given more importance
By understanding how your product is actually manufactured and how much work/ labor goes into making a product, it could help you as a buyer to sell your product more confidently, market it more properly and increase your sales.
So, during your visit to your manufacturer you can see how exactly your product is being made and how you could possibly enhance the quality of a product by you giving some of your own suggestions to the manufacturer.
Also, if you have been seeing some bad reviews of an existing product on Amazon and it’s a product you wish to sell yourself now, then during a visit to the manufacturer you can possibly come up with solution to those quality issues with the manufactures engineering team.
In addition, with you being physically present there, the supplier will take you much more seriously and genuinely try to help by giving more of their time and resources on your project.
6.) A great chance to be inspired and come up with new product ideas & solutions
Often times the sales person you may be dealing with would be handling several other accounts hence they may not have the time and energy in offering you their other products over the internet hence a visit could potentially open new doors for your business.
So, by visiting a supplier it gives you an opportunity to see what other products your supplier is making and this in turn could help you come up with new product ideas for your own product line or for even come up with a customized product idea.
Just by being in the sample/show room of the supplier can greatly inspire you to come up with ideas! It could also help you come up with some bundling product ideas for an existing product you are selling.
Not only that but you can also understand if the manufacturer is actually specializing in the specific product category you are wishing to expand into and working with a manufacturer matching your own future product goals/categories is always ideal.
It’s also best not to show too many emotions (excitement) initially even if you feel the manufacturer could be a very good one for you in the future and it’s always better to keep your cards close to your chest. This will help you stay more level headed during your visit and also give you the clarity and presence of mind to observe other things. When physically there at a manufacturer’s premises do make the effort to also see if the supplier has all the valid certifications for your product and if they are displaying a competitor’s products openly. If they are, then you can quite safely assume that they might do the same for your products in the future. All these things can really guide you in your decision-making process and know if this is a supplier you would want to do business in the long run or not.
7.) Visit your supplier’s competitors and other nearby manufacturers and markets
By visiting your manufacturer also gives you an opportunity to visit other nearby suppliers for you to compare the quality and pricing of your product.
Normally in China a specific products manufacturer can be situated in a specific city or province. So, these would not have to be very time consuming and expensive trips. By visiting other nearby suppliers, you may get some other product ideas from them, understand why is there a price difference between suppliers, learn how different manufacturers work for the same product.
Also, by doing this you keep all the manufacturers on their toes as they will see you are aware of their competitors, the current china market price of their products and you will basically have a deeper understanding of the whole situation.
This in the long run will help you talk more professionally to your suppliers by you having a deeper understanding about product manufacturing and the supply chain in general. You will learn to eventually ask your suppliers better questions and filter out suppliers which don’t meet your requirements and criteria. Thus, in the long run this could potentially help you attract more professional and suitable suppliers to work with as suppliers themselves want to work with knowledgeable and experienced buyers. On top of this you can visit local markets in China such as the Yiwu Market where you can get a lot of new product ideas and meet a lot of the manufacturers themselves.
8.) Physically experience the suppliers working culture and conditions
You get to see how is the business module set up by your supplier, are they organized, clean, how are the laborer’s treated, are working conditions safe, and understand their company’s culture and happiness levels.
Many buyers have their own values and internal compass and wish to work with people who share the same values and principles. Also, maybe your current product brand is leaning towards being eco/environmentally friendly and hence this automatically becomes very important to you that the suppliers you are dealing with have ethical manufacturing processes and working conditions.
9.) Gives you leverage on you insisting for faster production & delivery times.
Being present at your suppliers manufacturing premises also gives you an opportunity and some leverage for you to emphasize on the importance of not having too long or delayed delivery times for your orders.
Some suppliers have to be reminded on a constant basis on the importance of time and your goods being shipped out on time. One sometimes needs to explain them in laymen terms how crucial this aspect is for your business and brand to actually grow. You need to let the supplier know that they too will be the winner as they will be getting quicker and potentially larger orders from you if they manage to always ship out your goods on the agreed time.
Normally an average delivery time for a supplier after they receive a deposit from you is 30 days but once you personally meet your suppliers this could go down to 25 to even 20 days. This could give you a huge advantage over the competition and also you not having to run out of stock. So most suppliers will see and treat you as a serious buyer when they see you making the time, effort, money spent on coming to meet them personally and hence more often than not will give more priority and emphasis on your current and future projects with them.
So basically, once you are at a suppliers manufacturing premises, you will more often than not get a sense of the potential business you would want and can do with that particular supplier. Often, it’s the undercurrent “vibes” you will get from everything surrounding you and what you experience to help you know if this is a supplier you can potentially do some long-term big business with.
It feels so much better and safer to have met the company whom you could be sending payments to in the several hundreds of thousands in the near future. Initially the whole trip could be a little overwhelming, especially when visiting a number of suppliers or markets. But you of course don’t have to make any decisions on the spot and it’s always best to enjoy & learn during the whole experience. Not to mention the potential long-term relationships and contacts you will make during the trip. Once back home you can sleep on the whole thing, evaluate things with your team and then make the best decisions for your business.
The views, opinions and images in this article are purely the author’s own. Global Sources does not own responsibility for what is presented in the article.
Tony Kumar started KaizenMedia in January 2018 after living and working in Guangzhou, China since 2011. Extensive traveling all over China to hundreds of factories, attending exhibitions and dealing with clients from all over the world from various industries has taught Tony many of the nuances of Sourcing in China and help me build some strong relationships with the local businesses here. In the past two years, Tony has dived deep into the ecommerce world and how to source for Amazon/E-Com Sellers. The passion to not live a regular 9 to 5 life and help others do the same is what keeps Tony motivated every day. Tony can be reached via email@example.com.