Updated by Neil
There are numerous advantages that trust brings to a business. E-commerce sellers tend to emphasize more on building trust with their customers than their suppliers. This chapter will discuss how you can get better pricing, service quality, and payment terms if you build a good relationship with your supplier.
Don’t Question the Intention of the Supplier from the Outset.
The internet provides many stories of people having bad experiences importing from China. They decide to blame the supplier’s intentions for the mishap bluntly. They don’t take into consideration that there are many intermediaries involved. These complaints are usually the fault of the importer’s poor due-diligence or lack of experience with importing. It can also happen if the QC didn’t do their job correctly. So, you should not get influenced by these stories and approach a supplier with suspicion. It will reflect in your tone, and you will probably sever any chance of building a good working relationship with the supplier from the beginning itself.
Communicate Humbly and Unambiguously
Excellent communication is the key to all great relationships. However, China is stringent when it comes to their culture and customs. When you are importing from China, language and cultural barriers can drastically increase communication problems.
The main root of such issues that importers have is the communication gap. Most Chinese suppliers cannot communicate certain aspects of the transaction clearly in English as they would in Chinese. Some of these aspects are product requirements, expectations, quality standards, etc. The most important one is dispute resolution.
Here’s an example: When a supplier responds with “okay,” they don’t always mean that they have understood what you have articulated.
Try to communicate your requirements through written language. It would be beneficial to have someone in your team or have a partner in China who can communicate your Chinese needs.
Have Realistic Expectations
Sometimes importers tend to believe that China’s factories have similar systems, technology, and working processes as in the US. Specifically, a work environment that consistently produces flawless products. It would help if you kept in mind that the quality of service and product you will receive is directly proportionate to the price you’re willing to pay to the supplier.
Don’t Slack Off on Payments.
Most suppliers in China work on really tight margins. The factories typically have a tight cash flow. Therefore, agreeing to equitable payment terms, and being prompt in payment, will help strengthen your relationship with your supplier.
Play Good Cop/Bad Cop
You have to be careful with this situation. You want to build a good work relationship with your supplier, but you do not wish to become so lenient that they find it acceptable to make mistakes, which may result in costing you thousands of dollars. Without adequate systems and processes in place, factories tend to take shortcuts and make blunders, so you also want to make sure they are frequently monitored. It would be best to have a partner on the ground, like a sourcing company, who plays the bad cop enforcing strict quality standards and negotiating extensively on prices, terms, and contracts. At the same time, you are free to focus on building the supplier relationship.
It is beneficial for your brand’s future if you maintain strong work relationships with your suppliers. It would help if you made it an important strategic priority.
You should have realistic expectations, be clear with communication, and you should not start by questioning the supplier’s intent.
You should help enhance the relationship by not negotiating too hard and by making timely payments. It would help if you expressed the mentality of a win-win situation while simultaneously using the good cop-bad cop strategy.