A fool learns from his own mistakes. The wise man learns from the mistakes of others. Here are 8 truths learned by others much smarter than me, so you don’t have to make the same mistakes.
1. Let Your Money Do The Talking...
A lot of people ask me: “How do you do business in China if you can’t speak their languages?” I tell them: “I do business in USD – everybody speaks that language.” Business is always conducted in the language of the person paying the bills. The intelligent seller will always meet the needs of the person writing the check. This applies whether you’re an Aussie at a market in Thailand, a French speaker buying a car in Spain, or an American placing an order with a factory in China.
2. Cut Out The Middlemen...
In China’s commercial scene, everybody claims to own a factory. The truth is that every factory has lots of trading companies working for them, and all the trading companies have lots of agents working for them. Everyone along the way understandably wants to make a cut of the profits, so your best bet is to always avoid the middlemen and work direct with the factory. Good luck with that...its easier said than done. Hint: asking directly won't help!
3. Keep Them "Honest"...
While it’s important to build relationships, it’s also important to always maintain competitive tension with all your business partners in China. The moment they sense exclusivity, they’ll take you for a ride. Aggressively counter-quoting is not necessary...they'll pick up on subtle cues.
5. Network Intentionally...
When we think of business networking in the West, we think of fancy cocktail receptions, conferences, and general shmoozing. The truth is that while networking in China is very different, being able to build a network of relationships can be a huge benefit to your business. They are very overt about networking, eagerly giving good referrals when in their best interest and sabotaging your efforts if not.
6. The Devil Is In The Details...
Not everything is always as it seems. Many Chinese businesses are great at making things look the same as something else. You will often find that 20 different factories have a product that looks identical. Beware: this does not mean the product is identical. All it means is that they all used the same public mold. The vital components and make-up of the product can be completely different.
7. Follow up and remind...again...and again...
It’s important to constantly remind all your Chinese business partners of their contractual obligations and deadlines. I’ve found in our dealings with Chinese partners that many of them have a different approach to agreements than we do in the West. China has become the world leader in manufacturing due to its excellence in cost efficiency. However, many factories do not place the same emphasis on contracts, agreements, and deadlines. If you do not end up staying on top of your deadlines with your partners in China, it will be your customers, and ultimately your business, that suffers for it.
8. Lucky And Unlucky Have All New Meanings...
It’s no secret that the number 8 is very lucky to the Chinese, both in daily life and in business. But, businesses will pay a big price to be ‘lucky’. When you see a Chinese company that has “888” in their phone number, you can rest assured that this didn’t happen by accident. They paid for it and they knew who to pay. Can you guess what number is considered UNLUCKY. If not, go back and review ALL EIGHT points...
