How to select suppliers in China?
Foreign buyer Mike asked:
“I have received many emails from the suppliers I met at the show however I am not ready to deal with them until I gain more knowledge.
Can you please advise the best way to respond to their emails at this stage? I have a lot to learn about their culture, and I don’t want to come across as rude or disrespectful?
Dr. Neale O’Connor from Australia, after investigating 1000 purchasers, summarized this operation: as a buyer, if you are in the initial stage of studying Chinese suppliers, what you do basically depends on what type of products you want to purchase.
For example, is your product customized? Is this a new design or a small adjustment design? After thinking it over, try the following steps.
Stage 1 – Series of initial introductions
Get clarity on the type of product that you wish to order
Usually, suppliers will be very interested in receiving your email reply. What you need to do is to thank the supplier’s email and tell them that you do not need the supplier’s cooperation at present, and they will understand. Some of these vendors continue to send you monthly (and sometimes weekly) emails about new products. It doesn’t matter. This is their routine email marketing, without any special cultural background.
At this stage, the final thing is to thank them. These words are specific enough. In addition, at this stage, you may want to ask the other party some questions about product specifications, but it is better to wait until you figure out the products you need to order.
Stage 2 – Make a supplier short list
Then, when you are more clear about the goods you want to purchase, or when you are ready to purchase goods due to time problems, you may want to communicate with 20 suppliers: they are in the same position as you, or they have produced the products you need, excluding price factors. The sources of these suppliers may include those met at the exhibition and those found through Internet search.
The goal of this phase is to create a candidate list of 5-10 suppliers. Which suppliers can be included in the list? In addition to price factors, the following issues need to be considered:
1. Responsiveness and demonstrated an understanding of your needs as per the product specifications.
2. Questions about order and delivery.
Minimum order quantity?
Lead time?
3. Location — close to airport or major city for you to visit (i.e. less than 1.5 hours taxi from major city center — means 3 hours max to supplier and back)
4. Location of specific and Key raw material / component suppliers, which you also might need to visit especially if you have a customized product whose performance depends heavily on a specific component.
Stage 3 – Factory Visit
Once you have identified a short list of suppliers and a specific product is in your mind, you may want to ask them more specific questions.
It is important to visit the factory on the spot. If you really don’t have time to do so, please do at least the following four things:
1. Due diligence questions
Conduct basic credit review on suppliers – you can find a lawyer with less than $200 in online credit institutions to do this (for example, http://www.Chinaeyes.com This website is cheaper).
2. Years in the business
3. Previous products/samples that they have produced
4. Do they have a reference (another customer) whom you could contact — possibly a customer in another country?
Any question you ask – the same for each supplier, and then you can compare their answers.
