Friday, May 27, 2011

Supplier Love

(photo credit: GR Sipe)
I recently sat in a seminar where a guy, who runs a company in the Western world, which “specializes in China sourcing”, was telling the attendees not to make relationships with their suppliers.  I couldn’t believe my ears.

This is the kind of guy who positions himself and his company as “China experts”.  You know the kind of company that comes to a few more Canton fairs than most people.  The kind of company that takes the occasional trip inside of Mainland China to grace a factory or an office with their presence. 

They are China experts;  forget the fact that they cannot string together a complete sentence in Chinese.  Regardless that they’ve never spent any actual time living in the country, only going from 5-start hotel to 5-star hotel while some supplier or perhaps employee feels obligated to arrange every travel whim.

But it wasn’t these obvious low-level facts that show they just use China as their marketing tool, it was …how in today’s day and age, NOT to make relationships with your suppliers.  I’m not sure I’ve heard worse advice.

China is the land of relationships, the land of “who you know” and this yahoo is telling folks not to make relationships with their Chinese suppliers?

Buyers inside of their home countries typically don’t attempt to keep a distance from their vendors, so when dealing overseas, cross-culturally, with a culture that highly exalts the “relationship”, why would you refrain from getting to know your supplier?

This guy’s logic was that prices are changing too rapidly and there are too many “unknown” factors in today’s economic landscape.  Don’t try to lock in to one vendor but keep shucking and jiving between multiple vendors…always switching (which in my opinion, leads to always “reinventing the wheel.”) 

In fairness it is possible I misunderstood him (although I don’t think I did, it was a smaller chat with him to clarify after his speech).  But as soon as he said don’t make relationships, I tuned him out.  That doesn’t work in any country in the world, much less China (where I think the “relationship” was technically invented during one the Dynasties… or was that gunpowder?) 

Especially for those of you in the promo and branded merchandise industries who are reading this…have you ever wondered why it’s hard to get a supplier to give you a prompt and accurate quote?  Have you ever wondered why your quality is inconsistent and you have to work overtime getting a supplier to care?  Most folks in this business treat their suppliers like a “dime a dozen”.  Why should the supplier care?  Why should the supplier make extra effort to assure you are getting quality production?

This guy was saying that lead times from China are longer.  I’m not seeing that.  In fact, we’re banging out quality production in below-average production times.  Why is that? Our factories like us, we communicate with them, we show them respect, we pay on time…it’s not rocket science and in fact it’s the same thing most people do for local vendors, why do overseas vendors deserve any less? 

Suppliers and factories typically disdain the overseas promotional product/ad specialty industry and when they know an item is for that industry, they know it is very possible this is the last order they may be getting from this client.  The clients are always quoting something new or they have an endless product line and it causes them to deal with a bevy of suppliers…typically seeing how much they can muscle down the price.

I say ignore any advice that tells you not to make relationships and strive to solidify a few quality suppliers.  Go for pinpointed accurate hits instead of a scattershot.  Spend time getting to know your vendors, visit them and learn what they can produce. 

This method may call for lowering your margin at the start and not working with a supplier who is the cheapest.  Start giving one supplier some real, repeat business and volume and you may find price breaks and favor. 

Make their manufacturing capabilities a part of your sales.  I know this may sound like off-the-wall advice, but quit offering everything under the sun to your buyers; become more specialized.   

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