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How NOT to do business with Chinese suppliers

The case I’d like to talk about today is an iconic example of how NOT to do business with Chinese suppliers. Such situations happen all the time.

So, the client ordered a big batch of kitchenware at a smallish factory in Zhejiang province. It’s a typical family-owned factory, that produces decent quality goods at attractive prices. The client paid the deposit, and it was decided to split the order into 3-4 parts to complete it within half a year.

The first batch was produced according to the plan, but then the factory began to fall behind the schedule. The client assumed that the factory was prioritizing other customers and started pushing the production manager.

Relationships between them quickly became tense and emotional, complicating the situation even further. Eventually both parties reached the point when they didn’t want to work with each other, but still had mutual obligations. At this point the client approached us to fix that situation somehow.

We went through all the money transfers and product shipments and found multiple inconsistencies from both sides. Then we involved the factory director into the negotiations.

After that our inspector went to the factory to check the present situation with the goods. All the finished products were labeled and sent to our warehouse. The client only had to transfer the remaining payment so that the parties could finalize the deal.

Why this situation occurred in the first place?

The delays were mainly caused by the factory overload. This is pretty common for China, especially before New Year holidays. And here the Chinese mindset comes into play. Westerners are used to straight forward answers, whether it is a ‘Yes’ or a ‘No’. On the contrary, direct disagreements are uncommon in China. A negative decision may cause both sides to “lose Face”.

In China they know how to read between the lines, but foreigners often become frustrated. They quickly lose their temper, which only leads to mutual misunderstanding, loss of trust and inevitable conflict. And this is exactly what happened between the client and the Zhejiang factory.

The best practical advice is to be patient, take a deep breath and resolve the situation without direct accusations. This is the best way to do business with the Chinese and this is exactly what we did to fix that problem.

And the best part here is that both parties were eager to cooperate further after all the misunderstanding was gone.

Just contact us in case of any complications with Chinese suppliers. We will provide all the necessary assistance.

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