Chapter 2 – Why are Regular Business Trips to China Necessary?

Regular business trips to China are essential to maintaining a good relationship with existing suppliers and building new ones. The Chinese culture favors frequent personal contact with their overseas trading partners and meetings at their office or factory is one preferred method. Therefore, you are best advised to prepare yourself in order to make a favorable showing. Poor preparations can leave a negative impression about how your company conducts business.

That is particularly true if you consider how far away you are from your home office. If you forgot something important for your China meetings it can render your whole trip worthless. Considering the amount of money and time you have to invest getting there, you should agree that this is not an acceptable option.

I have made these trips many times and have learned considerably from experience. My intention is to share all of the relevant details with you so you can avoid making mistakes I have learned from my more than 25 years career.

Information Needed by Small to Medium Sized Businesses

This eBook assumes your company to be a small or medium size importer with an established customer base in your home country or a company interested in starting their own importing business but lacking the necessary experience to do so.

Thorough trip preparations will make your business trip to China more successful and will help reduce your travel expenses. This eBook provides you with the knowledge and tips to achieve those objectives.

Business trips to China and the associated negotiations with your Chinese business partners will have different goals and therefore need different types of preparation.

I will focus on the following 4 main goals that typical business travelers to China have on their agenda:

Goal 1 – Visiting a new factory for the first detailed evaluation

These could be suppliers or factories you have previously met during one of the Chinese Trade Fairs or suppliers/factories and have been in contact with from your home country. Naturally, you want to spend most of your time evaluating these suppliers/factories to determine if they can comply with your requirements for your imported goods.

Goal 2 – Visiting a factory to discuss a new large volume project

The goal of this visit assumes a certain familiarity with the factory. Without knowledge of the factory, you would not want to place a large volume order with all the inherent risks involved. Preparations will mostly focus on the details of your project.

It is not advisable to entrust a new supplier/factory with an order without first conducting an evaluation, either yourself or by an Importing Consultant like our company: If you want to avoid unpleasant surprises, do not blindly place an order.

Goal 3 – Visiting a factory where you are having major problems with the quality and/or delivery schedule

The first thing you must do is find out what caused the problems. The reasons provided by the supplier/factory may not be the whole reason and possibly even involves a cover-up. These problems will cost you money if they are not solved quickly. You will need all of your investigative skills to find the root cause. Here it is a good idea to bring your own interpreter because you may need to talk to the supplier’s or factory’s engineers directly to obtain important information and directly advise the people involved.

Goal 4 – Detailed negotiates of conditions and prices for new large volume orders

Similar to goal 2, here the preparations will mostly focus on the details of your project. Again, you have already visited this supplier/factory, performed a thorough evaluation, and concluded they have the background, experience, and capability to deliver what you want.

The difference with this visit is that you are now prepared to place the order and want to take advantage of your last opportunity to negotiate the price and terms. When you have large volume orders in your hand, you have stronger bargaining power towards your supplier/factory because larger orders also allow the suppliers/factories to save costs by buying raw material and components at special bulk prices.

Nowadays, I would say it is the only chance to negotiate better conditions and prices because increasing costs are forcing the factories to order raw material and components only after they have received your L/C. If it is really a larger than average volume order, your supplier/factory will get better prices and conditions and they may be able to pass some of the savings along to you. We will keep these four goals in mind as we progress through the rest of the book.

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