Chapter 7 – With Whom Should You Negotiate on Your Supplier’s Side?

Talking to the right or wrong person in your supplier’s hierarchy can be the key for successful or failed negotiations.

Typically your negotiations begin with the sales manager. If technical details need to be worked out the production manager and/or one of the senior engineers will be involved.

Meeting with Decision Makers

These managers however cannot make final decisions without consulting with senior management, when the meeting carries a significant importance. Typically these are meetings where the outcome involves a lot of money. It could be a negotiation to resolve a settlement claim or it might involve a large volume purchase order. I can only advise you to go right to the top decision maker. That means you must talk to the company owner. This can be several people if it is a shareholder owned company. You may need to meet with the chairman of the board, the chief executive, or the president.

It may prove difficult to directly get in touch with the supplier’s decision maker because they are usually shielded by their staff. Knowing the background of your supplier is essential to pinpointing the right person if your supplier has thousands of employees.

It may pay off now if you have visited that supplier before and already know the company hierarchy.

I have discovered on various occasions that decision makers in China go into hiding and cannot be reached by your company when there is a major settlement claim. This might seem strange, but if you do not nail down an appointment with your supplier’s decision maker, you may end up talking to the people that shield him and wasting more time and money.

Have Current Contact Information On Hand

It should not be this way, but believe me, even as a permanent Hong Kong resident it has happened to me. I have arrived at a supplier’s office address only to find out they had moved to a new location several weeks ago. Make sure that you have the updated address from your supplier.

Sometimes, managers may be using up a supply of old business cards and forget to let customers know about their new office location. Maybe it has been a while since you last talked to them. When you call or email to arrange a meeting, they have forgotten you do not know that they moved. This is especially true in cities like Hong Kong or Shanghai where offices frequently move. You need to make sure that you have up to date addresses in your records.

Even more important are the correct cell phone numbers because this is your primary way of contacting the person while you are traveling. In large cities, the traffic conditions can at times be terrible and you will want to inform your business partner if you will not make it on time for an appointment.

A Few Good Travel Tips

A sketch with a Chinese character description of the supplier’s location sometimes works wonders helping your taxi driver find your supplier’s location. You might be able to draw the sketch and have someone at your hotel add the Chinese characters or have the factory email something similar to you.

If your taxi driver still has trouble finding the supplier’s location, you can call the supplier on your cell phone and ask him to give directions to the taxi driver in the local language. This usually does the trick.

You can always ask your supplier to pick you up from the hotel to avoid this problem but it can be inconvenient and time consuming to wait for the factory to send a car. Most Chinese factories are usually glad to send a company car to pick you up. However, companies in Hong Kong or Shanghai may not be willing to provide this service.

When visiting suppliers you will want to make plans that best utilize the available time. This is even necessary if you are visiting suppliers in one of the large Chinese cities like Hong Kong, Shenzhen, Guangzhou, and Shanghai. These cities are so vast that you need a realistic plan if are going to accomplish much.

Getting Around Hong Kong

Most visitors underestimate some time factors that are actually out of their control. I will give you examples for meetings held in Hong Kong.

Hong Kong is a city with a population of approximately 7 million people with an excellent public transportation system. Using the subway (MTR) is advisable and it should not take long for you to become a little bit familiar with it. If you know the closest MTR station to your destination, you still need to know which exit to take out of the station and then the street leading to your supplier’s office.

The public yellow or green minibuses are best left to the locals. It is usually too complicated for visitors to become reasonably acquainted with them during a short stay.

Once you arrive at your supplier’s office building, you need to get to the floor where your supplier’s office is located. Hong Kong is a modern city with many skyscrapers. Even after you locate the floor, it can be a small challenge finding their office. There can be as many as 20 offices on the same floor.

The Trouble at Lunch Time

It can and does take considerable time to find the suppliers’ offices. Special precautions are needed if you have a 2:00 PM meeting in Hong Kong. Plan to arrive at least 15-20 minutes early because all of the elevators will be very crowded. At 2:00PM the general lunch hour ends and everybody is trying to rush back to their offices at the last moment. Get there 15 minutes early and miss the rush.

Knowing these details will help you to make the right plans. For instance, I prefer to arrange my first appointment after lunch at 2:30PM instead of 2:00PM when I am in Hong Kong.

The Chinese love getting out of the office during lunch and really do not want to accept any meetings during that time. They are usually polite enough not to let you know this, but I suggest not trying to schedule meetings between 1:00PM and 2:00PM.

Offices are now staggering work hours, similar to Western societies. Part of the reason is to reduce traffic congestion. This can make it impractical to schedule an appointment before 10:00AM. Unfortunately, any earlier and some of the people you want to attend will not have arrived at work yet.

Lunch hours can start as early as 12:00PM or 12:30PM but that is an exception. As long as you honor the main lunch period between 1:00-2:00PM everything will be fine.

Keep in mind that taxis will also be difficult to catch during these times because some of the returning staff will also use taxis.

Going the Distance in Hong Kong

If you have a meeting in the Tsuen Wan district and your next meeting is supposed to be in Chai Wan, it will take you approximately one hour by taxi to get there. The distances in Hong Kong are considerable and take time to cover, even with their excellent transportation system.

You need to consult a street map in order to avoid scheduling meetings with suppliers that are far apart from each other. My suggestion is that you contact the suppliers you will be meeting with and ask them how much time you may need to get from your hotel to their place (after you have booked it). Next, check with the second supplier that you will meet with to learn how much time you will need to reach them from your first supplier’s office.

If you have meetings with suppliers in the industrial areas of Shatin, Fotan, Kwai Chung, etc., you will need more time to reach your destination from downtown. On your return trip it may not be easy to find a taxi.

Sometimes it does not make much sense to use a taxi in certain areas. For instance in Kwun Tong. Most suppliers’ offices can be reached within a short walking distance and sometimes taxi drivers will even refuse to drive you if your next meeting is just a few blocks away.

I think you get the point already. Knowing the exact locations of your suppliers’ offices allows you to tailor your meeting schedule without including unnecessary taxi rides or walking. Besides the time savings, it will also help to save substantial travel costs.

The same applies to the larger cities in China. However, you have the added complication of communicating with your taxi driver. This will be very difficult if you do not have the address of your supplier’s office in Chinese with you. Your hotel can help you with that and also your supplier can send you a copy of his business card in advance. That will do the trick.

Considering everything that is involved, you may not be able to make more than two meetings before noon and another two in the afternoon. From chapter 6 you know that visitors are expected to be punctual for business meetings and if you heed my advice, you should be able to reach all your business meetings on time.

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