The Safety Net
Recently, I received a phone call from a man who had tried to purchase a product from China on his own. He had made contact with a supplier through an online directory, but it didn’t work out.
What happened? This man had contacted an unknown entity in a country with a completely different culture, thousands of miles away. He may not have known if he was talking with a trading company, a factory, or an individual posing as either. Whatever promises were made weren’t lived up to. This wasn’t the first time I’ve heard a story like this, and it won’t be the last.
To succeed in business in China requires guanxi (pronounced “gwanshee”); we call it relationships. In China, who you know and how well you know them is critical. Without this, the outcome is a roll of the dice. You don’t know if the factory will walk if there’s a problem, or if they will take care of the issue.
Several years after I started buying from China, the company I worked for received a $100,000.00 shipment of gage pins – that were all rusted. (A gage pin is a cylindrical steel pin, precision ground to close tolerances). As you might imagine, we were nervous; would the factory wash their hands of the matter, or would they take care of us? In the end the matter was resolved; we were compensated for the shipment, the problem that caused the rust was resolved, and we moved forward. In the years prior, we had taken many trips to China and had built up a relationship with the parties involved. They knew who we were and that we were serious about future business. In short, we had established guanxi with them. I don’t want to think of what might have happened without this.
Guanxi doesn’t guarantee that there won’t be problems, but it does provide a safety net in case one comes up. Jumping into a Chinese business venture without one isn’t wise.
We work with companies in China that we’ve known for years. Our guanxi in China reduces the risk of dealing with the wrong company up front, and, should a problem ensue, provides an insurance policy to back you up.
To read more on guanxi, see:
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Flash drives are a great promotional item; they can be made with your logo in production run quantities.
For a free sample or a quote, please email me. I can send you a free sample of a 2 gigabyte flash drive; just reply to this newsletter and let me know where you’d like it sent.
Those Long Holidays…
The Chinese have three major holidays where manufacturing companies shut down for a week or more. The king of holidays is their Chinese New Year, which runs from late January to mid-February. They also shut down for the first week of May, and, October 1 – 7 for their fall holiday.
Please keep the upcoming October holiday in mind as factories will be closed during this time.
The Exchange Rate
Yuan to the dollar, as of today: 6.74 to 1
Rate when the Yuan was depegged from the dollar on June 19 of this year: 6.82 to 1
Change: .08 (1.1%)
Since 1991, Global Trade Specialists, Inc. has helped companies of all sizes get their products made in China from manufacturers of quality products. We are an American company who works with three trading groups in China with immediate access to thousands of manufacturing companies. We source most products made from metal, plastic, wood, stone, glass or textiles; from prototype to production. Many of our customers are first time importers; we walk you through the entire process.
Read testimonials from some of our customers.
Email us for a free quote.