How to Set Expectations with Your Chinese Manufacturer [Podcast Ep02]
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Inspect what you expect
This is critical. If you expect something to happen, you’re going to have to check it and inspect it at the end of your order cycle.
When the goods are produced, you have to inspect them. Whether it’s physically in the factory or via other means (email, photos, whatever.)
If you expect it, you must inspect it, because you can’t expect what you don’t inspect.
Put it in the purchase order
This is the Golden Rule when sourcing from China:
If it’s not in the purchase order, it doesn’t exist.
We’ve created what we call an Order BOM, which is very much an extended purchase order.
It details every instruction, specification, and requirement that is discussed or needed.
If you expect to get it, then make sure it’s in the purchase order.
Follow this philosophy and you will avoid a lot of complications and potential problems, and remove a lot of risk down the road.
Updating your purchase order
Adding things to the purchase order after it’s been signed off is often acceptable.
It’s critical to have one frame of reference that encompasses all discussions, instructions, and requirements.
Fragmented information through chains of emails, Skype chats, and so on, aren’t effective.
The information is filtered down to different departments in the factories and is not always filtered down correctly.
So, you’re helping yourself, and you’re helping the manufacturer by including all the details in your purchase order.
This will make sure that the right departments get the right information at the right time.
Sign-off your purchase order
Updates should be signed too.
To ensure all parties understand all the instructions, specifications and requirements, you must get the manufacturer to sign back your purchase order.
If they won’t sign it back, it means they most likely don’t agree to some term or some condition.
This is another reason why it’s important to have everything in your purchase order.
Making somebody sign something gives them accountability.
Visual vs. verbal communication
There is nothing more powerful than visual media.
They say a picture’s worth a thousand words, and the expression, “Show me” is much more powerful than, “Tell me”.
Since there are language barriers, it’s easy to misunderstand each other or misinterpret.
It’s very common to get confirmations that things are well understood and very clear, only to find down the road that it was completely misunderstood or misinterpreted.
Fighting this is not going to resolve your problem. It happens.
So the best thing is to ask them to show you through pictures, drawings, or designs – no matter how long it takes – to make sure you can see things very clearly.
Language and terminologies
Because of the language barrier words might have one meaning to us and a different meaning to the Chinese. And terminologies can often be misunderstood as well.
So make sure you are familiar with your acronyms.
If suppliers are using acronyms or abbreviations or short terms, don’t be shy to ask, “Can you explain what that means?”.
Don’t be shy. It’s better than you’re clear and understand it perfectly.
Terminologies and acronyms are used in shipping, quality control, engineering, and in commercial terms.
For example, changing your terms from FOB (Free On Board) to Ex Works is a simple thing that could appear in a purchase order but can completely change the cost dynamic to you.
Ex Works means the product is going to be produced at that price and goods will remain at the factory to be collected by yourself.
FOB means the supplier has included the cost of transport of the goods to the port onto the ship.
So, any time you see an acronym, make sure you understand what it means.
And if you don’t know, Google it, look it up, ask somebody or simply ask the manufacturer.
The language barriers are extended in this regard because of words related to packaging, labeling, gift boxes, pop labels, etc.
There are industry-specific words used for common things, and if you’re unsure or use the incorrect one, people, you’ll often get the incorrect result.
Again, it’s best to ask for more detail and go visual versus verbal if in doubt.
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We’ve put together a handy guide for businesses who want to source their products from china – “China Sourcing for Startups.”
Even if you’ve been at it a while, you might find some useful tips to improve your experience overall.