Even with my experience, my supplier duped me... [Podcast ep.037]

 

Even with my experience, my supplier duped me... [Podcast ep.037] 

 

Click above to listen, and scroll below to read a full transcript.

This episode is packed with useful advice on getting to the bottom of production delays, using wechat effectively to communicate with suppliers, and is a real story from the ground in China. We deal with problems, how they get resolved, and key take-aways.

In this episode we cover;

• How existing relationships can go bad
• The importance of speed of action
• Using wechat effectively to nurture relationships with your suppliers
• How to get your customers on your side when things go south!

🎥   Watch it on Youtube now.  

 

Simple. Free. Advice. No Obligations. 

Listen to all our podcast episodes here.

He Was Forced To Go To China To Save His Business But Now He's Launching His Own Brand | Ep. 020

How E-Commerce And Digitization Are Changing Sourcing | Ep. 016

See David featured in...

• CNBC Made it, alongside titans like Shark Tank's Barbara Corcoran and Serial Entrepreneur Gary Vaynerchuk

• Business Insiders David Hoffmann with Gary Vaynerchuk and other successful leaders on how to respond when employees royally mess up.

Podcast Transcript 

GlobalTQM 0:01
Welcome to the Globaltqm.com podcast where we teach ecommerce business owners how to source the best products from China, negotiate with Chinese manufacturers, navigate Chinese business culture and grow your business to seven figures and beyond. David Hoffman is the founder and CEO of global tqm.com, your team on the ground in China.

David 0:21
Hey, guys, welcome back to this week's podcast of GlobalTQM, where you get to meet your team, your office on the ground in China. So it's been a while since I've done one of these for you. But this one is a really interesting one. So I couldn't wait to get it out there. And I've prepared some slides. So if you're watching this, you can follow along. If you're listening to this, just hear what I've got to say.

So as most of you will know, I've been in China and doing business in China for a very long time I deal with very many factories. And you would think that I've got it down, Pat. But it turns out, I simply don't.

And what I mean by that is anything can go wrong. And this is really an important lesson because it doesn't matter how much experience you have, or how many things you do right?

Things can go wrong.

So let me tell you the story of my rings. Now, there's a few things you should know firstly, about the story. The key thing is this the first few let me start again, there are some things you should know about this factory I was dealing with.

Firstly, I knew he was a middleman, I 100% knew as a middleman. And I made the choice and decision that that was absolutely fine. I had no problem with it.

Why? Because I'd visited the factory in person, I met the factory staff. And most importantly, I'd actually done business with this guy before.

So I kind of felt with all those things, why change a winning formula, we had been okay, in the past, everything's fairly transparent, I'm at the factory, I can see what they can do. So I didn't really have any alarm bells to or cause to worry.

And there was a track record. And of course, don't forget, I've got a full team of staff in China. So I felt if things go wrong, it's pretty easy to deal with. So having said all of that, what could go wrong.

So let me tell you what actually happened.

So firstly, I got a new order, a very excitedly rushed in to place the order to the sky. I won't mention his name or the product, it's really irrelevant to this story. But I placed this new order, it was a really rush order. And he could get production completed in 10 days, which I was super excited about.

And I went and placed the order and 100% of the production done in 10 days, he sent us pictures from the factory, and I was super happy and super excited. And really the last step was to do the actual printing on this product, which is the separate process after it's finished being produced.

And in fact, when things started getting weird, he said it would take one day to produce and finish the printing. And after one day, I'm messaging him now I use WeChat for all my communications.

And the tip is I love to chat to my manufacturers directly on WeChat and try get an update, get photos on the fly make decisions immediately as we go. I find it's a lot quicker and faster sometimes for me than actually going through my team at the office because they get the message they asked me then I reply.

So I'm very engaged. And I highly recommend you all get very engaged with your manufacturers and build that direct relationship through WeChat. It's very easy now with video with messaging. You can mark things up. So anyway, I had this 10 I this messaging going up and down. I actually had Jenny from my office as a group member on this chat so she can always be abreast of what's happening and help me if there's something difficult to do.

And it's actually quite easy. Now even if I type in Chinese just click translate and translate in line. You can write in English they can translate in line. So communication is just become super easy. Anyway, one day becomes two days becomes three days and of course every time I'm asking can you send me pictures? How's it printing going? I'd like to see how it is can you send some of the samples to Genie at the office to check for us excuse after excuse for coming day after day after day.

And that you know they felt up reasonable excuses. Factory didn't have time to clean the products first. The machine broke down there was a problem with the printing form. They're remaking it it's going to cost take them an extra day. And I'm sure you can understand how quickly this goes one day became two days became three days became four days became five days.

And now I'm starting to get really really frustrated because I need these orders. I've got customers back up waiting for this product. So what did I do? I just kept on going and we checked saying what's happening? I need the products, I need the printing what's going on? And that's when they started getting very weird. I started getting these strange comments and promises that, no, I've had to find another printing factory to do it for you.

So I've moved the rings to another factory, and they're going to do it because the old factory, the boss wouldn't do it anymore. And he, I mean, just all kinds of excuses I didn't want to get into. And I kind of because of our previous working relationship, I've gave him the benefit of the doubt. A lot. Okay, look, he's always done good by me. Let's just play this through, go to the factories takes time.

And as you can imagine, that became another five days and just endless up and down. Then eventually, I said, Look, I can't communicate with this guy anymore. He's just driving me mad. And I started getting my office, Jenny specifically to start talking to him and communicating with him daily by phone.

And the same promises the same things by phone. But she started noticing something was really, really weird about what was going on. So after a few more promises, said, No, don't worry, I'm going to be sending the pictures in two days time. I'm personally going to the factory, and I'll be supervising the printing. Of course, now, we've believed him again. And again.

So eventually, I think we were probably just nearly three weeks into this up and down with messing around wasting time, which really is a lot on me, because I just felt each time that excuses seem reasonable. The change of factory can happen. And there was a track record, right? Remember, there's a track record isn't a new supplier.

So I just went with the flow. And then eventually, something weird started happening, he stopped replying to messages. And I was in the message, you wouldn't apply it in a measure when replied Jenny was sending messages, he wouldn't apply? She would call him he wouldn't answer the phone. And we started getting really, really nervous because we couldn't contact him at all.

So we're starting to panic. So after sending, I mean, I wish I could show you some of the different messages I sent to him. It was like, hey, just let me know if I'm getting my rings or not. If I'm lucky, it got to a point where I said, if I'm not getting my rings, I don't care anymore. I just want to know I'm not getting them. Because then at least I know what to do. That's how desperate they started getting and still no replies.

So eventually, Jenny did a bit of research and background checking on him because we know who he is. And we traced his personal details and residents. And we actually very sneakily sent a message to his wife because Jenny said, you know, often in Chinese culture, the wife doesn't want to lose face.

So she messaged him and said, actually out of concern, we really worried about this guy, he's not responding to us. And we hope he's okay. You know, just let us know he's okay. And within five minutes, she got her first reply after days of no reply from him saying, I'm okay, everything's fine. I will get you all your money back.

She was What do you mean, give your money back saying, I can't do this anymore. I'll get your money back. So first pretty weird, I said, so I said to Jenny, well, tell him to please reply to me to reply to me, I'll get your money back. I said, What does that mean, you can't deliver the goods is a problem. And he just kept applying, I'll get your money back. It'll take me a month, but I'll get you all your money back, cetera, et cetera, et cetera.

So now, I thought, wow, this is just too much. You know, he's not even even giving me a hug. I apologise. What he actually said, was, is an environmental problem at the factory. I apologise, I forgot this part.

He said, There's an environmental problem at the factory. And the factory has been shut down by the China government for environmental investigation. And that's why they can't print these products for me.

And he then said that you'll get the money back, but they can't release the goods, and they can't get access to the factory. So I then went to our local lawyer in China and got some advice about this. And he said, No, he said, definitely not likely that that's happened. And before we take any action, what I want today, if you could take action to get the goods released.

So, Jenny, so he suggested that we maybe just take a trip to the factory first and, and visit them and that's when I realised how how crazy I am.

That I've got 50 Plus staff on the ground in China, and I never send someone to the factory. And that's a perfect example. Sometimes you forget the basic simple steps is all it takes to resolve a problem. Anyway, I said, Jenny, please get out there to the factory tomorrow, take centre QC manager, and let's see what's going on.

Jenny calls me the next afternoon. Very happy and chirpy, saying, David, I met the factory. It's open, its operational. And by the way, your rings I hear. I'm like, What are you talking about Jenny.

So what happened when she got to the factory, she met some colleagues, they said, Oh, look, find out boss for you, the boss came out and met her and their whole conversation.

And it turns out that this guy owed the factory money, and had actually introduced the boss that introduced this middleman that I was dealing with to a couple of his friends also manufacturers. And he owed them money. And they took him down. And he just dug this deep hole for himself.

However, he had been paid the money I paid for my product, any that have the stock there. So after Jenny spoke to him, he said, He's absolutely more than happy to print them and release them. As long as he knows that we're going to be the ones paying the balance directly to him, which of course, we simply did.

And the whole problem was solved within one day, of the three weeks of being messed around Now had I sent him or her there earlier, we probably could have short circuit this whole thing.

And it just amazes me that even I got to that point, we are smelled, something was off. But I still trusted and waited and hung on. And that can happen to anybody. But I did learn a lot through that right? I've actually skipped a slide, you guys flew out how I finally solved it, I'll just run through these points for you.

Because I think you've heard it. We visited the factory, we learned the truth, we solved the problem in two days. But most importantly, and I really want to cover this year is we gave great, great customer service. Throughout this whole process when I realised this was not going to be happening. I emailed my hundreds of customers.

And I turned the whole thing around by saying to them, Look, we really sorry, we were 100% honest, we explained the problems of production, we explained how manufacturer let us down and we explain what we're doing to correct it and solve it.

And we are asked if they would mind waiting for up to six to eight weeks for delivery. And what we will do a two for one deal for them. So they purchased one we're going to give them to as a thank you as long as they can wait and support us. And we were just blown away and amazed at how responsive and supportive, I would say 95% of our customers were.

And we got all kinds of emails back from them saying, we understand these things happened, don't be stressed about it. Thank you for being so honest and straight up and with 30, etc, etc. And it was just really humbling to feel and see it when you're honest and authentic and true about what's happening.

You know, you can get the support of your customers, and you can get through these roadblocks and these obstacles. And when I look back at it, I mean, it really cost me eight weeks, unhappy customers and to so much doubt and stress and that all could have been avoided.

So really, how would summarise what my takeaways are on this, and I want to share this with you is, if I just spent the four or $500 on a factory visit, that would have been the quickest, easiest solution in a couple of days. The other thing I learned is the past doesn't guarantee the future, we can't assume just because we've had a good experience with the factory that everything in the future is going to go right.

And that we should give too much latitude, right? If something smells off, or feels off, we need to really get hyper active and hyper proactive engaged. That's what we have to do to solve these problems. And we need to really go where the action is, as can't emphasise that enough you have to be where the action is.

And if people on the ground they dealing with that. But if you can't go yes get somebody like us to go for you know, of course, it didn't cost me four to $500 for a factory visit. But it did cost me the time of my staff, my people, the travel, etc. And when I look at all of that I go four to $500 would have been a drop in the ocean for me to solve that problem three weeks earlier.

And looking back in hindsight, you know, I've kind of said to myself, If this happens again, and I've got delays for more than a couple of days, and I don't feel comfortable with it. I'm just going to automatically say, right, we do a factory visit we check what's happening on the ground, we make sure the right people are involved, and everything's happening. And that's just going to become our protocol now.

So I hope this is helpful. And I think the key thing I want you guys to know is things happen. sourcing from China is a journey. It's a process. There's no miracle formula out there. I think it's just like anything you do in business, that you have to work patiently and slowly with people, you got to build relationships, and you got to overcome problems.

There's no miracle formula, it's about taking your time and doing things right. Hope you found that useful, guys, if you need us, feel free to get to global tqm.com. And just there's a button there to schedule a call, we happy to help you and talk to you about your ideas, problems come up with solutions.

Those calls are completely free. We give great advice over them. The advice is 100%, free, we love to meet clients customers and help them you know, make their their dreams a reality or bring their products to life. And we only charge you if you want to use our services if you need our help on the ground in China. And if you don't device is 100% free. And I can tell you firsthand, I take a lot of those calls. Joyce takes a lot of those calls.

And usually if we can solve a problem with just advice, we always recommend you do that first, and then come to us if you need further help. Anyway, take care. And I'm going to try to get one of these podcasts out at least once a week or once every two weeks with updated stories, updated advice, you know, to keep you guys fresh and learning.

If you've got any ideas or suggestions, feel free to leave us comments. These leave messages, email us at support at global tqm.com and just say, hey, great idea for a podcast. Here's what I want to know. Here's what I want to learn. And I'm sure we can get that covered for you. Meanwhile, take care and see you soon.

GlobalTQM 16:40
Thank you for listening to the Globaltqm.com podcast so you don't miss a single episode. Remember to subscribe to our show on iTunes. We'd also be very grateful if you'd leave us an honest rating and review. And don't forget to download your free gift our ebook on China sourcing for startups at global tqm.com/gift