Tips in Doing Business in China Part 2

Part 2 of Tips in Doing Business in China

5. Family. It is always number one and do not be fooled. You are going to deal with a lot of people over there that are family. And the hierarchy runs, a father-sons-daughters and the daughters do a lot of the work. They are going to be your contact people in a lot of cases. So let your assistants deal with the daughters, do not show them very much attention at all.

Don’t ever show them anything that makes them feel like your flirting with them or anything that could possibly be held as sexist or you are going to be in trouble. Maybe not in trouble with the law but you will be in trouble with the dad which is about is bad.

The sons in a lot of businesses are placed there by the fathers and almost every case or place there by the fathers to learn the business so that they can take over someday. You should say hello to them and you should greet them with the respect of their father. But then really not do business with them.

If you have a manager with you, your manager should talk to the sons. Your assistant should talk to the ladies whether they are related or not. You won’t know in a lot of cases that one of the ladies you are talking to is actually the owner’s daughter and in a lot of cases they are. Because everything is great tightly management. And they squabble between one another but never be fooled. They always will be together and you are not going to make one of them turn the other ones opinion, one way or the other. So it’s a zero-sum game. So just be respectful of family and know that they are always going to be there. They are always going to be united no matter what they do. So just watch not to fall down the social ladder.

When you walk in the door, if you are dress to appropriately and you look like you are important, they are going to treat you as important. Until you do things that make you seem unimportant. Do you think Donald Trump stops and spends 30 minutes talking with the doorman at his hotel when he goes in one of his hotel buildings? Probably not and he might be a nice guy I don’t think anybody has ever accused Donald of being a nice guy. But he probably doesn’t spend a lot of time talking to a doorman in his apartments. If he did people might thinks that he was kind of nuts. You know he was wasting a lot of his time and the Chinese are big on thrift in wasting of your time. They don’t want to waste a lot or your time. They do not feel like its waste but if they see dealing with subordinates, they are going to assume that you are that level.

6. Be ZEN and never pressure. Don’t push and it is going to be one of the hardest thing you will ever do. Is not going “Just give me the freaking price”. That is all you want. “I want the price, when can you deliver, I want this, this I am just trying to get the point”. If you pressure like that you are going to meet with great deal of resistance and the harder you push with price the more reluctant they are going to be to give you one. And if you absolutely insist they are going to give you one just going to knock your head off.

7. Thrift. The Chinese respect thrift, if you seem like you spend a lot of money foolishly. You are going to be seen as foolish, if you ask for products to be packaged in the way. If you want a product packaged a certain way that cost a lot more than the way they normally package it, you need to explain to them why. Not just that it is because that is the
way I want it. Because it makes you look like a spoiled brat then. And a foolish spoiled brat at that. And they are going to take great advantage of you.

8. It’s all about business. Don’t get off and trying to be their very best friend. For the most part Chinese business relationships particularly without outsiders and foreigners take years to develop. Before they are going to consider you anything other than a customer is going to take years and years. You may feel like I am going to make them my friend and you are probably not going to and that have some exceptions to that rule where I have had sons and businesses that have been in US educated and then lived here for a while and I had made some friends with. As a rule, they are going to treat you kindly and treat you respectfully and you should them but in the end it’s a business transaction that they are after. Over a period of years and years you may build a friendship relationship with a Chinese factory owner.

9. Never threaten them. Never threat them as far as either, “You going to do this or I am going to walk”. Because they will not respond to you. They will threaten you on the other hand. They are going to test you to see how you respond. They are going to talk about selling to your competitors. They are going to talk about selling into your market and they do that as a tactic. It’s a power play. It’s a way for them to get position to let you know that they don’t need you. Even though they actually do. And it is just a way for them to make you feel smaller. And think you feel smaller and you want a little less. If you were willing to pay a little more – its all about positioning. They do a lot of positioning.

10. Place to negotiate. When you are doing this factory tours and you go in, you want to really tear their products apart. You want to look at them, you want to check them for the quality. You want to do everything that you possibly can and make sure you are making smart buying decision. You want to see there eyes on 9,000 records. You want to see their turnover. Their annual report. Their information that shows how credible their company is. You want to see some of the customers that they deal with. You want to be a very hard they really respect you being a very hard investigator. They think that is really smart and they are going to get a lot of respect to you and you are going to get a lot of respect out of them.

They don’t necessarily respect you being a big tough negotiator because they know that in the end, they have the stuff and you don’t. So they have really the best negotiating position to be and you really don’t. So you got some money that
is fine. There is a lots of it making. They can sell their product almost anybody. What they want is to deal with smart people because it is like in our business we always kid around in the information publishing business in it. The people who pay you a least amount of money cause the most amount of problems and that is true with them and they know that. And they don’t want the hassle factor of that. So they want to deal with smart business people. They don’t want to deal with newbie that do not know what they are doing because the transaction they do not make a great deal of money per transaction. So if there is a lot of hassle factor to the transaction it is just not really worth their while.
There are the points in negotiating with the Chinese that are at least a rough draft. And if you will follow those you will do a whole lot better than I did for the first 3 or 4 years that I did this. Because I think I have broken everyone one of
those rules at least once.