AddThis Social Bookmark Button
26
Oct
2010
Another Headache... E-mail
Featured - Business
Written by David A. Dayton
We've been working on samples for a large order of clothes for over a year now. The clothes are cool, new, fun. But it's been a very difficult process getting to the end of the road—the start of actual production. We've got the PO signed, the deposit paid and what happens?  Factory tells us: “We don’t think that we can do this order.  We’re really busy now.” 

This, of course, was the response to the payment of the deposit.  No indications prior to the placing of the order that there would be any problems.  We’ve talked EVERY day in the two weeks preceding the actual transfer of funds and every conversation was great.  “Of course we can meet these dates.” “Of course we’ll work with your QC.”  “Of course we’ll meet all the QC standards (you’ll never be as strict as our Japanese clients.)”

So we’ve spent the last week just trying to get them to keep the commitments that they agreed too (signed and chopped) in the contract.  Every single line in the contract was review with them before they signed it.  Every point was agreed to.  Dates were confirmed.  Qtty’s and time frames agreed to.

And then they got the money and EVERY item that was important (material, quality, times, prices) were all no longer committed to.

We have a negotiator/problem solver that we hired just for situations like this.  She worked on the factory for three days before we got back to the point where we were when we made the deposit in the first place.  (Side note–this person does the least amount of actual daily punch-the-clock work in the office, but saves us more money than any other single employee other than maybe QC.)

Here is what she reported to me after the order issues had been resolved:

1. They did it on purpose. 

She said that there are times when there are legitimate concerns and changes and times when it is completely a strategy to get more money.  The major difference between real and fake issues include: when you can track changes in material prices, you can see factory capacity already maxed out, or there are differences in the samples and production standards.

2. Fighting about the contract is not nearly as effective as begging.

It's all about face. They know they are wrong but allowing them power can often be as effective as offering them money.  The end result of our negotiations is them being in power anyway—they have the deposit, the control the speed for the production line, they monitor the QC, purchase the materials—there is so much that could be sabotaged and be made to look it was just bad luck.  So, giving them the face now and admitting that we’re at their mercy is both pleasing to them and the truth.  We don’t pay any more (yet) and can still go after them legally if we had too.  But at this point they are pretty pleased with themselves and we’re just glad to be back to square one.

3. Thanking them profusely (gifts) is the correct response.

A dinner will cost $100 for the manager that told us “we moved other projects back for you.”  A shirt or wallet (brand name but from Ross or another US discount store) gives tons of face and costs $20.  It fulfills the social obligation we had to the manager for “helping” and it saves us a bundle of money we would have wasted in transferring the order or suing them or fighting and raising the price.  I’ve often said that sometimes the best option is paying more to get what you had already agreed to.  When it’s a small gift or dinner it’s almost not even painful.  Ego is a bit hard to swallow, but that’s about it.

Sometimes you are totally in the right. Sometimes people lie to you.  Sometimes there is nothing you can do about it.  But the end goal, which is often very very hard to remember, is to get the project done (correctly, on time and on budget).  You may not get what you wanted at the originally contracted-for price, but on balance you’re still getting what you want (and it’s still at a savings too!).
 
David A. Dayton is the CEO of Silk Road International (SRI), an U.S.-owned and managed international procurement agency based in China. Click here to visit SRI's Website.

Our valuable Editor David A. Dayton has been with us since Monday, 02 November 2009.

Show Other Articles Of This Author

Do you have a story to share? Do you want to be a ND Author? Send your own story, write about family, friends, life in Xi'an, business, real estate, education, travel, entertainment, write a review, suggest a column and more! In any language! Please include at least one picture about your story if possible, your name, email address, blog-/web-address, so we can give you credit. Go ahead, click here: Submit your Story now and we will publish it and list you as a ND contributor! Alternatively you can send us your story to: xianstories@newdynasty.com.cn

Comments  

 
+2 #4 Mozzano 2010-10-28 20:21
Quoting Ada:
I came to shanghai to set-up a chain store last year december. I ran into lots of doggie businessman in shanghai. They don't hold up their end of the budget once they got the money. They give you orange when you asked for an apple, despite the size of the company.

My company end up have to sue our contruction company, which happen to be a sub-branch of one of the biggest contruction group in shanghai.

I reckon it all come down to local business habits rather than the company itself. It the people(includin g bosses) work in the company that do all these bad practices. So I personally would play dirty with them too. An eye for an eye.

There is no way, why we should give in to the local when they try to bully us or rip us off.


Ada


Exactly.
Quote
 
 
+3 #3 Ada 2010-10-28 20:08
I came to shanghai to set-up a chain store last year december. I ran into lots of doggie businessman in shanghai. They don't hold up their end of the budget once they got the money. They give you orange when you asked for an apple, despite the size of the company.

My company end up have to sue our contruction company, which happen to be a sub-branch of one of the biggest contruction group in shanghai.

I reckon it all come down to local business habits rather than the company itself. It the people(includin g bosses) work in the company that do all these bad practices. So I personally would play dirty with them too. An eye for an eye.

There is no way, why we should give in to the local when they try to bully us or rip us off.


Ada
Quote
 
 
+2 #2 Chip 2010-10-28 12:13
Ok, you can do this...Or, you can work with other firms in China that don't behave like this.
Quote
 
 
+3 #1 Jaycasey 2010-10-28 03:32
An everyday thing in doing business in China. Why Western companies think it is worth it to put up with these games I don't know. Hasn't any of these people read "Mr. China" or "Poorly Made in China" by Midler?
Quote
 

Add comment


Security code
Refresh

More Articles in this Category

Latest Articles in Business

NEW DYNASTY TV - Xi'an Reports, Interviews and Movies

ND TV - Premier Web TV Reports, Interviews, Movies about Expats and Locals in Xi'an/China! This is UNIQUE in Xi'an!

ND proudly presents: Xi'an Models Volume 1

Xi'an Models

Advertisement

RECOMMENDED LINKS  
MANGO - Women's Collection
HaoHao - China Stories
Silk Road International (SRI)

Special ND Promotion 2015


New Dynasty Comics


We want you! - 加入我们!

We're currently looking for some down to earth people who can spare a little time each week to write about anything related to Xi'an and China, who are eager to share stories, news, insight info and be a part of the most sophisticated and fastest growing Digital Magazine in Xi'an. Whether you're young or old, we'd like to hear from you. Click for more info.

Editorials

Xi'an goes digital
To all readers, subscribers, friends: Welcome to Xi'ans most sophisticated, multilingual digital magazine. We are excited to offer you from today on, 15. June 2009, a new and superior kind of publication in Xi'an and a refreshing new concept. Of course, as with any technology-related... Click here to read the full story!

Skype ND!

Skype ND!

Featured Website

¡XABOO! is a brand new interactive Community Platform for Locals and Expatriates in Xi'an (China).¡XABOO! is an interactive Community Platform for Locals and Expatriates in Xi'an. Click here & register now!

Editor Team

We have a team that works on the articles presented on ND. Please contact us if  you are interested in helping us out with the creation of articles or researching information in Xi'an. Contact:  info@newdynasty.com.cn

Post translation

ND has readers from all over the world and in several languages. If you translate one of our articles please let us know so we can add a link at the original article! Your site and name will be posted as well. Thanks!

Restaurants

article thumbnail Tuscany Restaurant

We are a family owned restaurant and take pride in everything we do. From the fine ingredients we use to the wines we carry, you...

ND Digital Magazine Xi'an - Subscribe now!

ND Digital Magazine Sample  Cover
*Sample Image

Hotels

article thumbnail Grand Noble Xi'an

The hotel has 428 well-appointed guestrooms and suites, a full range of dining, recreational and conference facilities. ...

ND on your Mobile Phone Browser - Coming soon

ND Mobile v1.0 is online! Browse ND's eMag with your mobile device by typing the address m.newdynasty.com.cn in the browser of your device or be auto-redirected to our mobile site by typing newdynasty.com.cn. You can read our articles, watch ND TV and more even better in the future with your iphone, android etc. Stay tuned. Click here for more Info or here if you want to report a bug.