I am glad that somebody do this – hot result from a direct research of global buyer concerns when sourcing from China manufacturers.
Result is expected, but again and again seller tends to ignore the voice of customer. I wish I was wrong but I would believe the result will be similar 5 more years later. Why don’t we take a look – what’s wrong?
– First thing I am quite surprise to see is that facility does not draw attention to big buyers. It is not much in line with my own experience. In a famous US household hardware Fortune 500 we used to suffer from insufficient production capacity. It sounds uncommon for most Chinese supplier as it is not too difficult for factory to increase number of labor or to work overtime. However, don’t forget a serious buyer is looking for stable, trained & qualified capacity, not by heavily stressed workforce nor new fresh workers. Also professional buyer looks for plant with automation and efficiency facility.
It is always nice to see a big and highly automated facility. However if you are not a large scale manufacturer, don’t be frustrated. A small but well layout factory with engineered workflow and clean, 5S based workshop could also impress a professional buyer.
– Then I don’t see “commitment”. Think about this – A supplier quote a nice price and win the contract, but after 2 deliveries supplier find that he make a lost by his wrong costing calculation. He then tells his customer he cannot continues with this price and have to increase. Buyers hate this. This is one of the worst mistake to make and seller will really risk himself never see this customer again.
– I strongly agree that “understanding buyer needs” should be on the top of the list. Sales tend to speak than listen. In my sourcing career most of the sales post aggressive character in term of communication. They speak up for their product, their facility, their business model, mostly presentable and talented. They just failed to listen. In SAOS (the sourcing company I am running), every project we write a very detail RFQ package including all the background of the end user, application, business outlook and forecast..etc. However, we believe that most of the potential suppliers do not read even though we present it in Chinese. Communication is two way and the problem could come from another direction. Amateur buyer make assumption based on his/her background, culture, impression..etc. Most common mistake is to assume supplier merely interest to know about the project/order, but not the business. In fact, the more you help your supplier understand you, the better opportunity to match a right partner.
– Responsiveness rank number 2 for reason. “Slow boat to China” the old American say and seem valid still. Few months ago in a LCD sourcing project we launched for our client, RFQ was sent to 80 suppliers, and only 20 suppliers could come back their answer within 2 weeks. About 10 mores suppliers reply to us after 3 weeks, claiming they were busy and didn’t read our email until recently…bababa. No supplier acknowledge when receive our RFQ. Responsiveness was unsatisfied. To maintain a good response rate for our client, we have to call the shortlisted one by one to make sure they understand the requirement and will take part in the RFQ bidding process. While most sellers complaining they don’t get customer response and has difficulty to look for serious customer, my experience shows the same challenge, but on the buyer side. What would be good practice for seller is to always acknowledge a request immediate. It doesn’t matter you have an answer for your customer already or not. It does matter to show you care your customer’s business.
– Communication skill ranks the last. This is an encouraging finding coz it seems true that China supplier has been focusing on their English training and put as a career priority. Also, big customer tends to have a Chinese office with local sourcing professional to support and ease the communication. As a result you see they are least concern on this area compare to middle or small players.
– Last thing. Price, although it ranked second when buyer considering supplier, it is much less important than understanding buyer correctly. Also, the bigger the buyer the less sensitive to price. Very often I see factory sales promote themselves the “cheapest price of all”. I hope this research result could have chance their mind.
So I try to summarize points to be concerned:
– Facility does matter to big customer. If you are small, try to be organized and look efficient.
– Understanding customer needs generate trust. It won’t happen overnight but is a continuous process. Read again and again customer’s email and make a serious response.
– However, before you could come up with a serious response, make sure you acknowledge your customer immediate when you see their emails. A simple reply could be good enough.
– Although your customer keeps saying they want cheapest price, there is something more important than price. It is even less sensitive for big buyer as long as you could provide right product/service at the right time.
By Ben Chu SAOS CEO