Doing Business in China

How to get maximum ROI in China Trade shows Keep expectations realistic Plan your time on the floor

Keep expectations realistic

What did they do wrong? Nothing, other than expecting business to be the same in Asia as it is in the US. They prepared, they researched, they went to the right shows and even sent the right people. But they also assumed that regardless of where they went business would be business. They mistakenly thought they could get the same price as the "locals" and manage production after the show with phone, fax and e-mail. Despite all the fine preparation they forgot that they "look different" and couldn't do QA or step in and fix the "little things" from 3,000 miles away.

So what are the correct expectations? Understand going in that trade shows are just that -- shows. Just like in the US you'll see a lot of fluff. You may get lucky. But typically, trade shows are great for only two things: buying off the shelf products and initial options for making relationships for future manufacturing. Trade shows only give you a best case scenario, a sales pitch. At a trade show you can't see the factory, you can't talk with a factory's other clients, you can't know if samples and production are going to match, you won't know what it's like to communicate details or resolve problems. It's a show, so know what you are getting into from the get go.

If you are a buyer attending the right show you will literally be at a buffet. Many buyers come to China one to four times a year and complete their entire procurement requirements for the season or year. But if this your first show, don't let your eyes get bigger than you stomach. Sample as much as you can before you commit to one factory. Talk with other buyers at the show and even at the same booths that you are sourcing from. Again, spending time up front in research will save you hours, dollars and headaches down the line.

If you are looking for custom manufacturing, the trade show is just the start of the process, not the end. So lower your expectations for quick riches right off the bat. While trade shows can provide you with hundreds of options, qualifying those options before you make financial commitments is crucial. Come to the show prepared with a "qualifications" worksheet -- a list of minimum qualifications that a factory has to have to even be considered. Be specific, be clear and be patient. And be prepared to spend significant time after the show to sort through, question and investigate each factory that you pre-qualify.

One note on being "foreign" in China. You stand out. Not only do you look different, you are expected to be different -- for example, you are expected to have more money than time. The more time you can spend on negotiations the better your prices will be. A couple hundred dollars in fees to push your flight back is totally worth thousands of dollars in savings on production costs.

Plan your time on the floor
Being prepared will help you make the best use of your time. So what's the best way to spend your time for the few days while you are at the show? First, take some time each morning and map out where you are going, who will cover which halls, and which companies you'll talk to first. Prioritize your needs and outline your best chances for success. An hour spent planning could save you an entire day walking the wrong hall. Remember, you spent thousands of dollars to come here, and you only have this one shot to get it right.

Next, after you know where you are going it's time to decide who to talk to. If you have some recommendations follow up on those. If you have previous appointments, make sure to schedule those in. If you are going in blind bring your list of minimum qualifications. As you sit down with each factory, even those recommended to you by others, use your minimum standards to decide immediately if they meet your needs. Don't spend more time than you need to eliminate factories that don't meet your needs.

(Side note on time: shows typically last for seven hours a day; three days at a show means you've only got 21 hours to find what you need. That may seem like a lot at first, but if you spend one hour each with six factories, and 30 minutes with another 30 your whole trip is used up! And that assumes that you will be at the show from open to close and it doesn't include any time to talk with associates, rest your feet, eat lunch, use the restroom, browse booths or even move through the huge venues.)

Get the right information
Here are some suggested questions to ask those you meet as you start to talk with them about your projects:

Are they the actual factory or a trading company? (Press this issues as it will be important to effective communications, QC and pricing later on.)
Is the person you are talking with at the fair going to be at the factory after the fair?
Is there someone that speaks English at the factory (not just someone that reads and writes English, but someone you can actually talk to if there is a problem)?
Who is going to talk with the engineer regarding the specifics of your project? Can you talk with him/her yourself?
What experience do they have with outside QA?
Do they have an export license?
Have they worked with clients in your country/industry before?
Will they give you any client testimonials?
Will they give you regular reports on production including photos?
What kinds of international certifications/training do they have (i.e. ISO, RoHS, Wal-Mart, Disney)?
An often overlooked resource at trade shows is the other buyers. While you are at the show, don't be afraid to talk with them. A group of buyers sharing notes on different factories can not only save time but money as well. Buyers from other countries may not be your competitors and so would not be threatened by your questions. And there's a "bond" that takes place when you meet someone from you home country while you're abroad. Use these connections to your advantage. Besides, connections you make with other buyers may turn into business opportunities in the future.
No matter who you meet -- supplier, buyer or friend -- make sure that you take notes on the spot! Don't wait until lunchtime or dinnertime -- by then you may have 50 new business cards. Be as specific as possible -- "guy with the cool booth," or "great price, go back later" is not enough. If they are important enough to talk with and get a card from (remember, you only have 21 hours) then you should record what was said and what your impressions were as soon as you can.

By the way, if you don't know already you'll learn as soon as you hit the ground, that the economies of several small countries in Asia are supported entirely by the printing of business cards. Maybe that's a slight exaggeration but don't underestimate the importance of business cards in your initial interactions. You can easily go through a couple hundred cards in just a few days in China. So (again) be prepared. Print them on nice paper with good ink. Hand them over with two hands and comment positively on the ones you receive in return. Get a couple of cards from each booth and staple one to your page of notes to keep them together.

How to get maximum ROI in China Trade shows Keep expectations realistic Plan your time on the floor