I heard a fun, light-hearted discussion on the radio today about who you tip and don’t tip. Servers, pizza delivery guys and valets for sure, but why not the furniture movers, mechanics, grocery baggers to name a few? It’s sort of like why do we decide some tasks require a consultant or professional? Most people don’t go to court to defend themselves, sell their own houses or put in their own stitches to fix a cut. These are all important for their own reasons, involve a lot of money, risk or other. Isn’t your business right up there with things like your rights, house and health? This may be a little oversimplified, but it still begs the question, why wouldn’t you get expert help when going to China?
Now before anyone argues “self promotion” on my point, I will state full disclosure and say this is part of the business I am in as well as many other talented people. But the point remains the same – it probably makes good sense – only IF it is a value add service or resource. People shouldn’t need or pay for a broker who does nothing but handles the wire transactions and says your product will be delivered soon. As much as I advocate professional help when going to China, I am equally adamant that you should be getting your money’s worth.
A good value add resource knows the lay of the land, resources and contacts in all fields needed (QC, safety testing, transportation, etc) and should be your eyes and ears in a land far away. They should be the kind of people that always have a plan in place for whatever happens. My gauge on whether you have a good value add resource in China is by simply asking: How do you sleep at night? If you have the right person, the answer should be GREAT! Kind of like good offensive linemen in football, if you don’t see or hear anything from them and your team is running for 200 yards a game, all is well. If things aren’t good (quality, timing, consistency) flags are flying and you’re most likely going backwards 10 yards at a time. But unlike football, your business is not a game.
Furthermore, a good value add resource should pay for themselves as time goes by. Not by free service but what they can deliver by always being aware of factory prices, new facilities, better raw material purchases and so on. Prices and margins change and there’s so many factories out there trying to get business. But it’s so difficult trying to manage this from USA. How do I know if the stamping factory 45 minutes away from our central factory who’s offering 20% lower price is good and can do the job? I don’t. But my resources on the streets in China do. That’s what a good value add resource will do for you – always alert, looking and prepared.
Real World Example: I had an associate friend of mine that had their client’s tooling ($100 – $200k worth) in a great little factory. Unfortunately with the economic downturn in 2006, that factory couldn’t stay open much longer. They were going to be locked down in the next day or two and assets held. My friend caught wind of it on the streets in China and immediately got the tooling out that afternoon – 3 days before the ugliness hit – and into a comparable but more stable factory. Situation saved. I’m sure his client had very little problem sleeping that night unlike the unfortunate others caught in that situation.
Summary: I could go with the old saying “anyone who defends themselves in a court of law has a fool for a client” but I think you get what you pay for is more appropriate. How much are you paying for what you’re getting? And how much more would you pay in the short term to sleep well and save money in the long run?
Posted by Joel Buckley
Specialized in product development, sourcing, marketing and branding