- Make sure you have a basic understanding of the Chinese
- Always insist on written contracts
- Investigate before you invest in Chinese manufacturers
- Insist on owning the intellectual property rights to your product
- Understand the payment process before you sell your product to China
- Understand the shipment process if you are shipping your product to China
- Do not under-estimate the value of trust and mutual
So you want to do business with China – or more specifically, Chinese manufacturers. Have you ever felt like its really difficult? Well it’s not. Yes, there are some cultural differences, but that shouldn’t stop you. You can do business with China without having to learn Mandarin or even visa versa. You will still be able to communicate effectively and efficiently.
Make sure you have a basic understanding of the Chinese
Make sure you have a basic understanding of the Chinese language, culture and etiquette before you start marketing in China. You need to understand how they think, what motivates them and what they value. If you don’t understand your audience, how can you expect to reach them?
Don’t make assumptions about how your customers will behave or what they will do next. When I started selling my products on Alibaba, I assumed that all of my customers would use PayPal for payment processing — but only a small percentage actually did so. The rest wanted bank transfers or cash on delivery methods instead. It took me several months to figure this out!
Be prepared for long sales cycles, especially when dealing with larger companies like state-owned enterprises (SOEs). These companies tend to move slowly when it comes to making decisions about new suppliers — which means that it can take time for them to buy from you if they’re not already familiar with who you are. Also, be prepared for the Chinese government to make changes in its policies that affect your business — this happened to me several times during my first year of selling on Alibaba.
Always insist on written contracts
Even if you don’t expect them to be enforced by local courts, they will provide some security in case things go wrong or if you need to take legal action against a Chinese company or individual later on;if they offer you something, always insist on a written contract. That way, if there’s a dispute later on, there’s no question about what was agreed upon. In China, the courts are not very effective at enforcing contracts. If you’re dealing with a Chinese company or individual, insist on having all agreements in writing. This will help ensure that both parties know what was agreed upon and can invoke their rights if there’s a dispute later on.
Investigate before you invest in Chinese manufacturers
The first thing you need to do is investigate before you invest in Chinese manufacturers. For example, if you want to make a new product, you must find out what kind of materials are required for it and whether or not these materials are available in China. If they aren’t, then it might be better to outsource the manufacturing of your product from another country altogether.
It’s also important to find out whether your Chinese manufacturer has been doing this type of work for a long time and how many people they employ. If they’ve been in business for years, this means they’re probably established enough to provide quality products at reasonable prices. And if they employ dozens of people on staff, it means that their business must be doing well enough for them to hire so many employees—another sign that they’re reliable partners for your new venture.
Insist on owning the intellectual property rights to your product
Insist on owning the intellectual property rights to your product. If possible, make sure that any technology or product that you sell them requires a license for use by Chinese citizens or companies. This will make it much harder for them to steal your intellectual property without paying for it or telling you about it later on down the road when they have a competing product ready to go into production using your stolen IP as its foundation.
Make sure that all employees sign non-disclosure agreements (NDAs). NDAs are standard practice in most countries these days and should be required in China as well before any employee begins work on any project involving proprietary information belonging to anyone other than themselves . If you don’t have an NDA in place, make sure to have one drawn up before any employee begins work on your project. In the meantime, make sure that employees know that their employment will be terminated immediately if they breach any confidentiality agreement of any kind.
Understand the payment process before you sell your product to China
It’s important to know how Chinese companies pay for their imports. There are three ways that you can receive payment:
1. T/T: Payment upon receipt of goods, by bank transfer or telegraphic transfer (T/T). This is the most common method of payment and is used by most Chinese companies.
2. L/C: Letter of credit, which requires a guarantee from a bank or other financial institution in China. This is very common in large transactions, but it can be difficult to get an L/C if you are new to the market and don’t have any Chinese credit references yet.
3. D/P: Documents against payment — this means that your Chinese customer will send you an invoice for payment once they have received their shipment of goods and confirmed that everything was correct before paying for them. This can be risky if your customer doesn’t confirm that everything was correct with their shipment because they may not have paid for them yet.
Understand the shipment process if you are shipping your product to China
The first step to getting your product into China is understanding how the shipping process works. Shipping from the U.S. to China can take anywhere from two weeks to three months depending on what kind of shipping method you use and when you send it off.
The other thing you should know about shipping is that there are several different ways to do it:
Air freight – This method is popular for large shipments of heavy equipment or machinery. This method can get expensive, especially if you’re shipping something large or heavy like machinery or equipment that needs special handling because it’s fragile or delicate in some way.
Sea freight – This method takes longer than air freight but it’s much cheaper because cargo ships travel at a slower speed than airplanes do, which means they don’t burn as much fuel per mile traveled. Sea freight can be used for smaller shipments where budget is an issue but time isn’t so important because these vessels can sit idle for days at a time before they pick up another load and go back out to sea again.
Do not under-estimate the value of trust and mutual
In Western business culture, there is a tendency towards more direct communication, while in China we value loyalty and trustworthiness over everything else. We might say “yes” even if we don’t mean it because we feel obligated by our relationship with someone else. And it’s important to understand that this kind of behavior is completely normal here — so don’t take it personally!
I’ve worked in many different companies in China over the years, but one thing has remained constant: hierarchy matters. The higher up someone is in the company, the more respect they should receive from employees and others outside the company (such as vendors). If someone is older than you or holds a position of authority or seniority over you , you should always show them the respect they deserve. This doesn’t mean that you have to be submissive or timid — but it does mean that you should be mindful of how your actions affect other people in the company and outside of it.
This is especially true when it comes to negotiating deals, making decisions and conducting business in general. China is a very traditional country where people are focused on building relationships based on trust and mutual respect. If you want them to do something for you, make sure they feel like they can trust you first.
Given all the negative press and stories out there, you’d be forgiven for thinking that China is a difficult place to do business with. However, there are very good reasons why so many Western businesses have set up operations in Asia’s largest economy. The size of the market is the most obvious incentive, with more than one and a quarter billion people, but a number of factors make it easier to do business in China than any other major economic power on the planet.
by David,a business man from USA with over 20 yrs experience business with China.