In my last article I wrote about tricks and tips on finding suppliers for yourself. All the basics to keep in mind when finding and selecting a good supplier. Now that you have come to the deal you want to make, what’s next what is going to happen, what can you expect?
This is what I would like to talk about now, if you are worried about how to find a good supplier, please have a look at the first article in this series (sourcing 101).
So you have found the supplier that you want to work with and you are ready to make the deal, what do you pay attention to, what to be sure of before everything will start. And perhaps even more important what to expect during the order process that is ahead.
MAKING THE DEAL:
Important, as stated in the last article, is to have everything as discussed with the supplier to be part of a deal in writing. Confirmation from the supplier that he/she agrees to the total deal with everything included as discussed. Important is to have everything listed for yourself of course and to make sure you have thought of everything before the deal is made.
Do you want to apply quality control? Will the product have your logo on it? And how will the logo be applied (sticker vs. printing). Where do the EAN barcodes go? What certifications are promised/discussed? Size of the cartons and packing materials to be used. Will instructions be added to the product and it what language? The list goes on and on. The most important thing is to try and think of everything, then discuss all these things, and only then when all is confirmed make the deal. Make sure nothing is added later, as this will give your supplier opportunities to ask for more money or come up with hidden costs they want to present you with. Once you have the deal you want, the next step in the process will start.
When the deal is made, be sure to have the payment agreement clearly stated as well, the industry standard at the moment is 30% payment before start of production and remaining 70% upon the production being finished (proven by asking pictures of the end results)
ORDER MANAGEMENT:
The deal has been made and a schedule has been set. The supplier has given you the dates of when production will be finished and when the goods are ready to ship or ready to be picked up. Of course this depends on the incoterms the both of you have agreed too. I will not dig deeper in the transport part or the incoterms in this specific article, but they will of course determine the difference between an end date of goods being ready vs. goods being delivered at your warehouse (China or Europe).
As soon as this period starts, I would set yourself a schedule, with planned moments during the whole process that you contact your supplier. You need to find a good balance to keep track of everything with your supplier while at the same time not completely annoying the supplier by asking daily updates constantly. This is something you have to determine for yourself, but make it at least once or twice a week. Just to check in with them, have them explain where they are in the process and ask if everything is still on schedule. Always work under the presumption that the supplier will not automatically keep you informed on what is going on. Getting in touch on a regular basis will also keep you on the radar.
Along the way during the whole process patience will be a virtue, depending on the agreed upon schedule it will take some of your patience, as you want everything done quickly and swiftly. In general there will be moments in the process that the supplier will ask questions or be difficult about some of the things that were agreed upon. Would it be a problem that packaging will be a bit different? We are trying to print your logo, but it would help a lot if we turn it into stickers, is that ok with you? They can and often will come up with these types of “issues” for them to try and make it easier along the way. Easier for them! Not for you.
Stand your ground, stick to everything that was confirmed in your deal (this is why it’s important to have everything discussed before the deal is made). There can be delays, of course, just like anywhere in the world there can be delays in the entire process, this should not make you nervous or anxious, unfortunately sometimes stuff happens.
Now at this point in time it is possible that you think of something you forgot before the start of production, or they ask you a question about the production that would give a change to the product or deal. As stated before always try to get everything arranged and set before the deal, but unfortunately, it can happen that you forgot to think about something unwillingly.
At this point the conversation can be tricky, always try to start the communication as a question for confirmation if something is included as discussed. For example, what do the CE stickers look like? (even though perhaps you forgot to ask the supplier to put CE stickers on). This way you’re letting the supplier know that you presumed this adjustment or action would be part of the deal (even though it was perhaps not mentioned). Then a “game” would normally start, the supplier will complain that some things are difficult and not agreed upon and will most likely tell you it is not possible or is going to cost you extra. However it can help to keep nagging a bit from your side, and not give up on the first NO.
Of course if the thing you’re asking for was really not discussed and the “ignorance/presumed” card didn’t work, you could be looking at added costs. In that case look at it as a new negotiation separate from the original deal and use the same techniques and don’t just agree on what they are saying the extra costs will be.
Be prepared as well that if you ask for something “new” it could mean they will start playing this game the other way around. All of a sudden things that were agreed upon have become more expensive or are no longer possible. Don’t accept any of this. They will most likely try this (even if no extra things were asked by you). Make sure to stand your ground and don’t accept changes to the agreed upon deal. These things are part of the normal process unfortunately so stay calm and don’t budge. Try and stay patient and don’t loose your temper with them.
However if you ultimately get to a situation that is simply not acceptable, put your foot down, without starting to swear, make absolutely sure that you make the supplier feel you are seriously pissed off (for lack of better words), make sure they “feel” your anger about the situation. Tell them simply “we have this deal, stop complaining and just do what we agreed upon”.
At this point it would of course still help to have your alternative supplier ready, but be very careful to play this ultimate card. Only do this when you are really fed up with the supplier and have no other ways left you can think off. Because there could be results that you are not looking for at this point in time. The result of telling the supplier you want to move to a different supplier, can result in the supplier saying “ok go for it”. If this is an acceptable result, this can be a powerful final card to play as it could give you precisely the end results you want.
This as a total game is one you need to be prepared for, it will almost always happen! (not the switching supplier part hopefully)
Stay yourself but stand your ground.
AND THEN THERE WERE PRODUCTS:
Finally we have a look at the end of the process. You have fought (or not, with a good supplier) for your order, dealt with all the needed changes and pushes for changes from the suppliers side. You get the magical signal from the supplier, THE GOODS ARE READY! Yes, great news. At this point we would always ask for pictures. Especially pictures of things you have specifically asked for. Picture of how a box is packed. Picture of the logo as printed on the product. Pictures of any sticker or labels on the product. Pictures of the cartons, specifically with your EAN code in the picture. Any other specifics you are looking for, ask them to send a picture. Right now there can actually still be changes made, once the goods are on the way they cannot be.
At this point in time if you are happy with the results, you will make the final payment as needed and the transport process starts. This process is interesting and tricky enough to have a separate article about.