If you’re sourcing in China, you should be very familiar with Guanxi.
Google translate would tell you that Guanxi is “(in China) the system of social networks and influential relationships that facilitate business and other dealings”, but it is much more than that.
In China, relationships are just as important as money. It’s another type of currency and you have to earn it. The more business with a factory you are doing, the more loyal they are to you. They are even more loyal when a strong relationship has been establish. If you want them to do everything in their power to make your product the best it can be and take special care that top quality is achieved, you need to work with them through all of the ups and downs. There will be hiccups, errors, or defectives. If you can work with a factory towards a solution and not attack them for it, you would have established a strong foundation to Guanxi with that factory.
You have to be realistic with your expectations.
When starting with a new factory, you might feel like they are ignoring you or that they are slow. The reality is that these are large factories that you’re working with and, if they are a good factory, they will have many clients. Practicing patience is key. It’s okay to be politely pushy, but don’t push too hard. Once time permits, your assigned Agent will reply and take care of you. The more you communicate in a respectful manner, the more attention you will get. They will always give priority to those clients that they have Guanxi with and those that conduct a large amount of repetitive business with them.
A factory cannot chase after every potential opportunity that comes their way. If the business isn’t large enough, they will not make enough money to keep their lights on. When they have time, in-between other large production runs, they like the smaller runs to keep their employees busy and to keep their machines moving. Be patient and they will take care of you. Once you start building Guanxi, you will get more attention.
Be aware of their schedule.
Another large factor in building strong Guanxi is being considerate of their holiday schedule. You should be aware of their schedules and don’t try to push them hard on deadlines that are unreasonable. If you know Chinese New Year is coming up, start your orders at least 1 month sooner than you normally would. If they are promising a 30 day production time, be understanding when they have Dragon Boat Days or Mid-Autumn Day. They work really hard blue-collar jobs and need their breaks. If you show that you understand and work with their schedules, they will be very loyal in return.
Preparedness is a very strong component to Guanxi.
You need to know your business. They are your manufacturers, not your designers or your problem-solvers. The factories do not want to waste time going back and forth on samples. They want to produce a good sample and start production. That’s when they make money keep their employees busy and keep them paid. If you approach a factory with a clear message and strong tech packs, your project will look very attractive to them. If you are waffling throughout the sampling process, chances are the production run is going to run into major issues and the factory will not want to work with you.
In summary, Guanxi is very important and it is a two way road. If you do your part, your factory will do theirs. Many companies have worked long and hard to establish strong Guanxi and do everything they can to maintain it.. The more a process is dialed in the better it is for both parties.
Be patient, be considerate and know your product. Happy sourcing!