Countless times, in market fairs and meetings with providers, we have heard the following question from the western buyer to the Chinese vendor:

Do you own a factory?

Or a similar question but expressed with “a sense of need”, not to say a “pressing need” that the answer be positive because, so far, we love the vendor and we need that positive answer!

You have a factory, right?

In 100% of the cases, the obvious answer we have always heard is the same:

Yes.

In fact, those providers who have more experience and know how important this question is for their interlocutor, the answer has always been reinforced with a categorical,

Yes, of course!

Obviously, this question –contradicting the sarcastic title—is not original at all, and if it were just an “spontaneous” question, like many others we ask when we are selecting vendors, I wouldn’t have to write about it. But I do it willfully so that we may reflect on this question because, as I have observed –with a degree of concern—, the selection or dismissal of a potential provider for our company is based on this query.

The situation that arises from this original question and the immediate positive response from a provider that is always more “knowledgeable” on these matters than we are, makes me feel naturally and healthily amused. It puts me in a good mood and makes me smile, which is always welcome in a “marathon session” of visiting providers or fairs, starting in the morning and extending well into the evening.

Right after the question and its more than obvious answer, a process of analysis begins in order to determine whether the positive answer matches reality or we are being lied to.

By observing the vendor’s attitude, his product, stand or office, or even the factory he claims to own, we can arrive to a conclusion. This analysis is based on our experience in Asia, in this type of negotiation, and on our skills to ascertain the real situation. I believe that once we arrive to a conclusion, and if we think the provider is “deceiving” us, it is best not to reveal it immediately so as not to interrupt the process of analysis we have set, and because it can be so crucial as to lose a valuable provider.

Question/Mistake

This last point is where the mistake that I’m referring to lays!

I believe it’s not wrong to ask the question, as long as we take it as another piece of information, a complement, in our survey and subsequent analysis of the strengths and weaknesses of that provider.

More important than asking this “mechanical question” that, again, most of the times gets an affirmative answer, is first, not to confer a decisive value to the answer, and second, to go on to analyze the rest of the relevant conditions that give the provider the necessary plus to be chosen over the rest of the companies we contacted.

With a series of questions, whose answers we’ll analyze in upcoming articles, we will try to understand why it is absurd to base the selection or dismissal of a provider by giving so much importance to this matter in relation to others which are just as or even more relevant.

Why do we think, almost naively, that the provider will answer with the truth to a question that is so blunt and that allows only a “yes” or “no” answer?

Why does the provider lie to us in most cases and responds affirmatively?

What must we do to check if the answer matches reality?

How will we effectively confirm that this provider is the owner of the factory or factories where our product will be made?

Even further and in the future… Break Time

How do we make sure that once they receive our manufacturing order, it will be placed in one of those production units?

What are the advantages of hiring a provider who owns a factory over a company that sub-hires the production, a “trader”?

What are the disadvantages? Because we agree that there are disadvantages, right?

Why is it that, in many cases, a negative answer gives us the wrong impression or makes us feel disappointed with the provider, even when, according to our analysis, everything else is fine? Is this related to price and time?

And finally, why do we confer so much importance to this aspect when there are many other aspects more relevant and essential when choosing a vendor? Can you imagine which ones I’m talking about?

To finish, an illustrative story about the topic at hand but… that will be in the next post.

Cheers!