Finding the Right Business Partner

3 Tips to Finding The Right International Business Partner

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I once had a very wise friend tell me that having a business partner was just like getting married. But the big difference is that it is more messy and difficult to get rid of a business partner than it is to get rid of a marriage partner. Though this may not always be the case, he did have a very valid point that finding the right business partner is not always easy.

Finding the right international business partner can be very difficult as there can be language, culture, and other barriers. But, there are things that you can do such as ensuring you have the knowledge you need, also doing your due diligence, and finally, trusting the knowledge and experience of your local contacts.

As the world has been dealing with COVID 19 there has been a huge shortage of PPE (personal protective equipment). With this, like many of you, we have gotten requests for look for PPE and other medical devices.

Podcast – Finding the Right International Partner

We are here in Asia, I have a team that is on the ground speaking the language of the factories, checking the sources. But even with all this, there can still be things that slip by or things you do not realize until you start the process of working with a local partner.

Here are 3 tips to finding the best local business partner:

Tip 1 – Nothing Beats Knowledge

As they say, knowledge is power, so ingnorance can make you weak. This is really true when it comes to the International supply chain. Even with a lot of experience things can and will happen. But experience does help you to find those errors or mistakes and correct them quickly.

One of the biggest issues I have seen in all my years of working with the international supply chain is ignorance. Ignorance by itself is not the problem. The problem is when pride gets involved and someone comes in and starts to tell everyone how after only being in the country for a day they have it all figured out. They know everything.

Maybe they have gone to another factory and the factory told them what we consider or know to be blatant lies. Someone with experience would know right away they were a lie.

Here is a perfect exmaple I see all the time. I will go into a fatory and ask them how many containers do you ship a month. The factory will tell me we ship 1,000 containers.

Let’s do the math on these 1,000 containers. 1,000 containers equal to 250 containers per week. To be able to load 250 containers per week means that on average each day your factory should be loading 35 containers per day. That would be 35 containers per day if you are working 7 days a week or about 42 containers per day if you are working 6 days a week.

No factory can manufacture, ship, and load 1,000 containers in a week. To do that would be totally insane. The logistics of it would make it absolutely impossible.

So to ship 1,000 containers per month means that containers should be loaded daily. Goods would need to be produced and ready to go on a daily basis.

But many times when a factory tells me they are shipping 1,000 containers per month and I go into their warehouse I see maybe only 1 container packed and ready to go. Furthermore, I do not see any containers waiting to be loaded.

When I go to the production floor I see maybe 1 or 2 containers somewhere in the production process. There are just not enough workers at the factory, or enough production in the manufacturing process or enough raw materials or space at the factory for the factory to be producing 100 containers a month much less 1,000 containers per month.

Mathematically what they are telling me is impossible. Production-wise it is impossible.

But this is an example of the kind of knowledge that you learn through experience and going to visit a lot of factories. It takes years of going into factories to really understand about manufacturing and not just take the factory’s word for what they are telling you.

Tip 2 – Do Your Due Diligence

Do your due diligence. You may say, sure I understand the importance of that. But I cannot tell you how many people do not do this simple step.

Check out the person you are going to work with. You can easily do this with a visit to their factory or showroom to see what kind of product and who they are selling to.

Many people get caught up in what I call the bait and switch. Someone will quote you a very low price to try to get you to either come in or to get your interest and attention.

For example, if someone is quoting a chair on Alibaba for only 20 USD and you know from your own experience that the cheapest you have ever seen that chair in the quality you need is 75 USD. Do you really think they can deliver the chair for 20 USD when everyone else who has the chair at the quality you quoted about 75 to 85 USD?

First, if you really think they can deliver at that price, then you are wrong. The only exception may be if the chair is old stock they want to get rid of. And if it is old stock they want to get rid of they should tell you that upfront.

Second, if a company puts up such a low price and thinks you do not notice then that is a company that I do not want to work with. They hope you are stupid enough not to notice so they try to get you to buy a more expensive product. They had no intention to sell that chair to you at the price.

The reason I will not work with this kind of factory or supplier is that this is never a viable business partner that I can work with long term. If they can so completely and blatantly lie online then what else will they lie about? What else will they hide?

Suppliers like this I walk away from.

Tip 3 – Trust Local Knowledge

At Mondoro we always have local people on the ground working with the factories. I cannot tell you how many times I have met a supplier and they have charmed me.

Yes, they could talk up a storm. They took me to a really nice restaurant. They knew exactly how to related to me and to talk. Maybe they had traveled to the states so we had somethings in common.

When we would get back and I would talk to my local team about my feeling and experience I would get this kind of dead silence. I would have to prod a bit more and then they would say something like “well I am not sure.”

Right then my red flags go up because I realized that they saw something about this person or company that I was too blind to actually see. They understood or heard something that I did not.

This is why one of the first things you really need to do when you are looking to buy products from overseas is to put away your cowboy mentality and listen.

If you coming riding into town thinking you know and understand everything, chances are that you will get burned. If you come in and over-ride all the people who are on the ground and really know what they are doing then you are plain outright being stupid and foolish.

There I have said it. I have bluntly said that you are being stupid as you need to trust the people who are on the ground that they understand what they are doing. That they have the experience that you do not have.

Having ‘boots on the ground” is very important. Work with someone who is objective, which is usually a qualified agent. They will know and understand things you never will.

It is never easy to find the right business partner, but if you have the knowledge, and do your due diligence while listening to those that know what they are doing, then it will be much easier than if you do not. And in the long run, by doing this it will save you time, money, and a lot of headaches.

Is It Important To Understand the Culture of Your Product Sourcing Country?

It is important to take the time to understand the culture and country you will be sourcing and purchasing your products from. Some things you can do to understand this more are: 1) check a map, 2) do your homework about the place you are buying from, 3) show a genuine interest in the country and culture, 4) try to learn a few basic words of the local language, 5) see a few of the cultural sites, 6) be adventurous in trying new foods, 7) ask intelligent questions about the country and 8) find topics of conversation that will reach out across the cultural divide.

To find out more why this is important you can read the blog 8 Tips to Understand the Culture of Your Product Sourcing Country by clicking here.

Why Is It Important To Have a Social Conscience?

Having a social conscience means that you are concerned about the problems or injustices of society or simply just caring about those who are less fortunate. There are still many in the world who suffer under extreme poverty by living on less than 1.9 USD per day. This is why it is important that we all seek to find ways to have a social conscience and help those who are less fortunate than we are. The one gender who suffers the most in the world is always women and girls. This is why at Mondoro we seek to find ways to work with small women-based enterprises for our manufacturing needs.

To find out more why having a social conscience is important you can read our blog Having a Social Conscience, What Everyone Should Know, by clicking here.