How to Settle Factory Claims in China More Successfully – Part Three – Advice For Your Negotiations
The facts
After a brief conversation with the factory’s management, it’s time to begin serious business. Bring all the necessary documentation (e.g. invoices, statements, documents and examples) to your provider. Give everything you have to the person who will make the decision for him to accept your obligation, and hopefully, he will admit the responsibility.
A sample of the product that is defective can be particularly effective in proving your claim because they are able to be provided, and anyone can immediately detect the issue.
A well-organized binder or folder that contains all documents and photographs can be helpful with your presentation (perhaps multiple copies for other managers, too). It would be helpful to have a Chinese translation for the non-English-speaking members of your management team.
Effects that the Claim will be able to have on Your Company
Make clear to your supplier the impact the claim has already wrought on your business (e.g. loss of revenue, losing customer trust as an importer of high quality). In addition, you must explain the consequences of the claim could be if the issue isn’t resolved quickly. Don’t assume that the vendor knows the details. He might not know much about the business practices in your country of origin.
Pay attention to the arguments of your supplier.
While you might be angry and perhaps angry with your supplier, you’re recommended to take note of his arguments prior to making demands. Keep in mind that he is the head of a huge business, which is often larger than your own business, and is deserving of respect. He might try to reject your argument, but you should listen to him prior to making a proposal for an agreement.
Outline Your Settlement Proposal
Making sure you understand the specifics of your settlement offer is vitally important. If you are unsure or unclear, this is the perfect time to clear it out. Usually, suppliers request an unwritten document of the proposed settlement that they can review prior to the meeting. There’s nothing wrong. However, an individual presentation will give it greater weight.
Take note of the reply from your supplier.
The supplier needs to respond to your request, and at this point, he could have new ideas to solve the issue. Take your time if you are determined to accomplish anything. The goal is to find a solution to the issue, and you must be prepared to put in the time.
Give your supplier time to Reconsider
It is extremely likely that your claim will be settled on the first try. It might be necessary to allow your provider a bit of time to review all the details presented and the settlement plan. You may also want to discuss the specific details with his organization or seek advice from an outside source.
It’s the perfect time to have dinner or lunch. Get away from the lengthy conversations and enjoy a meal with your host. They may attempt to assault you with heavy drinks, but that’s the nature of the process. Participate if you wish. This could help in the resolution of your issue.
Another Meeting and Hopefully a revised Proposal
In the next meeting that could happen in the next few days, be attentive to any updated proposals the supplier has to offer.
Most likely, they’ll propose the solution they think the arguments and evidence are sufficient. If they do not accept your assertion or insist on an earlier idea, you might need to go to a harder approach by insisting on a fresh proposal being presented.
Calculate the loss
It is highly unlikely that you’ll be able to recuperate all the expenses. If your supplier is willing to offer an option to compromise, you will need to take the time to review the calculations to determine if the outcome is acceptable to you. If the proposal they offer is not enough, then make a counter-offer or request another meeting to present an alternative proposal. This only makes sense if you’ve got the conviction that it will enhance the outcome.
If you believe that the supplier is not going to accept an improvement to their offer, you could decide today whether you wish to meet or accept the current deal. Stopping the agreement with your supplier of choice is best done as a last resort since it is highly unlikely that they’ll voluntarily reimburse your business for any compensation in the future.
