Sam Goodman scared me. He’s the author of Where East Eats West – the Street-Smarts Guide to Business in China. His book is probably great. I’m not sure yet, because I just picked it up yesterday after listening to him speak.
Sam really knows how to line you up. Take for example, this excerpt from his website:
Judging by the fact that you are here, you are probably either salivating at the size and potential of the Chinese market or you are sweating about the much deserved reputation of Chinese business being fraught with horror stories. Maybe you are doing a bit of both.
See why I am concerned? I am in the process of setting up a deal with a Chinese manufacturer, and Sam says I should “expect the unexpected.” Contracts, it seems, don’t mean the same thing to the Chinese as they do to Americans. A business contract, he likens, is more like a marriage contract – subject to negotiation after-the-fact.
Fortunately, I am delightfully married…so I’ve got at least one component covered. But I dread the thought of having to renegotiate terms after my merchandise is on the boat. So what can I do about it?
I know, I’ll come up with an Idea of the Day! (You saw that one coming, right?). Well, the idea itself won’t help, but its implementation would. We need a World-Wide Better Business Bureau (WWBBB) offering transaction insurance. Companies register and get ranked, and the WWBBB insures your transaction with the their ranked vendors. So when I go to purchase from that Chinese manufacturer I look up their listing and gladly pay a bit extra for transaction insurance. In the case of a dispute I will be covered by the WWBBB, which will then work behind the scenes to resolve the complaint with the manufacturer. If the disagreement can’t be amicably resolved (and they are at fault) then the manufacturer loses their ranking (or it drops, at least).
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