Selling goods to Asia can be challenging for westerners. End users of chemicals in Asia often use trading companies to do their buying.  Selling to an Asian consumer of chemicals via the usual tools of marketing- cold calls, advertising, etc.- is complicated by the fact that the buyer may not be the end user. A call to an end user, if you can find their identity, may be politely declined. Instead, you might be referred to the allied trading company or just shown the door.

Th’ Gaussling is not an expert in this area of business. But I have more than a passing interest. Under the egg on my face are plenty of black and blue marks from my latest lesson. I should be receiving a certificate for 2 credit hours from the correspondence school of hard knocks.

Outwardly, chemical trading companies often look like end-users of chemical products. If you visit their websites, they’ll promote the manufacturing capacity of their customers and the impressive list of fine chemical products. In reality, they are located in a cramped office suite with fax machines and a server that projects the image onto the internet.  Their activity is limited to buying, selling and arranging logistics. Trading companies are part of the social custom of strategic alliances in Japanese business. They may buy and resell with a markup. They may provide contract buying services. There are numerous ways to do the deed.

For a factory, this arrangement allows managers to focus on manufacturing. Since trading companies only get paid if they hand over their deliverables, there is always a productive stress on the procurement people to look after their cadre of customers. 

One big problem from the vendors perspective is negotiation.  Negotiating with an end-user through an intermediary trading company is complex and time consuming. It’s best to do this face to face. Negotiation over the internet is not the best method. Trust is an issue and one gains trust by direct meetings.

The discussion of technical issues may also proceed through the trading company. This is can be a nightmare. I have wasted far too many precious heartbeats trying to noodle information from the end user through the mouthpiece of the trader. But from their side, this amounts to providing needed service to the customer.

It is difficult for western suppliers to penetrate the mind of customers in the east and discover how to market their wares in that part of the world. The trick for western business development people is to invest time and effort in understanding Asian trading practices.  Pick up some books on the topic. Go to trade shows and talk to Asian exhibitors. Read the trade publications.  Develop personal relationships.  Price wins the day, but trust is part of the calculation.