Business dealings are different in each of the world’s corners. some are more open, others would rather speak behind the curtain, but everybody compromises. If you can’t adjust, then there’s no point in transacting abroad.
My name is not important, but I live in China and the country has affected my attitude. It is feasible that you will disagree with me, but it’s also possible that I am right. You see, I take bribes—and I like it. Let me explain. I think it’s OK to accept a kickback from Chinese suppliers; I might perhaps go so far to say bribes could be an important condition for business growth.
While performing merchandising and procurement for a foreign company I have been approached, often over lunch or in a side room, by each contracting vendor—several times—as they extend a cash-back payment for every unit ordered. And for each time they asked, each time I said no, until curiosity got the best of me. I ultimately accepted and finally made some money. This new partnership has improved the dynamic of our business together; this ‘incentive program’ of which I am now a part of is now realized, and I feel justified in my doing so.
I have been working in manufacturing for seven years, meeting all types of manufacturers. I think it is well known that manufacturing in China is not always an honest business. Ask a factory if the goods are ready and they might say, “Yes, it will ship tomorrow.” All the while, they’re not even on the production line yet. Days later comes an excuse. There was a flood; there were power outages; a mistake was made and the order needs to start over.
I experienced dishonesty to a point that left no hope there could ever be a time in China without it. And then there’s guanxi-guanxi of I scratch your back, you scratch mine. For example, the purchasing department uses their power to send orders to a friend/family’s factory, or to one providing a kick-back.
I did not want to go down that road. Especially after I saw it destroy one factory where purchase orders sent to raw material factories, IT/networking services, uniform suppliers and assembly plants were all being placed to factories who were ineffective—causing delays, product defects and missed deadlines. Customers cancelled their orders, and in turn, the company couldn’t make payroll. Workers striked and quit, leaving nothing but a pile of debt.
From the very beginning of employment, I was approached by each and every one of my suppliers who wanted the same thing: to give me money for sending them daily business. I could make a certain percentage of the entire monthly shipment or request a pre-determined amount per unit sold. Vendors were lining up to give me money, but my goal then was simple. Find suppliers who could offer: competitively-priced goods; on-time delivery; and a lower than 1 percent defective rate.
That would make me happy. And it really could be that simple, but for some reason, none of my suppliers thought so. Over several years, they gave me ongoing issues. They always felt money would solve our problems. But like a gentleman, I always declined. I wasn’t like that. I had been educated. I wanted to show off my ethics. I wasn’t going to fall for their corrupt ways. I didn’t want to be brought down to that level.
But perhaps we all have a time in our life when we want to be naughty; to see if we can get away with it; to test boundaries. For me, it was time. I was at a point where I just wanted more—more fruit for my labor.
My justification was not simply, ‘This is the norm,’ even though that’s how my vendors claim it’s how work gets done in China. I thought about how I could justify this vice. And when working late at the office, I discovered sort of a loop-hole. I made a simple discovery that this particular supplier offers a very competitive price, so competitive that they are often $0.25 to $1.00 cheaper than my other suppliers.
From the very beginning of employment, I was approached by each and every one of my suppliers who wanted the same thing: to give me money for sending them daily business.
So, at a time when I was feeling rebellious this particular vendor approached me and said, “Hey, I have an idea. If you can give us more orders, maybe we can give you a percentage.” I said, “I don’t like to do it this way, but I will consider it. What did you have in mind?” He replied, “Depends on you. What do you want? Five cents each? 25 cents each? 20 percent of every invoice? Whatever you want, we can work it out.”
So I took the deal and now I am making anywhere between US$500 to US$2,000 bonus per month. It’s all factored by the volume of orders going their way. I opted to get an extra five to ten cents for each unit/part I ordered from them.
Here’s how we did it. I set up a bank account here in China and gave them my wiring instructions and they pay me every time a shipment invoice has cleared. It’s pretty simple. The first time after getting paid, I was blown away. All of a sudden, I had 10K of RMB in my account. To spend. On anything.
Some people may feel I’m still being dishonest because I’m siphoning money that should be going to my company. That is not exactly true. Had I not discovered this supplier, I would be stuck with my other suppliers who quote much higher. Then all that extra cost per unit is going to the vendor, not our company. But the factory that gives me this deal quotes low enough, I’m able to add just a smidgeon extra that goes to me, and not the factory. So even with my added amount from this vendor, the quotes I am turning in from this factory are still less than what I’m getting without a bonus from the other vendors. It is this that allows me to sleep restful at night.
I’m not being greedy either. I could technically be setting up this incentive program with all of our suppliers, but I do not. (I just dread what whirlwind that would get me into). What about when it’s slow and everyone is pecking for orders? I don’t want to deal with that.
It’s crazy that in the beginning, I just wanted a vendor simply to do their job—delivering said goods on said date, with a less than 1 percent defect rate. But the funny thing is, I wasn’t getting that kind of service until after I started receiving my bonus. Now, the goods come in on-time and rarely with defects. It’s amazing. They help expedite orders when needed. And when there are defects, they resolve the issue quickly. Somehow this arrangement has solidified our relationship. They’re following our orders very closely now, and because they’re doing such a good job, I feel justified issuing them more purchase orders.
I get the double satisfaction of having a more or less ‘worry-free’ vendor to deal with, and by increasing my disposable income. I should remind you, I have been a happy employee. Well, now I’m gleaming! This added bonus really helps my life. It gives me a better sense of self-worth. I can go on vacations and stay at nice hotels; I can buy better quality products; I can buy gifts for my girlfriend.
If taking this bribe has helped our relations so much, perhaps one could argue I should be doing this with all my vendors? Or at least try adding them one by one, to see if anything changes? Nonetheless, the question is, if it did help with overall vendor performance, perhaps one could say that taking a bribe is necessary to do successful business in China. And maybe I found a loophole that allows me to do it, and have a clear conscience.