Do you understand the Buyer-Seller ABC's? I'll provide some examples that illustrate its direct impact on the Seller, and more subtle ramifications, or Guanxi.

Buyer-Seller ABC's. Buyers establishes categories and priorities for mainstream items they procure and these are generally grouped as A, B, or C items. Those categories are largely based on the average selling price (ASP) and availability of the item. With category C being a readily available commodity item, and Category A might be a sole-source item. Imagine that Seller A provides a $200 item which is on allocation, and Seller C provides another different item that can be bought for under $6—which Seller gets the bulk of the Buyers attention, time and cooperation? The sketch below illustrates this relationship between ASP and Availability.

The table below provides some of my experiences in the Buyer-Seller ABC interaction:

Importance to customer. When you lack this, it reminds me of pushing a rope; not a very productive activity if there isn't someone on the other end—pulling.

Access to senior management. May not prevent your success, but makes it more difficult to achieve.

Ability to become Preferred Supplier. Achieving a design-win may be a mute point, if you can't become a Preferred Supplier.

Easy agreement to social meetings. Building a long-term relationship involves informal meetings, outside of the office.

Inclusion in Customer Supplier Meetings. These meetings are great opportunities to meet cross-functional management contacts and better understand customer needs.

Intra company introductions. Growing business with an existing customer requires meeting more people; doing it alone can be done. But, introductions by someone within the company will provide an implicit recommendation, to the 'right people', and greatly speed this activity.

You provide 'good Guanxi'. Pronounced "gwan-shee", it is an important concept in Chinese culture. Though the direct translation of guanxi is "relationships", the concept as it is used and applied in Chinese culture is much richer and encompassing.

The reciprocal nature of guanxi and its implied obligations is a major reason why Chinese are reticent to engage in deeper relationships with people they do not know. To begin such a relationship may put you in a compromising position from which it is difficult to withdraw. Additionally, to establish guanxi with someone who later proves unworthy will also tarnish that party’s reputation, so the Chinese would rather not begin a relationship with someone they do not know. Finally, in establishing guanxi, the individual may want to know up front what they hope to gain from the relationship, to insure they are not contributing effort or services without gaining something in return

My experience suggests that Buyers around the world are more willing to spend time with Sellers of 'A' category items. These category 'A' Sellers, are frequently well known Fortune 500 company's. It may just be human nature that suggests more of an affinity for these sometimes glamorous company's, or maybe good guanxi due to a perception of lower risk, and/or higher gain.

When doing business worldwide it is paramount to understand that cultural differences exist. Asia in general is much more sensitive to the relationship posed by your: company, title, and position within that company.

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