Learning about the oil and gas industry in China

I finally got in touch with what I expect to be my major client. It has taken a long time to get this far and we still haven’t signed any contracts or agreements.

I do have some work to do first.

I need to understand the oil and gas industry in China. This is the area of their international business that they want to focus on in China. I think that this is a good area as well. In north-east where I am, there are many oil and gas companies.

I have sent a couple of requests to my network asking about information and I did receive a note back from someone whose wife’s family has over 30 years experience in the industry in China. I will hopefully get a chance to talk with her and maybe get some introductions which will help move the process forward.

I will also do some research on the firms in the area and try to gather as much information as possible from government and private websites.

Hopefully this client will get on board after a long process ad time.

How can we help you?

In this economy and business climate, it is not often you hear the expression “How can we help you?”

While, now you will “hear” it from me.

As a buying/sourcing agency located in Shenyang, China, how can we help you to enter this market or to use suppliers from this market?

What qualities are you looking for in an agent? What would you expect to pay as a fee? Would you prefer to work on a straight commission basis? A pure retainer basis? A retainer plus commission basis?

What would be your expectations of a commission schedule? Would you base it on Total Contract Value (TCV) or a fixed commission no matter the TCV? Would it be sliding scale that depended on the number of times you used the agency service?

What about the retainer? How much is too much? What services would you expect to be provided if the agency was put on a retainer?

What has been your experience in using agents? What have you liked? What have you disliked?

Your feedback is very important to me and my agents. We want to be able to provide the best support for your business. When you grow we grow.

Let us know your thoughts, likes, dislikes etc. Contact us in confidence at sales@mwbuyingagency.com

Integrity, trust, value and service

Possible new clients

I finally got in touch with a referral about buying tires from China.

We talked and I got some background information. I will do some preliminary work here and provide him with the information. I hope that he does go forward with the contract.

Right now he can only bring in a ½ container when most companies want a full container as their minimum order. He will try to get another company to split a container.

I did a quick posting to a buy/sell website and received some good responses that may be okay. I do not know these companies so if my potential client comes on-board, I will make arrangements to visit their locations.

I also talked briefly with the contact in the other company that I will be representing.

He will pass my name to a client of his who may contract with my company to be their agent in China for his imports.

Some irons in the fire, now they need to get hot.

Back in the game?

It has been a long slow process to get this business going. I have had many starts and stops. I thought I had my clients lined up and then something happens that they decide not to enter the market.

Yesterday, I had a conversation with a partner. One of the businesses I had talked to before really wants to have my business help him to enter into the Canadian market. It appears that our previous conversations had been misinterpreted and that is why we didn’t move forward.

This is the flower grower.

The business model he is proposing is not the model I proposed to him. In talking with my partner, we have decided that we will talk with the grower to see if we can get to a common understanding. I may have to modify my model a little bit. If this is what it takes to gain a start in this area, then I will make the modifications. They are not too far away from my original model so a small change will be acceptable.

I have to be a little flexible. China does do things a bit differently from the west.

More potential clients, not confirmed yet, but potential clients

A contact has introduced me to a company that was trying to import from China but got involved with an agent that wasn’t looking after the client’s interest. That is about all I can say when the agent starts to raise his rates to a point where the wholesale price to the client is greater than the retail price of the product.

I have sent the potential client my information and hopefully we can at least talk about my becoming his agent in China.

I also received a note from a networking associate. She had given my name to a friend who does business in Hong Kong. The friend is interested in my business as well.

You have to think that anytime a business in Canada can save travel and hotel expenses for trips to China and Hong Kong that having an agent on the ground would be a big selling point.

I will wait to see what the outcomes of my messages back to the contacts are before doing any work or planning.

I am known, now I need to sign contracts with clients.

New opportunities?

There was an announcement about the area I am in becoming an experimental economic zone. This opens up many possibilities for companies to come into China.

There may be investments in infrastructure as well as opportunities to build plants and other offices to do R&D work.

I contacted my network to pass this information along and will see if anyone responds back.

I will also try to get more information from the Trade Commission. I need to be a representative of Canadian companies in order for them to talk with me officially.

So just a short post.

Contacts and markets and agreements

I have received some emails from various material provides asking whether I would like to help them enter new markets. As a buying/sourcing agent, of course I said I would like to help.

Many of these requests are outside of the country that I really wanted to concentrate on, but I still believe that they would be good for the business.

I will continue to connect with these companies and do some preliminary market research. The question now becomes, when do you stop doing the research free of charge?

Since these were the first emails that we exchanged, and I do not know the market for their products in Canada or other areas, I do not want to talk about fee structures just yet. If we settle on a contract, and the market just isn’t looking for their product, then they may feel that they have wasted their money and time and my company starts to earn a negative reputation.

I understand that you cannot guarantee anything in business. There are always things that could negatively impact the working relationship. I do believe that by doing a little upfront no charge investigation can pay off in the long term by building a solid relationship with the client.

Still moving slowly, but at least we are moving

My contact in Canada returned and said that the CEO will be traveling to the Middle East then going through China. I will have a chance to talk with him before he heads back to Canada about the China business model.

I also contacted some people to try to see if they can be connected. Their information came from emails and networking sites.

Part of this business is trying to arrange the meetings between businesses. Unfortunately, this is a bit complicated as they are separated by an ocean or two.  Still, the rewards will be worth it once I develop a steady list of clients.

Not much else to discuss. Hopefully the marketing material will arrive soon and I can get this business area working.

Getting back on track

I heard from my contact in the Canadian business that I will be representing while in China.

He was away and couldn’t respond to let me know what was happening. He hopes to get the marketing material to me soon. He mentioned that the CEO of the company will be traveling to China soon and will contact me to discuss the China strategy.

We may concentrate on one particular market or enter many markets. My thoughts are that we will concentrate on one market, probably the oil and gas services industry. That is where this company started in the Middle East, which is their strength. As well, China needs to develop and is developing its domestic oil and gas industry as well as participating in the African oil and gas industry. There is a lot of opportunity just in this one industry to capitalize on.

I know that this relationship will be very profitable for both of our companies. I just wish that the profitability started a little bit sooner.

Slow progress being made

The buying agency has not as busy as I would like.

I have been searching the websites and sending marketing material out but so far the response rate has been really bad. Either the material is not catching people’s attention and needs to be reworked; or the people who post the requests are not really that interested.

I will continue to send materials out and research potential clients.

This week I will review my marketing material and make adjustments and send the new material out as well as the older material to see if the changes work any better.

This market is too large not to have people using a buying agency. Many of the companies cannot afford to have someone travel into China and stay for an extended period of time.

A short post but I needed to say something.