- In business, there are basically two ways of quoting prices: the US way and the EU way. Among American businessmen, it is a widely held belief that negotiating down the price of something is a reflection of one's own prowess in business. Thus, sellers consequently tend to set their initial prices a little bit higher to allow for the fact that they will come down. In the EU, on the other hand, this method is considered to be totally unacceptable, and a person who does not give his best price to start with is held to be untrustworthy. Haggling and negotiating are frowned upon. The Japanese tend to follow the EU way, and expect people to give their best price right from the outset. Although there are among the Japanese some who are used to American-style transactions and business practices and do business the American way, generally speaking they are in a minority.
- It is in addition necessary to understand the secret of human nature of the Japanese in order to do business in Japan. The Japanese are generally warmhearted, and can be more easily won over by touching to their human nature. This does not mean to say that one should always take advantage of this weakness, but it is nevertheless true to say that appealing to people's human side is one key to business success in Japan. If someone they do business with is ill, you better show your concern by sending get-well cards and visiting them in hospital. If a business acquaintance's son or daughter is getting married, you better send congratulatory telegrams (or a card if you only found out about the wedding afterwards). Showing cordial friendship to acquaintances in this manner is far more effective than entertaining people and giving them gifts. In order to do business in Japan, therefore, it is suggested to people's human feelings.
- It is also important not to leave any points vague when one signs a contract. Problems that could potentially arise at a future date should be properly taken into consideration before signing a contract. There are cases, for example, where business breaks down because the foreign seller had assumed (though not confirmed) that because he paid the air charges for samples, the buyer would pay the air charges for the actual order. There are also instances where the producer starts production before receiving a formal order and without finally confirming with the buyer in Japan, and consequently producing twice as much as actually ordered and having to keep half as stock. This underlines the importance of thoroughly confirming everything.
- The Japanese do not like to be pushed when doing business. It is perfectly understandable that one should be keen to increase one's business, but simply continuing to push potential Japanese customers will only yield negative results. The Japanese as a whole dislike being pushed, and it is not good strategy to push them to buy a certain product or a certain quantity, or press them to buy something straightaway at a certain price. If they need something, the Japanese will buy the necessary quantity in accordance with their own plans. They do not normally make impulse buys because the price is cheap or delivery is quick, and once they have decided on a source, the Japanese will generally stick to it.
- When doing business in Japan, it is necessary to be able to provide long-term, stable supplies. Japanese buyers do not want to make spot business, but instead aim to enter long-term business relationships built on trust. Accordingly, prices need to be maintained at a certain level for a certain period. Especially when products appear in the catalogs of major makers and wholesalers or when incorporated into customers' marketing plans, it is necessary to provide supplies and maintain prices at the same level for at least a year.
- As was mentioned in a previous issue in relation to Japan's strict quality standards, it is considered a matter of course in Japan that products and shipments should contain "zero defects". The attitude that if products are manufactured in bulk there will inevitably be one or two defective products is unacceptable in Japan, where the belief is that if one buys 10,000 pcs. it should be possible to use all 10,000. In the case of products where defects will inevitably arise, the percentage of inferior products should be discussed right at the beginning (before signing a contract) in order to reach a mutual understanding before proceeding to do business. Quarrels and differences of opinion should be settled sooner rather than later.
- There are some foreign companies that seek to sell ten or more types of products in Japan at one time. This is particularly true in the case of trading companies that do not manufacture their own products. It is quite understandable that they should want to increase the range of products they sell to have more business, but this all-round "jack-of-all-trades" approach does not go down well in Japan. What such companies should do is start by offering the items that they are most confident in. Just as the Japanese saying "chase two rabbits and you will catch neither" goes, such a policy frequently ends in failure.
It is important to do things carefully one at a time. One should therefore determine one's priorities and develop an appropriate sales plan on this basis.
- It is also not a good idea to peddle the same goods all over Japan. It is first best to seek out the most appropriate buyer or distributor for one item. If one should be so fortunate as to find such a company, one should liaise closely and cooperate with that company and work together to nurture demand for that product in Japan. If the company in question appears to have marketing ability, one should sign an exclusive distributorship agreement with it. Start small and grow big.
- It is of vital importance that one should at least prepare materials (such as a corporate profile, photos and a catalog detailing the products you wish to sell) in English to give your partner in Japan in advance. (If one can provide materials in Japanese, so much the better.) Catalogs are of such importance that they are called as "silent salesmen". It is a waste of time and effort to press companies to buy a product without preparing a catalog of products and details on your own company. What one first needs to do, therefore, is thoroughly profile one's own company and the products one wishes to sell.
- Japanese particularly dislike having to change or abandon plans at the last minute. There are many people who would quite coolly cancel a meeting (e.g. at a certain time on a certain date in Osaka) two or three days beforehand saying that some urgent business had cropped up. However, a Japanese business partner who has set aside and made preparations for such a meeting will be forced to wonder whether his own meeting was so unimportant in comparison with the other "urgent" business and whether promises and engagements with him can always be broken so easily. This will obviously result in a loss of trust. Though it is generally considered acceptable to change plans in very exceptional circumstances (e.g. due to the sudden death of a relative), a promise or appointment once made should always be kept.
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