There are a range of things to consider that make importing from China much more complex than ordering from local suppliers.
Here are our 7 tips for successfully working with manufacturers in China.
1. Go to China, get to know your manufacturer personally
Don’t rely on email. Your best long term risk strategy is to make a trip to the factory, dine with key staff and seek to understand each others business goals. If issues arise, your personal relationship with the boss will help you much more than a written contract.
2. Learn to Build a Supply Chain
Never build an import business around a single supplier in case circumstances change or the relationship turns sour. Keep communication channels open with several suppliers to keep on top of pricing changes, new products to market and minimise your supply risk.
3. Navigate Minimum Order Quantities (MOQ) Issue
Most factories require a minimum order per SKU (Stock Keeping Unit) which greatly restricts the range of products you are able to offer, based on the funds and storage you have. This is a major area we can help to negotiate for you because it is very difficult negotiating lower MOQ’s online and with manufacturers you have not met.
4. Develop an Import Risk Management Strategy
Best to learn from other peoples mistakes, not make them yourself. Knowing what can go wrong, why and what to do is essential preparation for starting up. Our risk management coaching helps you identify and address foreseeable issues relevant to your business.
5. Be Prepared to Re-Sample and Re-Test Products
A crucial part of the ordering process for pre-empting manufacturing and supply issues. Factories often charge a premium per product unit sample but a sample is made at a different time from your main order and possibly not produced from the production line, rather made from hand or short order. A sample is a good guide to market and quality test your product.
6. Product Quality Inspections are Essential
A quality inspection gives you the opportunity to reject or request changes to a shipment prior to paying the balance of invoice, but does not offset your quality risk. We always recommend a quality inspection when importing products from China, just be conscious of its limitations and use an inspection as one part of an entire quality management strategy.
7. Deal with Translation and Cultural Interpretation
Language translation can overlook context of the discussion, so it is critical to look at some of the reasoning behind cultural misunderstandings:
- Many overseas cultures will avoid saying “no”, to avoid confrontation and loss of face, leading buyers to think their negotiating partner is more agreeable than they really are
- Many Western businesspeople may become offended when the asking price is excessively inflated. Pointing out this discrepancy and achieving your target price without causing the other party to lose face requires exceptional communication and people skills – particularly across language and cultural barriers
This is a taste of My Import Label’s entire import export learning program, get on board and deal with overseas manufacturers professionally in less than six weeks.
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by Craig Ford
7 Tips for Working with Manufacturers in China
My Import Label
Effectively Working with Chinese Manufacturers