Taking on the dragon?
Sourcing from China for the first time can be a daunting experience.
There are many cultural and language differences as well as huge differences in business mindsets. These combined issues can put you on the back foot from the start and put the supplier at a much more advantageous position.
This can easily negatively affect the result of your negotiations, both in terms of price and product quality.
Consider appointing an agent for you in China, who has local knowledge, experience and connections that can put you at an advantage over your new suppliers and your competition.
For a more detailed look at sourcing from China, take a look at some of our earlier articles, including:
Developing your products with existing Chinese manufacturers
Read more…
Ex-works means that the product is available for the purchaser to take custody of the goods at the factory only. The purchaser has to pay for all expenses to get the goods to their destination address.
The purchaser can do this whole procedure themselves but it is highly advisable and both economically and time efficient to enact a shipping agent or freight forwarder to take care of this for them.
Small Chinese factories offer lots of pros and cons, and it is important to weigh these up before taking a leap with a supplier. They can give you the attention that a large factory can’t. They can spend extra attention to detail on your products, but smaller factories cannot turn an order around as fast as a large factory and they cannot produce very large orders in a short time.
They will also have a higher overhead overall and their stock material purchasing prices will be higher due to the smaller facility/smaller storage. If product and component prices are cheaper than a larger factory, then it’s worth looking closely to the quality of the purchased materials and ultimately the end product.
If you are an SME or on a budget it’s tempting to use a smaller Chinese factory if you are satisfied with their product. There is that level of personability that makes them easier to deal with and a willingness to work with you in order to grow their business.
If you choose to go with a smaller production facility make sure you have and control of all your product drawings, samples details. This will allow you to more easily move to new or additional facilities if the need arises due to order demand or better prices. It is also a useful leverage tool. Knowing that you have relevant information to do with as you please, the supplier will be more incentivised to keep you happy and keep you from talking to their competition.
For more conclusive advice on how to manage your order in China, visit our website for a free sourcing and manufacturing consultation and quotation.
