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Posts Tagged ‘suppliers’

Suppliers going back on their word (Part 2)

December 5th, 2011 No comments
Give an inch...

Give an inch...

(Have you read Part 1 of this article?)

By this point, the overseas purchaser has been let down dreadfully by the supplier and had to compromise their margins in order to have their goods released. But it got worse. When the CI (Original Paper Commercial Invoice) and COO (Certificate of Origin) were requested from the supplier, they refused to do even this stating that it would cost yet more money to produce these documents and therefore not worth it.

We explained that in order to export the products these documents were required from the manufacturer. This was met this time with abuse and a refusal to have anything else to do with the matter. The aggression showed by the supplier at this point was typical to a kneejerk reaction by a lot of suppliers when their back is at a wall and they have gone so far that even though they are wrong, they don’t want to lose face by admitting it or even compromising.

Luckily my time in China has allowed me to meet some influential individuals in the export and customs world here and we were able to get some documentation to push the order through customs and onto the ship for our client. This documentation was also enough to comply with import, customs and duty purposes when it arrived at its destination port. Doing it this way should of course always be a last resort.

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Suppliers going back on their word (Part 1)

December 5th, 2011 No comments

Recently I was contacted to assist in a case whereby a Chinese supplier had decided to change their mind about delivery terms on an order. This was post-production and while it was held at a 3rd party shipping agent. Initially, a quote was supplied to a European purchaser that was priced for FOB, Chinese port. These terms were accepted and the ordered processed.

Somewhere between ordering and before loading onto the vessel at the port, the supplier decided to change their mind and claim that this was no longer FOB and were only prepared to pay a small courier fee to the shipping agent. Not only did they do that but they also refused to offer a Commercial Invoice and Certificate of Origin – two documents that are critical when exporting from China and importing into your own country.
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Chinese Factories: Samples, Samples, Samples

August 29th, 2011 No comments

When you order samples from a Chinese manufacturer at any stage, it goes without saying that you, as the customer, expect to see a close to final product with small exceptions that only mass production can achieve.

Very often a buyer will accept that a mass production item will/should look like the sample they received. This is a fair assumption but unfortunately, more often than not, this is not the case.

If the correct and detailed drawings are supplied from the beginning, this can eliminate further interpretation by the manufacturer. If you are developing a product straight from the factory the supplier holds a certain amount of creative control over the process. This often leads to the supplier telling you what can and can’t be done in their opinion, or based on what’s easier for them in the short-term.

In my opinion samples differ from the final product because of shortcuts and interpretation of the original design. It’s a lack of clarity and communication that is unfortunately common when dealing with Chinese suppliers, due largely to language and cultural barriers.

If you want to ensure that you are getting the product you approved and expect, it is an advantage to look for ways to be represented at the factory during this process. It’s very important to get design files and make sure that the drawings you have are adhered to at all times. It’s about eliminating as many possible avenues for interpretation as you can.

Every order from then on should be checked to make sure that the product remains as close to the original approved sample as possible.

Dealing with Chinese Factories – Can they produce your entire order in-house?

July 13th, 2011 No comments


Smaller Chinese factories commonly outsource orders that are too large or are stretching their capacity. These factories would generally not tell you this and so without proper representation on the ground you will most likely not know this.

The outsourced factory may be producing highly inferior quality to the standards that you thought you were getting, based on the initial provided samples. A factory may buy the whole order’s worth of raw materials and hire outsourced factories to fabricate it. There are a few reasons why they could be doing this – This may be as a cost saving measure. They may be trying to develop relationships or guanxi with another factory. They may not have the facilities in-house that they promised you. Or they may be bartering with your business to make use of additional factory facilities or machinery in the future.

Considering the above, ask yourself these questions:
 
- Is it important to know that the factory/supplier you are buying your products from manufacture your order elsewhere?

- Is it ok that your products are being made in a place you haven’t been told about or inspected before?

- If outsourced facilities seem to make the same quality products as per your order, does that make it ok that your products are being assembled in unknown locations?

- If completed order arrives at your destination and there is a marked difference in quality from your expectation that hasn’t been properly explained, the root cause could be an outsourced factory. Would your supplier tell you this? Wouldn’t you want to know this information?

If any of the answers to the above questions make you feel uncertain about the standards of your production in China, having a 3rd party representative on the ground can assist you. Inspecting the factory and the above aspects can help you get a firmer idea of what is really going on, allowing you to make more informed decisions.
 
Visit the official ETP website for more information on sourcing products in China.