5 Steps to Successfully Dealing with Chinese Suppliers
After you attend Canton Fair or HK Show, you collect many contacts for a potential supplier in China. What to do the next? Follow below five steps to successfully dealing with Chinese suppliers.
1. Develop the Relationship
The first step before striking a deal with a supplier is to reach out and request samples of the specific product. Not only does this allow you to get a hands-on feel of the product, it helps both you and the manufacturer agree on the product requirements and cost. Oftentimes, language and cultural differences can slow down the communication process, but it’s vital to iron out these details upfront before placing a large order.
2. Perform Due Diligence
Once you’re happy with the product, it’s important to perform background research to make sure you’re dealing with a reputable company. There are several free resources available online that allow you to find blacklisted companies throughout China, although these lists may not be updated regularly. For more comprehensive results, consider hiring a company to perform a factory audit. A simple factory audit takes just one day and the cost is affordable. This is an easy way to avoid scams and make sure the factory has the experience and capacity to manufacture your product.
3. Negotiate Your Contract
Once you’ve finalized your vendor and price, there are still several details to iron out; most importantly, your payment conditions. While there are several options, never fully finance your purchase order in advance. Instead, consider paying a predetermined percentage upfront (typically 30%) followed by the remaining balance when the order is completed and the inspection result is PASS. Line up a proper purchase order outlining your product, labeling, and packaging specifications, as well as a product checklist if applicable, terms of purchase, and a quality control plan.
4. Finalize Approval Samples
After finalizing your contract, it’s time to get a final product sample. Request one for you and one for your quality control company. This step prepares you for production by confirming the color, shape, functionality and feel of the product as well as identifying non-conformities and deciding which are acceptable.
When necessary, plan to perform any necessary laboratory testing to ensure the product meets any applicable local and international regulations. After all, you don’t want your shipment to get rejected at customs (for regulatory non-compliance) or by your customer (for bad quality).
5. Create a Quality Control Strategy
A strong quality control strategy aims to detect defects throughout the production process, which is why it’s critical to partner with your supplier. In reality, quality control benefits both parties because suppliers can successfully complete purchase orders and you are happy with the final product.