If you own a small business and are looking for reliable factories to manufacture your products, then China is the best option for you. China is a popular manufacturing hub due to its low labour costs, many businesses, big and small rely on Chinese suppliers for producing their products. If this is your first-time manufacturing product in China, then it is natural to be confused about which suppliers to choose.
Be a smart researcher
When it comes to any suppliers, you cannot rely on everything that pops up on the internet. Many suppliers might update misleading information that can result in scams and frauds. You can search for your suppliers on credible sourcing platforms such as Alibaba, Global Sources, and Made-In-China.
You can key in your requirements and choose from the list of suppliers as per your preference. Some platforms also have green ticks against verified suppliers that make it easier to verify their credentials and contact them. Websites such as Alibaba have a list of blacklisted companies which you can use as references to verify the real from the fake ones.
It is always better to visit China and attend trade shows and exhibitions. This allows you to talk to the suppliers personally and enquire about their production capacity, materials, and the technologies they use.
Another way to search for sourcing companies is through social media presence. Websites like LinkedIn and Alibaba have forums and blogs that can help you in reviewing suppliers. You can even check the reviews offered by existing businesses and then take the right decision.
Your work does not end by finding the supplier. You need to verify their credentials thoroughly. Some of the checks that you need to do are:
- Check the company’s registration through a local government agency.
- Ask for a copy of their certificate of authorization.
- Request for the financial statements from the suppliers.
- Ask for references from their clients.
Now, that you have verified your supplier, you can either buy directly from them or any B2B platforms. If you want to save time and money, you can opt for purchasing directly from the sourcing companies.
If you want to buy products in small quantity, then you can look at trading companies. These companies will purchase the materials from manufacturers and sell them to you. The only downside to this is that you might end up paying more than when it comes to getting them manufactured by suppliers, as they will include their margins as well.
It is always better to ask for product samples when you work with suppliers. Be transparent in what your requirements are such as the quality of material, size, dimension, and packaging. Give the supplier a small batch to manufacture. Ask them to share the sample.
Looking at the sample, you will be able to judge the capability of your supplier. If the product requires some changes, you can get them modified and altered after discussing it with your supplier.
Ensure that you have all the terms and conditions listed on your contract. Details such as project completion, raw materials used, assignment of roles and responsibilities along with the labelling and packaging details need to be mentioned. Have the contract vetted by a local lawyer to avoid any last-minute surprises.
Leaving the groundwork to reliable China sourcing consultants
If you are unsure about finding reliable suppliers for your business, you can always consider Chinese sourcing service, hire a local sourcing consultant to do the job for you. Sourcing consultants act as a mediator between you and the suppliers. They will find a list of suitable suppliers for you through their networks, negotiate on your behalf, and put forth your queries to the suppliers.
Let us see how a sourcing consultant present in China can help you to address the challenges that you may be facing from time to time during China sourcing.
1. Help you to verify your supplier
Before you start to find factories in China, it is important to search for a few potential suppliers of your product that you want to import. If you simply do this process with help of email letters and telephone calls, then there can be many information gaps that you may not be able to anticipate. Remember, the Chinese business environment is entirely different from your country. Hence unless a China buying agent is available on your side, you may continue to face problems off and on.
You may initially identify a few potential sources in China through the Alibaba website or by reading reviews about the company. Thereafter, you can communicate and ask for the quote through email communication.
However, you need to inquire about the following few more things before you finally approve your supplier in China.
- Checking their business license where the scope of business must include the word “manufacture” or “producer” if it is a legitimate factory.
- Asking for a VAT invoice that only a registered factory will issue them. After receiving that you need to check that the name of the business is the same as that of the license.
- ISO 9001 certification in case your prospective supplier is certified, then the company is likely to be a factory.
- Minimum order quantity of the supplier as most trading companies often poses as manufacturers and be ready to offer a smaller quantity too.
- Clarity about the product is also necessary as often due to the language barrier your supplier may misunderstand your requirements despite offering the quote. Such misunderstandings can be too costly for you if not clarified with the help of your Chinese sourcing consultants.
2. Understand the Chinese market
Many often the delay in supply from China takes place due to a few holidays prevalent in that country due to which a factory may remain closed for several days or even a month. Such long holidays can always disrupt your supply and if you are not aware of this fact, it is going to be a total surprise for you.
Even in the western countries a similar situation arises during festive months and hence you cannot complain about it. Some of the important holidays that you need to keep in your mind are as follows:
- New Year’s Day
- Chinese New Year
- Qingming
- Labor Day
- Moon Festival
- National Day.
So, you need to be proactive and cannot blame the supplier for late delivery if you are not posted with such information. Any Chinese sourcing consultants will never miss that and can help you to plan your production well ahead of time.
3. How much advance you must pay
We all know that China is one of the cheapest manufacturing countries in the world. However, when you are making a business relationship with any Chinese company for the first time, you need to pay certain advance money.
You must keep your supplier motivated by offering an advance amount, particularly on your first order so that he can maintain his profitability. Paying an insufficient advance amount can always demotivate your supplier and quite possibly they may give low priority to your order. A Chinese consultant can surely offer you the right advice.
4. Maintaining relationships with your supplier
In China, maintaining a good professional as well as personal relationship is very important, so that they may not feel uncomfortable dealing with you.
Being friendly with them helps you to extract much other miscellaneous information like possible delay in supply or some other important details that may be useful to you. A Chinese sourcing consultant is usually hand in glove with all Chinese suppliers and that helps their business too.
5. Follow up
Sitting in thousand miles away from China, you cannot do a proper follow-up with your Chinese suppliers unless you pay a visit to the factory. Surely, you cannot pay a visit to China every now and then. Following up by email and telephone may not be good enough as much information may remain hidden from you. Here a Chinese sourcing consultant can be of immense help.
6. Often you need to compromise
There can be a situation that may be beyond the control of your supplier, where sometimes you will be forced to compromise with the situation.
You may often need to swallow your ego and try to listen to your supplier to know the real issue. Quite possibly they may ask you to relax the specification or make certain small changes in the specification. You can take the right decision after discussing it with your sourcing consultant as he may be more aware of the right reasons.
7. Making a contract
For large orders or any order that will continue regularly, it is essential to hire any Chinese law firm so that he can help you to write a suitable contract that is valid as per the laws of China. A sourcing consultant on your side can be of immense help while creating a legally binding contract for you.
How can your sourcing consultant help monitor the production progress?
As already discussed, it is very important to evaluate your Chinese supplier before you are going to place your order. However, equally important is that you need to monitor the progress of production of your product from time to time. There are a few checkpoints that you must establish so that it can help you to monitor the progress of production in China while sitting in the USA or Europe.
You must be able to discover certain abnormal factors that are going to influence production efficiency by monitoring production progress so that you can ensure that your products will be shipped to you with the right quality and quantity on time as per the agreement. Every production industry may have different norms and strategies by which they monitor their production schedules, however, the key points will mostly remain the same.
Your sourcing consultants can be an asset for you to perform the production progress monitoring because they can visit the factory personally and monitor the situation much before the production activity starts and during the production.
The following are a few pre-production monitoring activities:
- Checking the production plan.
- Checking the status of material planning.
- Checking the status of manpower availability.
- Checking the product information status.
All these need to be very closely monitored and from time to time you need to ask the supplier a few relevant questions to get a confirmation. Very close contact will be necessary with the supplier, which is only possible if a local sourcing agent is available to you.
If you try to do that from a remote location in your country, then the suppliers may offer you an answer as convenient to them and you will never know the real situation. If the factory has misled you, then you may often get into deep trouble and your reputation before your customer becomes very poor.
However, with certain Chinese sourcing consultants you can get the right advice and anticipate the problem well ahead, and you can put yourself in a much better situation and mitigate at least some of the risks as far as your manufacturing process, shipping, logistics, and much more are concerned, while directly sourcing in China.
If you have ever dealt with any Chinese company for manufacturing products in China, then it is a very common thing to find time and again the Chinese suppliers failed to meet their commitment about delivery time. They may tell many good reasons for the delay like shortage of manpower, equipment breakdown, vendor supply delay, and so on. Since you are far away from China and hence may not be able to know what the actual reason was.
Therefore, appointing sourcing consultants in China can be your best solution to at least know the real story and obtain advanced information so that you can be proactive enough to find an alternative plan to procurement.
Conclusion
Business is a win-win situation for both you and your supplier, hence it is necessary to keep a good relationship and keep them happy, then they too will give their best support and a sourcing consultant can play a very important role. Applying the right tactics can help find the right suppliers for your products. Ensure to focus on the quality factor rather than the cost to improve the efficiency of your business.
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