What to Look for in a China Sourcing Agent
Are you planning to develop a product through China sourcing? You don’t want to choose just any China sourcing agent. Having the right China manufacturing plan and product development company in place will make the process go a whole lot easier.
China product development is the wave of the future. It’s the easiest and most cost-effective way to get a product to market. If you have a specific prototype in mind, and you’re looking for product development in China, pay attention to what we are about to say.
There are number of things to look for when sourcing in China. We would like to share a few key points with you today to help you better understand.
Let’s take a look.
Is the Price Right?
When working with China manufacturers, one of the first steps to take is to determine if China outsourcing is going to be the most effective way to develop your product. It’s possible that it just might not be worth it to go through with development.
Top-notch China outsourcers will help you determine if it’s worth it to develop your prototype. They will work with you to come up with a cost-effective solution to help get your product to market after development is through.
Outsourcing to China and Quality Control
Some people feel that sourcing from China is a fool’s errand. They are afraid that poor quality control measures will be put in place.
There’s no question that some sorcerers are definitely going to be better than other, but there are plenty of companies putting out quality products at an affordable price. It’s a matter of taking the time to do your due diligence. Find a company with a great reputation, work with them to come to an agreement and have them create your prototype as quickly as possible.
Last but not least, customer testimonials are always a great way to determine if a sourcing company will meet your needs. Look at past customer experiences. Pay attention to what others have said about the manufacturing process, and see if their experience meets your criteria.
In the end, it’s not difficult finding a top-notch China sourcing agent. Put in the time, do the work and everything will come together in the end.
Best Product Development Company for China Sourcing
Are you looking to create a specialized prototype for your product? You’ll need access to a product development company to make it happen. To pull this off correctly, it’s important to have management and specialized support in place.
We’ve been helping companies for many years, and have been creating new products for manufacturing for a long time. We understand the procedure. We know what to do. And we know what to emphasize in order to proficiently develop your invention the way that you expect it.
With that in mind, let’s look at our complete process for product development in China.
Product Development Complete Process
With China sourcing, and China manufacturing, there is a series of steps that must be taken during product development. They are:
1. Defining the China product concept
During this stage, it’s necessary to understand the product needed to be developed and client needs. Throughout the first step, your China sourcing agent must study whether or not the product is cost-effective to develop. We will review intellectual property rights and make recommendations about the best way to keep your original design guarded.
2. Appropriate factories must be defined
Throughout this stage, the China manufacturers will begin investigating factories to work with. Sourcing in China should be based on cost, experience, quality, reliability and other factors.
3. Prototype creation
Once the customer has determined the factory or factories to work with, it’s time to begin the prototype. This stage will include AutoCAD, molds, sketches, completing condition sheets, etc. and then the prototype will be manufactured by the factory. This is the most work intensive phase throughout the process, and consists of ongoing troubleshooting.
4. The approval stage
The developmental phase comes to an end during this stage. The prototype is created and the customer will approve. Once approved, it’s time to move on.
China outsourcing can certainly produce a product or products based on your specifications. When outsourcing to China, understand that product development and research is the key to overall success.
China manufacturing competencies have become more sophisticated as quality control measures improve. Our in-house engineers can help in the creation and development of any product. Once product development is through, you keep all rights and possession of all sketches and certification used during the entire project.
More businesses are realizing the benefits of utilizing China sourcing to both reduce production costs and increase sales. China continues to grow economically, producing a larger middle class that is eager to buy from China as well as from outside sources. Wages are still below average compared to US and European standards so savings are available in the employment area.
Also, the Chinese government continues to open its eyes to the benefits of companies doing business in China and, therefore, is easing tough laws and regulations and making it easier and more lucrative for businesses to move their operations to the country.
If you are interested in outsourcing a manufacturing project, here are a few tips offered by China-Direct that will get you started in the right direction.
Decide on What Products Will Be Outsourced
You should first determine which products are the targets for manufacturing sources. Practically any product can be produced in China regardless of whether it requires metals, plastics, cloth, or any other type of manufacturing material to create. If you want to have computer components, clothing items, sports equipment, children’s toys, or whatever product manufactured by Chinese factories it’s absolutely no problem.
Also, it should be encouraging to know that most products can be manufactured at a savings of up to 60 percent. The amount of savings you incur will depend on the product, but the average savings lies between 15 percent and 20 percent with some reaching as much as 60 percent.
Enlist the Help of China-Direct
Although you could strike out to China and try to make deals on your own, you would most assuredly not get very far. The reason is that doing business in China is completely different than doing business with other countries. Also, it is a huge country with a tough government and strict regulations that may not only seek to hinder you, but could easily take advantage of your lack of knowledge of their customs and ways of conducting business.
By utilizing the services of China-Direct, you will obtain fast results in setting up and starting your Chinese production facility. In most cases, we can have you set up and running in under a year’s time and usually within several months. Again, the amount of time that is required is dependent on the product you want manufactured.
The reason we are so effective in setting up production of China products is that we possess both the knowledge of the country and customs as well as the connections to move past roadblocks and obstacles. Taking advantage of our experience in the Chinese markets and communities will save you time, expense, and a great deal of problems.
Contact us today for more information on obtaining a China manufacturing partner to produce your product or products. The behemoth of a country continues to rapidly open up to foreign investment providing a wealth of opportunities for those who are savvy to jump on them.
Some companies doing business in China don’t believe that there is a need for contracts with their counterparts. Some will say that the Chinese won’t follow the contract terms anyway, while others insist it would be futile to try and enforce them in Chinese courts.
However, there are some very good reasons to draw up contracts with those you are doing business in China and here are some of the top ones.
Doing business in China can be a difficult task for various reasons. First of all, there is a language barrier that is a constant struggle. Also, the Chinese see business differently than most western countries so problems can arise with misunderstandings in management, supply, manufacturing and other areas if strict guidelines aren’t applied. Chinese partners have a habit of wagging their heads “yes” while not delivering on what was discussed.
A contract provides clarity on what it is exactly that you want accomplished. It is especially beneficial to have penalty clauses listed should various goals not be met. The possibility of losing money over irresponsible decisions makes for good motivation to do things right.
Add such issues in your contract as shipment dates, quality expectations, and other important items that want fulfilled. Don’t rely on assumptions when doing business in China or you could run into multiple problems.
A contract also provides very straightforward guidelines as to what is expected. This leaves little doubt as to what must be accomplished in order to comply. The contract should be written in Chinese to ensure there is complete understanding on their part.
Strict provisions set up in contracts provided to the partners that you’re doing business in China with also gives you clout when the company is pressured to produce large quantities from numerous other partners. If they have a contract from your company that explains the consequences of not providing shipments on time, for example, they will work harder to fulfill your order first and push to the back of the pack the companies without contracts.
A contract also provides the power of enforcement. Although there is a common belief that contracts for doing business in China cannot be enforced in the country, the truth is that China is ranked 16th out of 183 countries for successfully enforcing them. That is a very good track record of enforcement.
Besides, businessmen in China are prone to comply with contracts rather than face the possibility of being sued and having the courts rule against them. The Chinese do not like the thought of dealing with the government. This alone gives you more control of the items outlined in your contract.
The bottom line is that it is well worth the effort to draw up a contract (in Chinese) between your company and those with whom you are doing business in China. The amount of preparation, negotiation and even enforcement of contracts will save you a great deal of time, money and headaches that are more apt to surface without them.
China sourcing is increasingly seen by companies from around the world as a way to strategically position themselves against competition and to meet growth aspirations. Having a Chinese hub provides leverage in the surrounding markets by making them more easily accessible with products that are more cost competitive.
However, the country is continuously shifting in a variety of areas that make doing business in China both advantageous and challenging. Although the central government is making it easier for companies to establish branches and population shifts from rural to urban living are adding to the workforce, other factors such as labor shortages, wage increases, and increasingly high turnover must all be considered.
It takes a keen eye and better preparatory management planning to avoid experiencing additional costs that can eat away profits which might have been gained by relocating your company to China. Following are some of the advantages and challenges manufacturers might consider that may help with making decisions for a China manufacturing move.
There are numerous advantages for considering a business move to this part of the world. Large corporations with extensive capital can absorb certain expenses associated with such a move, but it is essential for small to medium-sized businesses to more closely weigh the advantages against the disadvantages.
Doing business in China offers advantages like increasing international competitiveness due to various criteria. First of all, wages and operating costs are still considerably lower than in other countries. Savings of between 30 to 80 percent can be realized depending on the amount of labor required to manufacture products.
There is also a growing list of incentives offered by Chinese agencies for utilizing China sourcing. Add these points to a domestic market that is booming, the eagerness of Chinese workers, and having ready access to improving logistics and internal personal and technological research and development and you have very good reasons to manufacture China products here.
Even though this huge country offers some very attractive advantages, it also presents some challenges that have existed all along or are popping up as things progress.
Language is a constant challenge to proper understanding and it can take extended periods to successfully get things started. Cultural differences present another standing problem due to some very different ways of doing and seeing business approaches. A good example lies in product quality which is often viewed in this part of the world as being something that can be sacrificed for higher quantity. This issue can lead to brand risk as customers who buy from China and receive poor quality products may go elsewhere. It is advisable to have a quality control unit on-site.
On the one hand, a Chinese location provides a hub in close proximity to other Asian markets, but it also presents challenges in areas such as long supply chains and distance from other lucrative markets. Distance from the home office also presents a challenge with sufficient lead times for relocating key personnel.
If you require assistance with China sourcing and can benefit from tips, advice and information stemming from years of experience in the Chinese markets, contact Asiatic Sourcing today.
Every year, thousands of companies turn to China sourcing in order to set up businesses or company branches in this booming country. Chinese partners offer a lucrative means of producing competitively priced goods as well as providing an inroad into nearby growing Asian markets.
However, not all Chinese partners are good to work with as some place quantity over quality, some are devious in their dealings, and others are simply too difficult to work with. Due to the number of hidden risks involved, it is prudent to follow specific guidelines when seeking China sourcing partners.
Here are some tips that will assist you with significantly reducing such risks by screening and choosing qualified companies to add to your shortlist.
Locating Good Suppliers
Following are some tips for finding good China sourcing suppliers.
Online Directories – Beware of partnering up with Chinese suppliers based solely on picks from online directories. Most of these websites do not effectively screen the companies before accepting them and suppliers usually have to pay a fee to be listed which doesn’t give the websites much incentive for ensuring their authenticity.
Background Checks – If you do find companies online, or from other sources, that you are interested in, ensure that you run background checks on them. You can obtain a “Business Credit Report” from Globis that will help to reveal the integrity of a company or if they are a complete fraud.
Request References – If a China sourcing company is legitimate then they will not hesitate to provide several customer references at your request. Once received, ensure that you check them out and find out the details of their experiences with Chinese partners. Companies that hesitate or do not provide references should be avoided.
Request Samples – Always request samples of products from any China sourcing companies you are interested in. The quality of the samples will reveal a great deal about their quality control measures. However, don’t rely solely on samples as most companies will send their very best, but still could supply you with shoddy products.
Personally Visit Factories – It is recommended to do more than make Chinese business contacts over the phone or internet. If at all possible, you should personally visit the factory, or send a representative to visit. If this isn’t possible, there are companies located in China that specialize in providing this service for a nominal fee. On your visit, you should tour the factory, inspect various products for quality, take note of working conditions, etc as well as ask any questions you might have.
Monitor Partners – Don’t make the mistake of taking a Chinese partner relationship for granted. The companies you partner with should be closely monitored, especially small factories which often do not have effective managing systems in place. Every shipment of goods should be inspected for quality as many suppliers will send quality products the first several shipments and then begin to send unsatisfactory products. Nip any problems in the bud as soon as possible.
Refuse Subcontracting – Subcontracting should be avoided at all costs. Many China sourcing factories will subcontract orders to raise their profits, but have no control of the quality so it usually suffers greatly. A clause stating the prohibition of subcontracting should be included in your contract.
Employ Professionals – In order to glean the best experience, it is recommended to employ the services of professionals who specialize in assisting with China sourcing. Asiatic Sourcing is a leading supplier of such services. We do all the footwork and ensure that Chinese suppliers are legitimate, responsible, and provide quality products.
If you are planning to buy from China producers then you want to ensure that you get good product. The Chinese are notorious for placing quantity high above quality when manufacturing products. Although workers are normally committed to their tasks, they don’t receive much pay or incentive to meet quality guidelines, only quota expectations.
Therefore, we are providing five steps that will help you to ensure that you locate good manufacturers to do business with and receive good product when you buy from China.
Step #1 – Research Sources
When you locate potential Chinese trading partners, don’t assume that they are legit or provide acceptable products off the bat. Request references and follow through with checking them out. Also, don’t rely on emails, but attempt to set up phone interviews to acquire reference information. If your supplier can’t or won’t supply you with at least a couple of references, or you can’t get through to any references provided, strike that supplier off of your list.
Step #2 – Get Documentation
Once you verify the supplier through references, you should then request quality control, lab testing, product safety, and other relevant documentation. Look any documentation over when provided to ensure the products you buy from China are legal and acceptable to sell in your markets. If they refuse to provide such documentation or act like they don’t know what you are talking about, scrub that supplier. Plenty of foreign countries are doing business with the Chinese now and such documentation has become standard.
Step #3 – Carefully Check Quality
Along with product documentation, you should also request samples of any products you’re interested in. Once received, carefully check over all products to ensure quality. Note such defects as cheap materials, flimsy craftsmanship, malfunctioning parts, etc. If samples don’t pass muster, move onto the next supplier and don’t accept excuses. A good business will send out good samples so if the samples are poor quality, you can bet the rest of the products you buy from China will be worse.
Even if you receive good samples, you should continue to check samples from every shipment you buy from China to ensure that the quality remains at your level of expectation. Another characteristic of the Chinese is to provide good quality products for the first several shipments and then to gradually decrease it.
Step #4 – Visit Prospective Suppliers
It is advisable for you or a trusted third party to travel to China and personally visit prospective suppliers. If you can’t afford to go this route or lack manpower, there are firms located within the country that specifically provide this service for a couple of hundred dollars. A great deal more can be determined by actually visiting the location and talking with the ones in charge. Having a trusted person to do this footwork could save you a heap of trouble and money down the road.
Step #5 – If It Doesn’t Feel Right, Don’t Proceed
If you have any doubts about any of these steps, or throughout any of the supplier selection process, hold the presses. If doubts can be solved with more information than by all means acquire it, check it out, and make sure you are satisfied. However, if your doubts persist and your gut tells you something isn’t right then pull the plug on the deal and look elsewhere. There are plenty of good companies that will supply quality products that you can buy from China without taking the risk of dealing with a shady one.
If you require assistance with obtaining qualified suppliers in your search to buy from China, contact a representative at Asiatic Sourcing.
Companies by the groves are making moves to establish branches in China. The highest populated nation on Earth has been taking long strides forward in global markets making China products more desirable for both consumers and manufacturers. Products can be manufactured by the Chinese at savings that make them a go-to source for large and small companies alike to remain competitive.
However, not only are China products sought after by markets outside the country, which was the sole case a decade ago, but the middle class is increasing dramatically within the country which opens doors for China products to be sold inside the country as well.
If you are a small business that is still hesitant about moving operations to China, here are some tips and pitfalls for you to consider.
The Language and Culture Gap
One of the highest hurdles for western countries to overcome when doing business with the Chinese is the language barrier. Only a small percentage of Chinese know English and many of them only speak broken English so communication over the simplest issues can become a time-consuming nightmare.
On top of the language issue, you have major cultural differences as well. The Chinese by and large have a totally different idea of how to manage and operate business than their western counterparts which adds another thorn in the side of small businesses seeking to source out manufacturing of China products.
Small businesses have several options to use in overcoming these hurdles. You can either send a representative to your China location to oversee operations or you can hire a representative from a company within the country that specializes in operations management. Another good solution is to hire a Chinese representative, move them to your company in your country and train them on how you want things run before returning them to your Chinese branch.
Become a Wholly Foreign-owned Enterprise
Selling China products within the country is best accomplished by registering your operation as a wholly foreign-owned enterprise, or WFOE, which allows you to sell via Chinese distributors or license your products to another Chinese company to sell. The rate of small businesses that become WFOEs compared to those who utilize rep offices to find buyers is around 100 to 1 which shows the advantage of going this route.
However, becoming a WFOE isn’t a walk in the park. Legal fees upwards of $30,000-45,000 are common to set up the company, establish trademarks, and ensure proper manuals and employee contracts are in place. The Chinese government also requires a minimum capital investment starting at $15,000 and running into the millions of dollars for certain companies depending on their business type and location. This whole process can easily be out of reach for many small businesses as well as take six months or more to complete.
If in Doubt, Get Help
Other pitfalls besides language and cultural barriers and governmental red tape for small businesses exist for small businesses wishing to set up Chinese shops. For example, producing knockoffs is a common practice where Chinese partners go behind your back to sell your designs to dubious manufactures that, in turn, create similar products that are of less quality and a cheaper price.
If you have never done business with the Chinese then it is prudent to get help from someone like Asiatic Sourcing. Our years of experience working within China and with Chinese contacts means we can get you up and running with a Chinese partner to more quickly and efficiently begin manufacturing and selling China products both inside and outside the country.
Low-cost labor in China is slowly diminishing due to the heavy influx of companies moving to the country to set up China manufacturing operations. Although Chinese wages are still somewhat competitive, they do not offer the advantages they once did. Therefore, manufacturing companies are adopting other ways to fine-tune operations in order to cut costs and remain competitive in an atmosphere of global overcapacity and booming domestic markets.
A couple of areas which are being looked at for slimming down is increasing the quality of products and reducing lead times. As a matter of fact, many of the streamlining ideas that are now taking hold in the China manufacturing sector have come from approaches utilized by other countries who are experienced in lean manufacturing processes and are bringing them with them to the country. One of the forerunners to such slimming operations is Toyota Motors which utilized such methods for not only remaining competitive, but also for excelling in the industry over a generation ago.
Tools that are used for the leaning process in China manufacturing operations first identify ineffective processes and waste and then eliminate them. Such lean tools also reveal areas of instability and variability which are then dealt with. All of these areas have plagued the China manufacturing sector and, by identifying and eliminating or streamlining these problems, greater productivity is created at lower cost.
Before the surge of foreign investors set up shop in the country, managers of China manufacturing operations didn’t consider such streamlining because of the relatively low labor costs. However, with that key factor changing, they are now beginning to see the competitive advantages of streamlining other operational areas with the help of foreign leaders who have been applying such procedures for quite some time.
There are still some obstacles to be overcome in the streamlining of the China manufacturing sector, however. Regardless of the efforts of manufactures to make operations more efficient, supply chains, for example, can slow efforts down because Chinese suppliers are more unreliable and unstable than in other countries which can affect the outcome of certain areas which are being fine-tuned.
Another hurdle lies in the area of Chinese workers. The Chinese are not as adept at problem solving as other high producing countries such as the United States or Japan. Therefore, their sluggish ability to identify problems and then effectively correct them handicaps the streamlining efforts of many companies.
Recent reports show that manufacturing in the country has come in at its highest over the past two-year period which shows that the streamlining process is working. As more of the country’s other problems are solved and fine-tuned, manufacturing in this booming country will continue to offer investors a shimmering promise of growth and expansion, not only throughout other parts of the world, but also in the rapidly growing Asian markets.
If you require help setting up a China manufacturing operation and getting it started off the right foot, or need assistance with strengthening your Chinese company operations making them more efficient, contact Asiatic Sourcing.
Good news for those seeking to begin or increase China sourcing. After a year that saw Apple open 33 new stores in 2012, the giant maker of iPad and iPhone has announced that they will establish another 30 to 35 stores in 2013. The company says that around three quarters of the new stores will be located internationally.
Several of these new additions are expected to be in China following the very successful opening of the flagship Wangfujing Apple Store in Beijing in October of 2012 which is the largest in Asia. The Wangfujing store is located in a high traffic area that caters to both local and foreign shoppers and which joins two other Beijing Apple stores located in Sanlitun and near Tiananmen Square in Xidan.
This announcement of new store growth reveals that Apple is increasing in sales and expects to capture even more of the Asian and, particularly, Chinese markets. The release of the new iPhone5 on January 11 of this year saw record Asian sales over that weekend as Chinese snatched up more than two million of the iPhones in a 3-day period.
Apple announced that 2012 sales saw a 33 percent increase ($4.7 billion) over the previous year. Much of this profit is earmarked for this move to increase their exposure in foreign markets. The company wants to boost its international brick-and-mortar store presence to numbers more even with its U.S. stores. Currently, they have 250 U.S. stores and 140 international stores in operation.
Currently, Apple is in the process of building another store in Shenzhen where several of its China manufacturing partners are already located. Overall manufacturing numbers have been climbing in this lucrative country prompting more companies to take advantage of the relaxing regulations, well organized supply chain, abundant resources, cheap workforce, and growing middle class that has a hunger for China products.
It’s not only large corporations making a move to Chinese destinations, but small and medium-sized enterprises (SMEs) are also rushing to set up shop in cities across the country in order to meet the demand of those looking to buy from China. This is in part due to the rising quality of China products that were once seen as undesirable, but are now becoming more in demand. Better quality is occurring mainly because foreign investment in the country continues to increase and bring with the companies setting up shop here better management with higher quality standards, something which the Chinese lack preferring to produce quantity instead.
For those looking to follow the lead of Apple and other big corporations and establish a greater influence in the Chinese and Asian markets, contact Asiatic Sourcing to assist you with connecting with reliable China sourcing candidates.