In this post, I will talk about what your organization must be able to do before you start importing from China.
Importing from China allows companies to take advantage of the (still) relatively lower price points, high capacity and the robust infrastructure China offers. When comparing to other countries in the region, these companies can buy bigger quantities at lower prices and beat their competition.
Some companies buy from local importers in their home countries and some companies place orders with the help of China buying agents. Other companies insist on buying directly from factories. Importing from China creates a longer supply chain that presents many challenges.
When you buy from China direct, besides the regular challenges, you have to deal with language, culture and time differences. These may not seem like major issues to consider at first, but you may find very soon they impact quality, production process, your ability to source manufacturers and more.
If your organization in not used to buy from China directly, it is a good idea to build the capabilities you need one by one. You can do this by working with China buying agents, at least at the beginning.
So no matter if you are a China veteran or just beginning to do business in China, here is a list of capabilities you must have if you want to buy from China direct:
#1: Find and select the right suppliers
If you want to find suppliers that are right for you, you first need to know what to look for.
The same way a relationship between a man and a women is doomed for success or failure, before the relationship has even begun, depending on how much they are right for each other, a business relationship between a buyer and a supplier is doomed for failure or success, before it began, for the very same reason.
Unlike relationships between men and women, it is OK and even necessary to have several suppliers. But finding a supplier you can trust and work with for a long time is a true asset that can propel your business to new heights.
Finding good suppliers is a task that requires a lot of time. If you don’t know how to do it efficiently, it will take a lot of time with very little results. Click here for tips about how to source your suppliers in China.
#2: Receive real-time agenda-free information
You must be in control of your business and orders. There is no argument about that. If you don’t receive information in real-time you won’t be able to make good decisions and act on them.
Getting the right information at the right time has a lot to do with your team in China.
Depending on your company’s circumstances, your team can be made of people you hire or China buying agents that act as your extension on the ground.
This channel of communication is both crucial and difficult to manage. If you are in your early stages of building your business in China, we warmly recommend you use trustworthy third parties.
#3: Communicate effectively with your suppliers
Communication is (almost) everything. It is also a lot about understanding the world of the people you are communicating with. Understanding their culture, their language, their constraints and the way they perceive you. When you think about what can go wrong, it seems like it is almost an impossible task for people who are coming from two different parts of the world to communicate effectively.
Still, I can tell you about people who do business in China without speaking a word in Chinese with people who do not speak a word of English (yes…Google translate…unbelievable, but yes…).
However, these people know a lot about their business, the reality their counterparts in China live in, and their product. Their suppliers are extremely knowledgeable about the product and the production process.
This is another area where hiring in the right individual or a manufacturing agent in China can prove to be a very good investment.
As I mentioned in the post, depending on your business and product, you may choose to inspect or choose not to inspect your goods before shipment.
If you decide you do want to inspect your goods before shipment, there is a lot you need to know about how to communicate to your supplier your requirements.
You also need to know what kind of people will not only inspect the goods but will know how to send you the information you need.
If they do their job right, you will be able to make a decision whether you want this lot to be shipped to you or not and if they don’t…
#5: Arrive in the factory on a short notice
S**t happens. And when it does you want that you or someone on your behalf will arrive in the factory so you will know what is really going on, right now.
It doesn’t happen a lot, and if you can do all above well, it will happen even less.
Whenever I am waiting at a gate for a delayed flight together with someone who’s been working in China for long enough, sooner or later we start exchanging stories about how we managed crises in China. Some of these stories include rushing to the production site at a moment’s notice.
As I said, it doesn’t happen often. But when a large sum of money or your company’s reputation is on the line, at that moment, the ability to arrive at the factory quickly is priceless.
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If you have any question or like to share with us your experience in China, please contact us.
We’d love talking to you about your projects in China.
