My first trip to China wasn't on business, but as a tourist. I was apprehensive due to the many preconceived notions I carried, fed by media reports of the physical and social conditions there. I half-expected stomach upsets from badly cooked food and guarding against robberies at every turn. Most of my fears were unfounded, and you can find products and services of international standard.
Many buyers are guarded about buying from China – understandably so with recent unfavorable news coverage of the country, its products, and its business practices. However, China is still the third largest exporter in the world – proof that there are plenty of serious and high quality suppliers.
Visiting China is a good starting point for doing business there. If not, there are many online and print sources to help you find quality products and suppliers, which I'll mention within this article.
These risks can be minimized by understanding all the costs involved in your import arrangement. Some may be completely hidden, and others not overtly expressed. Many costs don't come in numbers, but will nonetheless lead to bottom line losses if ignored.
Understanding the market
Before deciding on what to import, look at your local market to make sure that the product is in demand. Then find as much information as possible about the export market for that product in China. Be vigilant and ask every detail you need to know. If you cannot obtain first-hand opinions, sourcing publications are a good place to start.
For industry trends and verified suppliers information, there are free products sourcing e-Magazines that you can refer to. For in-depth studies on specific industries, pricing and trends forecast, you might want to invest in a China Sourcing Report.
Finding a trustworthy supplier
This is perhaps the most important step in your import business. A serious and dependable supplier minimizes any concerns on quality, trust and disputes.
There are a number of sourcing sites where you can find suppliers from massive directories. To find the right one can be a laborious task, but your work can be made easier by going to sites that screen suppliers before they are listed – like Global Sources Online. Under their "verified suppliers" system, suppliers need to have their company information and contact person verified and are visited 3 times in-person before being authenticated as a "verified supplier". This also means if you pick a "verified supplier", you can be sure the contact person is a legitimate representative and the company is registered and export-ready.
A good sourcing portal should allow you to easily contact prospective suppliers. They should display clear contact names, phone numbers and e-mails. The listings on Global Sources Online, for example, let you easily send direct inquiries to suppliers so you can ask further questions on their products such as price and minimum order quantity.
Once you're in contact with prospective suppliers, address all your quality concerns with the right questions. State your requirements to suppliers clearly – like product warranty, key specifications and order terms. Alternatively, some suppliers will provide product samples if you ask, so you can first test them yourself. If you're happy with the quality of this sample shipment, you can order in bulk. If possible, try and attend a sourcing fair to test samples free of charge. Most sourcing fairs are organized around themes like "Clothing & Garments" or "Electronics", so buyers like you can meet all the specialized sellers of the products you want.
Factory visits and inspections
China's business environment is changing rapidly, and you'd be surprised how much factories can develop in a year. Visiting a factory is easier than you think – many suppliers arrange the transport for you and may even take you to competitors' factories. At the China Sourcing Fairs, for instance, exhibitors arrange for transport right to their factories from the fair grounds.
There are a few reasons why you'd want a factory visit:
1. To meet the management and see if the company is competent
2. To gauge the factory's level of technical sophistication
3. To check if the factory complies with regulations and labour laws
4. To see who else has placed orders with that factory
5. To determine if the factory's production capacity is as claimed
6. To see if the factory is subcontracting production to other factories
If this is too much trouble for you, consider appointing a local agent or third-party quality (3PQ) firm to inspect the factory on your behalf. Get someone who speaks the language and knows local business conditions enough to make a good judgment. Most agents usually charge by commission from the amount of goods you import, and also inspect the output before it gets shipped.
Before the goods are shipped
Product quality can be found satisfactory during your factory visit, but issues can arise once they are to be shipped. Some problems include: wrong count, wrong mix of product types, SKUs, improper handling during loading, inadequate dunnage, or damage to the container. All may leave you with unusable products on arrival and a long delay to replace them.
You have three options:
