By Dan Harris in 'China Law Blog'
China Sourcer Magazine is out with its second issue and it is good. The issue is dedicated to China trade shows and it is chock full of helpful information on what to do before, during, and after a China trade show.
My favorite part of this issue was actually the Q&A section with the editor (with assistance from PassageMaker). I particularly liked the answer to a question regarding the most common mistakes made by first time China trade show visitors, summarized below:
1. "In hopes of capturing the attention of the supplier and getting a good price, some buyers overestimate their expected order size. If production gets started and the promised orders don’t start coming in, one will find themselves dealing with a very unhappy supplier. The vendors have to make an investment as well to get an order going and if they feel they have been misled you can expect significant problems ranging from a decrease in service attitude all the way over to a blatant refusal to accept new orders or even to deliver the current lot. A good rule of thumb is to be open about your order size. This will help ensure you find a supplier that is a good match for your situation."
This is so true. Every so often, we get calls from companies that have led their Chinese suppliers to believe they will be ordering 100,000 units and then they cannot understand why the Chinese supplier is seeking to double prices on a 10,000 unit order. I am not aware of any such situation ending well for anyone.
2. "Some buyers come to the trade show without any ideas of what they want to buy, hoping the right product will magically present itself. What happens is that there are so many cool products available at the show that the buyer gets pulled in many directions."
3. "Production can’t start until the materials have been selected and engineering completed. For those that are buying customized products, another common mistake is to give the supplier only a rough idea of your concept and assume they can do the engineering for you.
a) Even if you pay them for engineering, suppliers often have the mentality that if they did the engineering, then they have ownership of the design. This is very dangerous if you are creating a custom product and worried about IP leaks.
b) China excels at taking blue prints or well laid out designs and turning them into reality. But the medium and small factories may not have a good pulse on your particular marketplace in terms of government regulations for product safety and materials, let alone consumer preferences."
Again, so true. Chinese factories tend not to be at all good at figuring out how to design what you need or at customizing a product for your market. We find successful outsourcers nearly always give their Chinese suppliers explicit instructions, including listing out the materials. We have also dealt with all sorts of problems relating to who owns what Intellectual Property and most of the time the problem arose because the foreign company "just assumed" the IP would belong to it. If you care about your IP, make sure you have it in writing (preferably in Chinese) who owns what.
4. "Believe none of what you hear and half of what you see. So true for the trade show. It is key to remember that it’s a SHOW which means the suppliers put their best foot forward. If you want to know the real deal at the factory about quality and lead times for example, don’t rely 100% on the words from the sales people at the booth, make the effort to visit the factory after the show."
Lots more good stuff in the mag and I suggest you check it out.