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The small buyer’s dilemma in China

by Renaud Anjoran in 'Quality Inspection Blog'

Over the years, I have worked with many small and midsize importers who were looking for a good supplier. A very common question they have is “what kind of factory should I look for?”.

The problem is simple to grasp:

  • Small factories give low quotations, but are not very reliable — especially when they need to develop a new product.
  • Larger factories are (usually) more reliable and more professional, but are unwilling to give low prices to small buyers. And they are more likely to bump small orders behind more significant ones, to subcontract them, or to assign a junior salesperson for followup.

So, new-to-China buyers keep trying new suppliers that are at a low price level, and think “I am sure there is at least one good factory for me in this country”. This search can last for years.

 

Where it gets really, really difficult is for buyers who have a quality standard above average.

A few ideas to solve this dilemma

Maybe China is not for you

Your orders might be too small for China. In that case, stop wasting your time looking for a supplier here.

Don’t be afraid of working with a trading company

If your orders are small, maybe an intermediary can place them in a small workshop. You can’t deal directly with a small structure that doesn’t employ any English-speaking staff.

In this case, choose a trader with good customer references and a good knowledge of your products. And take control of the QC inspection process — you should be the one deciding whether the goods are acceptable or not.

Try to seduce a large factory

One of the big guys might be willing to decrease your prices. Maybe you can convince them that you will be a good reference to get new customers in your country. Maybe they think they can use your designs to “wow” prospective buyers. Or maybe they will see that your business is easy (mostly repeat orders, few new developments).

What some importers do is they give their complex products to a big factory at a higher price, and make most of the margin on simple products that are made in smaller, cheaper workshops.

Start narrow, and start small

When you test a new factory, give them 1 or 2 new products. But don’t expect them to devote all the engineering attention required for developing 15 new products.

Start with small order quantities, but not so small that your supplier can’t convince its sub-suppliers to serve your needs.

If possible, let the new factories choose which type of product they prefer to make in low quantities. A small production run of some of your models might be impossible.

Don’t get stuck in one area

Sometimes there are many manufacturers of one product line in one city. But in China, industries are often spread out in several provinces. If you can’t find your luck in one city, go and explore some other area.

What do you think?

 


Renaud Anjoran is the founder of Sofeast Quality Control and helps importers to improve and secure their product quality in China. He writes advice for importers on the Quality Inspection blog. He lives full time in Shenzhen, China. You can contact him at This email address is being protected from spambots. You need JavaScript enabled to view it..

 

 

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