Haste makes waste – and it is costly when doing business in China

I often receive inquiries from both existing and prospective customers about having a product made in China. Last week the tone in one of the emails I received was urgent,  “ We really need to find a vendor immediately and ship ASAP no later than March 2012.”  Unfortunately it is just not that easy, especially if you have yet to identify a vendor to work with. Finding good vendors in China takes time – at least three or four months and sometimes as much as a year. There are just so many bad vendors to wade through that you simply have to do your DD- including a challenging sample order – or you risk losing thousands of dollars in bad product and having to turn away important customers back home. 

You will also increase your costs if you approach vendors – new and old vendors both – with a sense of urgency.  If a vendor knows you need a product ASAP they will charge you a premium for it. Your first costs then will go up, sometimes dramatically. Vendors  are also more inclined to take short-cuts if they sense their customer is desperate– because you need the product quickly they know you might be willing to accept something that is not exactly to specification and they can therefore get by with using cheaper materials or skipping costly production steps altogether. I have seen this happen many times.  The root cause more often than not:  overseas buyers are rushing their vendors for their orders.   

The best way of approaching samples and/or production is to thoroughly evaluate your company’s situation, and know well what your needs are before approaching vendors with lead-time requests ( you would be surprised how many companies don’t do this but just assume they can get anything made in China and delivered when they want).  Ask your vendor when they feel they can deliver the product to you at the QTYs you have specified and if that is around your request date, you may be able to work with them, getting them to move the date up a week or two without seeming desperate. If the delivery date the vendor has given you is much further out than what you have in mind, don’t force the issue with the vendor but go back to your customer and see if they are flexible about delivery dates.  I have learned that it is better to disappoint retail stores over the short term – with perhaps longer lead times – than over the long term – delivering product to them that they cannot sell to their customers .  Another way of looking at it is that it is perfectly acceptable if your company has a reputation among its customers as being a “little slow on delivery.”   If your company, on the other hand,  is synonomous with bad quality,  you will be looking for new customers.

Finally, I would add that vendors in China today do not like to have lead-times dictated to them by customers. Not only are they no longer desperate for orders in many cases but China vendors – like everyone in China -are keenly aware of China’s history of domination by foreign powers and dictating to your vendors what to do can ring with unfriendly overtones.  

As I always say,  work with your vendors, not against them


Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out /  Change )

Google+ photo

You are commenting using your Google+ account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )


Connecting to %s