Knowing your product’s “real” cost will save you a lot of time sourcing in China

What people are saying about Mulberry Fields
I have already learned a great deal about China and your business through your website and blog posts. Very impressive.” -a company in Toronto

I cannot stress the importance enough of knowing the “real cost” of your product. A case in point. A customer skyped me last night and told me that he had received a very good price on one of his products from a company in Shanghai. When he told me the price, I knew it was impossible. How did I know this? Well, I had been to the Canton Fair on his behalf and had shown the same product to 10-15 vendors, all of whom had quoted me costs far above what he had received from the Shanghai vendor. And I knew the Canton Fair quotes were accurate since they were independent quotes, all within $ 0.25 of each other. In several cases a vendor gave me an on-the-spot quote that was identical to a quote I had received from another vendor. But of course vendors know these consumer products inside and out since they manufacture so many of them. Sometimes all they need to do is glance at a product and they will tell you how much it costs.

If you know the real cost of your item you will save a lot of time in finding a vendor in China. You can immediately eliminate vendors who quote you an unreasonably high cost for your product and you can concentrate on those vendors whose pricing is in line with the “real” cost of the product.

Although you can certainly email specs to multiple vendors to see costs, I really think the most efficient way is to go to a trade fair and show vendors the actual product. It is a very enlightening process when you walk around a trade show and get on the spot quotes for your product. Not only do you learn the “real” cost very quickly but you will learn more about your own product this way. You become very confident in your product and pricing after this exercise. And keep in mind that the cost savings you achieve by knowing the “real” cost of your product and finding vendors who can meet those costs while giving you a good product, will in the long run more than pay for your trip to China.

Oh yes, in the end it did turn out that the price from the Shanghai vendor was too good to be true. Apparently the vendor made a mistake in their quote to my customer. Their cost was in fact about 15% more than the quotes I had gotten in Canton.

http://www.theeastasiaco.com

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