When you put your vendor on a pedestal it is time for a reality check

I am working on a project now with a vendor in China that I have known for about four years. I met this vendor at the Canton Fair and I have run a few sourcing projects by them over the last few years. They have always proven very reliable in terms of making sure they understand my clients’ product designs and getting me quotes and/or samples in a very timely fashion. And this project has been no different. However recently I sent them an email asking them to send in samples and it was about ten days before I heard anything back from them. I called and left a message as well. But to no avail. When they finally did get back to me there was no apology or explanation for the delay. They may simply have been busy with another order or perhaps they were preparing for the Canton Fair. Fortunately it was only a sample order but, boy, was it frustrating for both me and my client. At one point I was even questioning myself about how well I knew this vendor and I was preparing to reach out to alternative vendors. The lesson here is never to take anything for granted when you source in China. That seemingly trustworthy vendor you have known and done business with for the last few years may suddenly turn out to be completely unreliable. I have seen it happen many times before and it could easily have happened this time as well, had the vendor decided they were tired of working on projects with me that as yet had not resulted in any sizeable orders for them. So always have backups no matter how well things are going and when you start to put your vendor on a pedestal it is time to give yourself a reality check. I have written on this before but it bears remembering. Even I, who have doing business in China for 25 years, have to remember this sometimes.

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Book Review: Age of Ambition, Chasing Fortune, Truth and Faith in the New China. By Evan Osnos

I always enjoyed Evan Osnos’s articles on China when he was the Beijing based correspondent for the New Yorker. Osnos lived in Beijing for eight years and speaks Chinese, two attributes that informed his writing on China which I have always found to be informative and entertaining.

Osnos’s recent book on China, Age of Ambition, Chasing Fortune, Truth and Faith in the New China is every bit as good as his writing in the New Yorker. He paints portraits of some of today’s most well-known dissidents including Ai Wei Wei and Chen Guangcheng as well as the popular anti-government blogger Han Han. And there are profiles as well of figures who have risen to become part of China’s elite, including a lady who runs China’s most popular dating site and a prominent journalist. In some instances these are the typical rags-to riches tales that are recounted so often in books on China nowadays and in this respect  Age of Ambition mirrors other recent books on China. Osnos’s book stands out, however, because he has access to many of China’s most central figures, by virtue of his assignment in Beijing for one of America’s most established magazines. For this reason we are often on the receiving end of the Government’s attempts at coercion and censorship, sometimes successful, often not. And that is what this book is really about, China’s hectic change and the Government’s attempts to keep up and to keep order.

There are also very good sections about the China Bullet train disaster, an accident that was very much owing to corruption, and a well-publicized incident in the South in which a small girl was hit by a car and no one came to her aid. These were big news stories both in China and overseas and Osnos gives us riveting accounts of both.

Still there are weaknesses. The Age of Ambition would have profited had Osnos spent a few months in 2nd or 3rd tier cities feeling the pulse of rural China which still makes up over 50% of the population. For example how effective are the Government’s efforts to curb freedom of expression in cities other than Beijing and Shanghai, where Osnos seems to spend most of his time ? In fact Osnos focuses almost exclusively on establishment figures in modern day Beijing, Starbucks or upscale office buildings being the setting for many of his interviews. A portrait of a textile factory owner in Jinagsu grappling with issues such as pollution and labor unrest would have been preferable to the portrait Osnos gives us of the blogger Han Han who, as both fervent anti-government blogger and amateur Formula 1 driver, obviously has some credibility issues. Osnos glosses over the hypocrisy of Han Han and his often banal blog posts and seems more dazzled by Han Han’s celebrity.

Osnos is also overly critical of China’s progress. He lambasts the Government’s censorship efforts, without acknowledging that mob unrest has a long history in rural China going back to the early Nineteenth Century and that Government fears about internet rumors fanning mob violence are in some cases well-founded. Religious cults, for example, pose a far more serious threat to political and social order in China than they do in more advanced democracies like the US or Japan and China has good reason to worry. Osnos moreover belittles China’s achievements in science and technology, not to mention the achievements of a couple of the individuals he has befriended and whom he profiles. He mocks the English teacher Michael’s attempts to master English and yet he portrays Michael as a friend.

Like other more recent writers on China, Osnos lacks the perspective of someone who was present in China in the 1980s and early 1990s when the country was mired in backwardness and had yet to experience the fruits of the Deng reforms. China was one of the poorest countries in the world then. Today it is one of the richest. Development on that scale means big problems and yet too many writers on China today, Osnos being one of them, focus on the problems and seem to forget the achievement, an achievement that long-time China watcher Henry Kissinger calls the “miracle of our time. “

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5 assumptions NOT to make when you do business in China

There was an interview in the China Daily recently with the President of the American Chamber of commerce in China, Ken Jarrett. Jarrett was discussing the need for American companies that sell into China to adapt their product to local tastes. In Jarrett’s words “My advice for forthcoming US companies is to be aware of what is different about consumers here. You can’t assume that the product you have in the US has the same attraction here, so you need to adjust it,” There is a lot of wisdom in this statement and it should be applicable to companies that source in China as well. In other words, when you source in China you have to respect Chinese business customs and you need to be careful not to make the same assumptions about behavior that you make in your own country. Here are five assumptions that I have seen US companies make in China that just lead to problems.

  1. My production will be every bit as good as my sample. Not so. A sample should simply be regarded as an example of the vendor’s capabilities and nothing more.  If the vendor can do a sample to your liking that is big step forward. But there is a long way to go to ensure that your entire production looks like that sample.
  2. My vendor will implement my design changes. Although a vendor may tell you they will make the changes you suggest, they may not if these changes involve too much cost. It is very important to try to maintain a dialogue with your vendor about the cost of the project and reassure them if they see added costs.
  3. My vendor will inspect my order. Vendors put very little into inspections. They can sometimes be remarkably short-sighted in terms of making sure they deliver a good product to their customer.  Often, they want to ship the product ASAP and get paid, not caring if a subsequent order will materialize or not. The burden is on the buyer to inspect their own product, whether they do that on their own or through a third party inspection firm in China.
  4. My order will ship according to the date on the PO.  ALWAYS be prepared for the likelihood that your order will ship late.
  5. My vendor will do what they have promised.  A promise in China sometimes means very little. When a vendor promises you something don’t believe it. Instead keep talking about it and make sure they do it.

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A letter from a start up that wants to source in China

I had an inquiry from a person in Australia this morning. I get so many inquiries like this so I thought I would publish the inquiry and my reply accordingly. I think it will be useful for others who are experiencing the same frustrations in their China sourcing.

Hi,

I have read quite a number of your blogs and I wanted to ask you for some advice. My name is Robert and I am in the process of forming a startup active wear label in Australia. I have a pattern maker here in Australia so that part is covered but otherwise I am not sure how to progress forward to having my line manufactured. I have found the process to source a quality manufacturer in China who is willing to work with me both time consuming and very difficult. To start my runs will be small as I don’t know what will work for my target market and what wont. Over time this is something I hope to develop obviously, but I see the need right now to work with someone who understands China and how best to bring a product from design to production. I am hoping you can help me out or point me in the right direction.

Any help or tips are most welcome

Thank you

Dear Robert.

The first step before you do anything is to finalize your designs.  Then based on one of your completed designs I would make a special mock design for a prototype and start sending this out to vendors for feedback/ quotes. Please note that you have to be very specific about sizing and material specifications, as well as packaging. Don’t neglect any product detail. In other words, you really have to know your design and product needs inside out (no pun intended). Where most people have problems is that they have not finalized their design, and don’t understand their own product. And then they leave it to their vendor to educate them. Not only does this add considerable time and cost to a project but it tells potentially good vendors that you are an amateur.  That is not the kind of message you want to send to someone whom you are about to enter into a contractual agreement with.   Here is a little synopsis of what you need to do.

1.) Finalize your designs.  Pantones, sizing, material specifications.  Testing requirements if applicable (children’s clothing).  All packaging as well down.

2.) Project your first order QTY and target cost. Remember that the cost of your product will go up with packaging and shipping so be aware of this when you try to come up with a target cost.

3.) Reach out to vendors. Start with 20 vendors.  You can use alibaba for this or I can help you working from my file of vendors, which is substantial and generally does not cover the same landscape as alibaba.

4.) See who gives you the best price and who leaves you with the best impression as far as quality of response/feedback goes.  Watch carefully and eliminate two types of vendors as follows: those who are very slow to reply to you or those whose cost is simply prohibitive for your needs. Aim to have 6-7 vendors after this weeding out process.

5.) Go down to your local discount chain and buy a product that has similar material/packaging specifications as your own. Send pcs aka swatches of this material along with one of your designs to the 5-6 vendors you have targeted.  See what kind of revised pricing the vendors come back with. Once again eliminate vendors whose response is feeble or whose revised cost is simply too high.  At this point, maybe you have 3-4 vendors who look promising.

6.) Request samples but watch out for excessive sample fees. If a vendor overcharges you on a sample it will likely mean that they will over-charge you in production. Stay away from vendors like this.

Good luck !

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