Never think you are a big fish when you source in China

If you are sourcing in China you have to remember one very important thing:  that your product may not be a priority for the vendor with whom you have placed an order.  Most factories in China, big and small, have a myriad of production orders going at any one time.  Walk into any workshop in China and you will likely see orders from all over the world, from the US, from South America, from Africa etc etc. I am always amazed at the global scope of production when I visit factories in China.  And some of these orders can be huge, tens of thousands of pcs depending on the product. You might think your 5,000 pc PO is a big deal but for your vendor it may only be a small order when compared with all the other orders he/she is doing at the moment.  I remember working on an apparel project a few years back.  The company that had retained me sent me to China to do an inspection of a 20,000 pc order.  For my client it was major order.  But when I showed up at the factory I realized that my client’s order was the smallest of several orders going at the same time.  The vendor told me that 20,000 pcs was not a big order and as such I could clearly see that it was not being given priority by the workers or management.  They told me a big order was over 100,000 pcs.  I was surprised and wondered if my client knew this as well.  I can’t remember but I don’t think they did.

Can you fault the vendor in this case ?  Not really.  They have to prioritize their orders and their business. It is only natural that they are not going to give a small order priority over a large one.  Ideally they should communicate this to their customer but in China it does not work that way.  Vendors can be pretty lacking in communication and that is one of the big challenges to sourcing in China. Can I fault my client ?  Somewhat I think because they failed to acknowledge that the vendor had other orders at the same time, even though they had been to the factory, just a few weeks before I was there, and had seen the other orders in process.  They simply believed that their order counted most. So when it came time to get the order out and the vendor was behind my client just pushed the vendor, the end result being that the relationship turned sour.   Had my client anticipated a delay and built some extra time into the production and delivery schedule to accommodate for the low priority their order was given things might have proceeded more smoothly.

So how can you know if the vendor is prioritizing your order or not ?   Well the first step is before you do business with a China vendor, ask them about the size of their orders and what they regard as a small order, what they regard as a big order etc etc.  They will probably inflate these numbers wanting to lead you to believe they have and can do big orders.  But their reply will nevertheless give you a very rough idea of what to expect when you place an order with that particular vendor. For example, if you meet a vendor at the Canton Fair who makes shoes and s/he tells you that an average order for him is 5000 pairs of shoes and that a big order is 20,000 pairs, you will know that if you give them an order for 1000 pairs, it will likely not be a priority order for them.   You might even ask a vendor to show you a hard copy of an order for a large QTY.  You can tell them that you just want to verify that they can do what they say they can do.  And ask a vendor before you place an order what other orders you are going to be competing with ?  For some reason this is not a question that most importers are in the habit of asking their vendors, their thinking being that only their order counts.  But I don’t think it is a bad idea to try to find out what are going to be the challenges and potential delays once you place your order.

Finally, if you can, make a trip to China to inspect your order in process.  Simply by walking around a workshop while your order is in process will give you a very good idea of how a vendor is prioritizing things.  If only a little space is being devoted to your product, well, you know you have a problem in spite of your vendor’s reassurances.

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2 thoughts on “Never think you are a big fish when you source in China

  1. I read your blog posts with interest, but in this case, YES, I CAN fault the vendor!

    I consult to woodworking companies around the US, Mexico and the Caribbean. Many of my clients are contract manufacturers. My constant advice to all of them is to be honest and fair to ALL customers of any size. If a potential client wants to place an order that is too small for your attention, or if your current schedule is too busy to meet their deadlines, than the ONLY ethical course is to decline the job. To take it, and worse to take the job and a deposit, knowing you will not make the deadline, is dishonest, unfair, and will almost certainly catch up with you in the long term. The damage to reputation alone can be severe.

    Maybe Chinese vendors work under a different moral structure, or maybe they feel that their relative remoteness and anonymity will keep customers from spreading the word about them, but I CAN tell you that unreliable vendors is one BIG reason that most of my customers look to outsource anywhere but China at every opportunity. I see a backlash building against this sort of cavalier treatment of customers, and as wages grow in China, there will be that much more incentive for customers to shop their contracts elsewhere. We saw this happen in Japan after WWII, then Tiawan and now it is China’s turn, and the length of these cycles seem to be shortening.

    • Hi Ralph. Thanks for your comments. Of course vendors are to fault for many of the problems that happen with orders. But as much as the vendor is to blame the buyer is to blame as well, for having failed to do proper due diligence and for simply thinking that the vendor is there to fulfill the order with the conditions designated by them, the buyer. There is a certain amount of hubris at work when overseas buyers place orders with vendors in China, for they simply refuse to acknowledge that there may very well be orders more important than their own. On the other hand, if you approach your China orders thinking that you may get bumped in the production queue, because your QTYs are not big, you will be ready for this when it does happen and you can plan accordingly with your customers. And this can be the difference between success and failure in China. Thanks again !

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