Three useful tips on doing business in China

I was reading the China Business Review the other day there was an article about protecting one’s IP in China.  The article was written by the founder of a small company who took his production to China in 2009 and who has experienced the ups and downs of overseas manufacturing. Although the article mostly details the challenges in finding a Chinese partner who is going to respect your IP, there is a lot of useful advice that pertains to sourcing in China as well.   Among the valuable lessons imparted in the article are as follows:

  • Confirming that your partner has the expertise to do your product. I think this is good advice. Too many people just assume a vendor can do a product because the vendor has assured them they can.  And how do you confirm ? Of course samples are very important and you never want to go with a supplier that cannot give you a near perfect sample.  But you also need to visit your prospective supplier’s facility to make sure they are not simply subcontracting your order out and that they have the capacity to do your orders.  And remember good samples is only a start. You need to ensure that your vendor will sustain your quality standards during production. And the only way to do this is with an inspection of the goods before they leave China
  • Clear and frequent communication.  The author of the article details how some of the poor prototypes he ordered early on were not as much the fault of the Chinese factory as they were the fault of his company who often provided insufficient product details.  This rings very true.  In fact, most small companies that source in China tend to omit important product details, simply because they do not understand their own products and/or are assuming that vendors will fill in those gaps on their own. As I often advise people, never make assumptions when you are doing business in China.  Tell your vendor everything.  And regard communication with your vendor as perhaps the most important aspect of your relationship, equally as important as cost and quality.
  • Have someone on your team who understands Chinese. The author hired a translator for their meetings in China. However, when 20 minute conversations in Chinese on technical and legal issues were being reduced to 30 second summaries they decided that far too important content was not being delivered to them.  They saw the need for a company employee who understood Chinese.

Here is a link to the article. China Business Review article 

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