Ordering in small QTYs when you are starting a business

I have a client who is starting a new line of private label products and he wants to order in small QTYs from China, the goal being to see which products do well and which products do not  before he pours a lot of investment into anything. These are low value added products which retail at under $ 20.00. He sent me a list of about 10 products and the QTYs he wants to get from China are from 250-500 pcs per item. I like my customer’s common sense here, for I think in any China sourcing project it is good to start small, no matter what your projections or gut feeling may say. At the same time, often what gets a vendor’s interest is large order QTYs so an order of 250 pcs may have few takers. And if someone did take the order, it would not be a priority. The one exception would be if my client had a longstanding relationship with one factory. In this case the factory would willingly take the order because they would view it in terms of the larger relationship. Getting factories with whom you have done business over the years to take small orders is rarely a problem. But my client is starting out so he really does not have these kinds of relationships with factories in China right now.

For this reason, I have advised him that it is best to work through a trading company with this order, and one that specializes in the type of product he wants to import. In addition to run-of-the-mill trading companies that run the gamut in terms of what products they sell, you will find trading companies in China that are dedicated to one product category only e.g. auto parts, to stationary items, to toys, to baby products etc. I worked through a trading company once that specialized in silk flowers and automotive parts. It is an odd pairing but it worked for me because I was sourcing silk butterflies for a company in California. Had I been sourcing refrigerator magnets it probably would not have worked. So if you are looking for a trading company, it is good to remember this. Because the last thing you want to do is unknowingly give an order to a trading company that really has no expertise in the product you are interested in. You have no way of knowing this unless you do your research.

At the same time working through a trading company means that my client will have to lower his product standards considerably. Because trading companies are not the primary manufacturer and cannot be expected to attach importance to any but the most basic quality requirements of the customer one has to lower their standards accordingly. So when my client is already voicing about how he can tweak this or that on a product or how he can improve quality, I told him, forget about that. You are just ordering 250 pcs of something with minimal value. Right now just see if you can get these products out of China with your own label at a cost that works for you. Once you do that you can gauge the interest in the market. Even if a customer buys something and returns it for quality issues, my client will have seen that there is interest in the product, which I think is his goal now. When he knows which products garner interest and which do not he can then start thinking about bigger QTYs and approaching factories directly with orders that will get their interest. And then he can spend more time thinking about product quality and design.

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More thoughts on reaching out to vendors before fair time

I received an email a couple weeks ago from one of my customers who is going to be at the Canton Fair and she asked me if it was OK to go cold.  In fact, a lot of people attend the fair without ever having so much as looked at the Canton Fair exhibitor’s list.  A company I used to work for was like this. When they attended the fair there was absolutely no preparation at all – unless I was going with them. Why someone would want to plop down $ 5,000.00 to attend a trade fair but not prepare for it I have no idea.

In fact, one of my favorite pastimes at the fair is to see who on the fair shuttle bus has prepared extensive notes on vendors and mapped out the show.  You can always tell who is prepared and who is not. The women are much better than the men at this and the Europeans better than the rest of the world.  

Most importantly, if you go to a trade fair without any preparation then you are increasing your risks of a disaster at production time. In fact, there are many vendors at the trade fairs in China and Hong Kong that you would just not want to do business with.  These vendors are synonymous with bad quality, late delivery, poor communication etc. You can begin the process of eliminating bad vendors  by contacting them before the show.  Vendors that do not reply to your emails, even after several attempts on your part are not vendors you want to deal with. Vendors that reply to your initial inquiries but then disappear after you ask them to quote on a product or make a sample for you to review at the fair are not vendors you would want to deal with. Giving people the benefit of the doubt has its risks.

Over the past month, in preparation for my trip to Guangzhou, I have reached out to over one hundred vendors of toys and plastics . Of these one hundred I would say 10-15 have turned out to be pretty good at communicating and showing interest in developing a business relationship with my customer (s). But among the companies I have reached out to so many have proven irresponsive or simply not helpful to the point that I would not recommend dealing with them. Would I have known this had I not reached out to them?  Yes, but only after a frustrating and costly sample or production order.

I do not envy the overseas buyer who will meet vendors like this at the fair and who, after receiving promises of low cost, quality product and cooperation will return to his/her respective country feeling that  they have found a good vendor in China only to realize,  after their order is a month late and they have lost an important customer,  that this was not the case.