When a sample order takes too long it is time to worry

A client of mine told me today that it took him a few months to get samples from a new vendor in China. The only reasons I can think of are that either the vendor was super busy and not interested in doing a sample order for someone who is not yet a customer; or the vendor was subcontracting the sample order.  In either case it is not a good sign that samples would have taken so long. Most samples take a couple weeks.  A long sample order would be a month.  3 months for a sample screams unorganized.

When I negotiated with this vendor a few months ago, I found them very responsive.  And my client said that the quality of the samples he has received has been good. The only problem is the sample lead time.  In a situation like this I think you have to proceed carefully.  If my client has it in his budget, he should have someone go inspect the factory and talk to the manger to find out why the samples have taken so long. A visit to the factory would probably answer a lot of questions.   If my client does not have a factory audit in his budget then I think I would be very reluctant to give this vendor an order, the good quality of the samples notwithstanding.

I tend to look at sample orders as not only for testing the quality of a product but also for testing a vendor’s responsiveness and reliability.  And I like to tell people that if they have a lot of trouble with a sample order, then imagine how difficult it will be when they have a production order shipping against a cancellation date.  That is when China sourcing threatens your business.

A last thought:  I have been in this situation before.  You have a vendor that delivers you good quality samples within your target cost.  Or you meet a vendor at a trade show with a great product. But they are unreliable in other ways e.g. not showing a particularly friendly or cooperative attitude when solving problems, not doing things when they have promised.   As reluctant as you are you really need to move on.  Because as I said above if the relationship has problems early on, those problems will only get worse later.

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How to source apparel in China: The Basics

I don’t take on a lot of apparel projects even though I get inquires from small apparel companies a few times a month.  The reason is that I don’t have a lot of experience with apparel and it is outside my comfort zone. A few years ago I somewhat reluctantly agreed to do an apparel inspection in China for a company I know.  I found it very challenging simply because I did not have a lot of experience in garment sewing, which is very different and far more complex than home textiles sewing, where I do have a lot of experience. In fact I spent a few years in Home Textiles production in China and in that time I learned how difficult textile production can be, from achieving the right colors on fabrics to the intricacies of CMT ( Cut, Manufacture and Trim).  But even my experience in home textiles did not prepare me for the severity of inspecting a 30,000 pc apparel order in China. Just the notion of stitch geometry or the myriad handling strategies when sewing a garment depending on the shape of the fabric is enough to scare one off.

Yet, even though I don’t generally take on apparel products I do know some basic things you need to consider when you are sourcing apparel in China.  And these are the things so few people include when they approach me with a project request:  Accordingly here they are:

  • Pantones for all fabrics, logos etc. Pantone books are very expensive but if you are sourcing apparel overseas having a Pantone book is indispensible.  And the best Panton book ( and there are many) are those with multiple pantone chips of the same color – so you can send a vendor one pantone and have extras for yourself.   Do not think your project will go well if you don’t provide your vendor with a specific pantone.
  • Sizing in CM, find a sizing chart online showing differences between US/European and Chinese. Don’t just assume that your vendor knows US sizing charts because they have manufactured for US customers before. You would be surprised at the stories I hear e.g. medium sized garments coming in from China that fit like XS here in the US.
  • What kind of fabric you need. Be very specific here.  Type of fabric e.g. if cotton what kind of cotton. Is it Gingham, Flannelette, Pima etc etc  ; Weight. Usually measured as the weight per one meter of fabric/weave  g. plain, satin, twill etc etc  etc.  It is not to be expected that you will know all this info off the top of your head but you need to know it. The best way is to go down to your local fabric store and ask them to tell you what the fabric is. And then go to another fabric store to double check the info you have been given.
  • Detailed patterns done on CAD. Check with the vendor to see which format they need CAD in. There are several formats.
  • Components (if applicable) buttons, zippers etc. Specify these as best you can. The more info you give your vendor, the cheaper your cost will likely be. Not only does it project to the vendor your knowledge of your own product but it decreases the likelihood that they will source a more expensive component for you than you actually need.
  • Labeling requirements. These are important and will impact cost. You need to include all fonts.
  • Testing requirements. Never to be overlooked with any product and essential for any apparel product being imported from China.

Be prepared to have to meet MOQs per design/color and even size.  The reason is that the factories that sew your garments are are ordering fabric from 3rd party suppliers.  The CMT factories do not make their own fabric and therefore they face MOQs as well from their own fabric suppliers. I see so many people who have a new apparel line and they want to have as many SKUS as possible because it makes their line more attractive. But they don’t understand where factories in China get their own fabric and that  there are very stiff MOQs for fabric.   So you have to always think the fewer SKUs the better. At least when you are starting out.

Finally, make sure you have plenty of fabric on-hand so you can send prospective vendors fabric swatches. There is no substitute for providing the vendor with an actual sample of the exact type of fabric you want to work with.  And, once again, the fabric store is the best place to go.

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Podcast: How to source in China

I was the guest on a Podcast recently.  The program is hosted by Indie Brands a popular website for independent start ups.  There is a lot of useful information here for small businesses, whether sourcing in China or not.  Enjoy

Indie Brands Podcast Feb 2016

Required reading for anyone thinking about sourcing in China

I was thinking this morning how many times over the years people have told me how they were cheated when they sourced in China. One of the better articles I have read on this subject appeared in 2013 in Inc Magazine.  The article describes the trials and tribulations of one entrepreneur from Ann Arbor Mi who learned the hard way that doing business in China is not easy. It is such Ona good article, in fact voted one of the best business articles in 2013, that I usually send the link to prospective clients who are approaching me to help them.  I see it as required reading for anyone who is thinking of doing business in China. INC Magazine article

 

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An American CEO who is jaded by China

I sat down yesterday with a local entrepreneur. He owns a chemical products company that he established ten years ago and the company has grown from 5 to 10 employees over the last year.   He wanted to talk to me about China or, more aptly put, he wanted to complain about China.  He detailed for me some of the challenges he has faced there over the last ten years.  Among the things he told me:

  • He hired a Chinese employee only to have that employ take his formulas and set up his own company in China. And then this ex-employee had the gall to approach his former boss and offer to be a supplier. Because the prices were good the American could not resist and he is now buying his own product from someone who stole that product from him!  I have heard these outrageous but true stories so many times before.   There is no way to avoid situations like this but by making sure you vett the people you are employing as thoroughly as possible. I should have asked about his hiring process but I didn’t. But a good tip is this if you are protective of your IP you should never hire anyone but a US citizen or permanent resident who can be held accountable under terms of an NDA.
  • As a side venture the entrepreneur tried to export California wine to China, under private label, only to find that he had to register his designs with the Chinese govt. and was forced to have a Joint Venture (JV) partner. He seemed to think this was just opening the door to getting ripped off again. Of course it is. But as I explained to him if you are making a good profit off of China, it shouldn’t bother you if your JV partner in China is making a good profit off of you.
  • He attempted to learn Chinese believing that it is very important to speak the language of the country where you are doing business. I couldn’t agree more.  He mentioned what a hard language it was to learn.   But he said that he was forced to give up his studies when the SARS epidemic broke out, believing that he would not be able to spend time in China to practice. I don’t know what to say here but it does not sound like he made a sustained effort.  And that is what it takes to learn Chinese, a sustained effort. It is a hard language. He is correct.
  • He wanted to know how I had avoided becoming jaded when dealing with China over the years. I told him about George Kates, an American antiquarian who lived in China in the 1930s and wrote a book about his experience entitled “The Years That Were Fat.” George Kates, The Years That Were Fat  Kates spent seven years in China and he said that in order to live in China the one thing that is most important is patience. So, yes, patience is the most important thing when you do business in China.  Another key to succeeding in China is that you have to like China.  If you don’t like China, don’t like the food, the people, the history or culture, it is probably not a place you should locate your business. You will get jaded quickly as I sense he has.

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How to qualify your suppliers in China

Had an interesting conversation yesterday with a local company.  The guy I spoke with detailed some of the problems they have had with one of their major suppliers.  Apparently, the supplier consistently struggles to meet shipping deadlines because they do not have the capacity to handle the increasing order QTYs and they have to subcontract a lot of production.   It turns out that this supplier was selected without a qualifying audit. And this is one of the perils of giving an order to a vendor whose facility you have never visited.  In other words they may not be who they say they are.  A GOLDEN RULE of China sourcing is this: never give an order to a vendor you have not yet qualified.  And by qualified I mean visited with a checklist in hand.

When you do an audit you should have a checklist of things to look for.  Some of the following come to mind:

  • In the office: Make sure the vendor has an organized office. If they are as busy as they say they are they should have several computers.  If you go into an office and just see just one terminal and a fax machine that is not a good sign. What if that computer breaks down ?  You may not be able to get an answer to a question for several days. Ask to see your company file with a record of all sample orders, revisions etc etc.  Ask to see counter samples which you have approved, as all should be clearly labelled and dated.   All this tells you if the vendor is on top of things.   If you have concerns about order capacity, then ask the vendor to show you invoices from completed orders of other customers.  Are the QTYs big ?  Are there multiple invoices from the same customer indicating repeat orders and customer satisfaction ?  These are things the vendor should be more than willing to show you.  In short,  a quick tour of the office will show you how organized the vendor is.  And believe me you do not want to work with an unorganized China vendor, all the more so if you have a design driven product when record-tracking of details is very important.
  • Subcontractors: Since so many vendors in China use subcontractors it is vital to make sure those subcontractors have themselves been qualified by your vendor. Ask your vendor what procedures they have in place to qualify subcontractors.  In fact any visit to a factory in China will usually include a visit to that factory’s subcontractors.  If your vendor does not volunteer to do this then you should suggest it.  If they balk at the suggestion, then that means their subcontractors are scattered and probably not at a convenient distance to the factory, which is not good for you.
  • In the workshop. Are areas well lit?  Are instructions to the workers posted? Are QC and Production areas clean?  Does the factory look busy? Is there any evidence the factory  uses child labor ? Is the person showing you around knowledgeable about the orders?  I remember qualifying a vendor a few years back.  I went to the factory and I discovered that the person showing me around, who told me he owned the factory, knew nothing about any of the orders on the workshop floor.  And I mean nothing.   He was either a very hands-off manager or was simply a Trading Company Manager posing as a FTY manager (plenty of those in China). But in either case it was a warning that I delivered to my customer.  And there are just so many more questions to ask when you are thinking about giving a vendor an order.

 

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How to pick a China Sourcing company

I had an email from a South African company last week. They were reaching out to me to help them source self-balancing electric scooters, those cool scooters you see when you walk down the street in any major American city nowadays.  It just so happened that the company emailed another sourcing company at the same time and as they failed to bcc the email recipients, I could see the other company. Out of curiosity I looked at their webpage and saw that this is a Chinese sourcing company based in China.  As is so typical with China based sourcing companies, this company promises that the importing process will be cheap, fast and reliable, that is as long as you use their service. The website is full of information but when you read much of it you realize it does not say much.  For example there is a tab on “how to import furniture from China.”  It looks promising but when you click on the tab the gist of the lengthy text is that if you want to import furniture you need to find a good supplier.  And that’s all. There is nothing about the myriad of problems associated with sourcing furniture in China e.g. a factory’s drying facilities, the quality of hardware and lacquers, fumigation certificates  etc etc, a few of the things that come to mind when I think about importing furniture from China. Much of the text is cast in ungrammatical language and when they advise you to watch out for scams they spell it “scums.”  They say they have 6000 suppliers in their data base.  It looks good but how many of these suppliers are active suppliers of theirs they do not say.  I suspect very few. This is the kind of China sourcing company that often comes up when you do an online search.  But it is not the kind of company I would advise someone to use.

The kind of company I would recommend using is a sourcing company that spells out clearly the risks of sourcing from China.  Such a company I came across a couple of weeks ago.  They are located in the Midwest and the owner is a Chinese lady who has been helping US companies source industrial products in China for 20 years now.  There is a tab on the website of this company labelled “essential China advice” and it pretty much spells out the obstacles that one encounters when sourcing in China.  I read through it and I think it is excellent in terms of the advice it offers e.g. anticipate mistakes before they happen so you will be in a better position to deal with them when they do happen, if in fact you cannot circumvent them with adequate foresight; Do not make assumptions about your China partners and/or China orders but be on top of everything at all times; Don’t be in the habit of taking big risks; Play by the rules in China. And much more advice along these lines.  After reading this I come away thinking, wow, doing business in China is costly, challenging and there is no guarantee of success, what I knew all along, but what so many people do not know when they contact China based sourcing company and are told the process is easy. Here is the link to the company Good US based China sourcing company

In short when you are looking for a China sourcing company, don’t go with the people who tell you it will be easy. Go with the person who tells you it will be difficult and that you will need to stay the course, no matter how difficult.  And that you may not always succeed.  Go with the person who tells you that you will sometimes need to show up in China to meet the people who are making your product and helping you grow your business, and not those who tell  you that you don’t need to go to China and that they will manage everything for you.  In other words, when looking for someone to help you with you China sourcing use your common sense.

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The Shanghai Friendship Store

While I was writing my blog post for last week my thoughts suddenly went back to my early days in Shanghai when there was only one store which sold overseas products, The Shanghai Friendship Store, located on Beijing Rd. just off The Bund. The store was established in the 1950s to cater to overseas diplomats and their families who wanted imported goods while living in China. And when I lived there in the early 1990s it was the one store in Shanghai where you could buy a pair of Nike shoes, for example, or a Sony transistor radio, some Gilette razors or just a jar of Skippy Peanut Butter.  The Friendship store also sold a lot of touristy Chinese chachkies and it was a popular stop with large tourist groups who came to China in those early days.

The name, Friendship Store, was hardly eponymous because the service was atrocious, and the clerks glared more than they smiled. But in those days, people in China were not as friendly as they are now.  Yet, the Friendship Store, in spite of its dreary Soviet –era demeanor, mustiness and sulky, sometimes downright unfriendly service had all the cachet of a Saks Fifth Avenue among the Ex-Pats living in Shanghai. If you shopped at the Friendship store, you had money.

You needed a foreign passport to enter the store and there were always guards out front checking passports and making sure that no locals slipped past the large Foo Dogs placed at the entrance.  There was probably as much security outside the Friendship store as there was outside the US Consulate on Huai-Hai Rd.  Of course nowadays you can go down any street in Shanghai and find a Tiffany’s or Wayfair, or a Coach outlet store or a McDonalds.  But this is all recent and up until the mid 1990s many foreign goods were simply not available in China. Unless you found them at the Friendship Store.

The Friendship store only accepted Foreign Exchange Certificates (FEC), the currency issued to foreigners living in or visiting China. Up until 1995 foreigners, unless they possessed a Chinese ID or work card, were not allowed to spend the local currency, the RMB, even in Chinese stores. They had to shop only at select establishments that accepted FEC like the Friendship Store or KFC.  If all you had on hand was FEC but wanted some RMB, so you could shop in the local stores with your ID, the first place you would go would be the Friendship Store.  There out front you would find no shortage of money changers who wanted your FEC so they could buy luxury goods.

While writing this I went on Google to see if I could find any images of the old Friendship store. I could not find even one.  Instead I found images of  the new breed of Friendship stores, in Beijing, Shanghai and Guangzhou, glitzy, high end type shopping malls. Everyone is now welcome and all the clerks are smiling.  In other words, the Friendship Stores are now actually promoting friendship.

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Worried about making that first trip to China ? Relax !

I was thinking today about the conversation I had the other day with the NYC lady who, at the end of this month, is headed off to China for the first time.  She certainly sounded nervous, knowing no Chinese as she does and feeling very panicky at the mere thought of getting lost over there, even though she will be staying in a reputable hotel and has already arranged her SIM card on arrival in China. I re-assured her as best I could.  Guangzhou, after all, is a very modern city and boasts a very modern, user-friendly subway that would be the envy of most cities around the world.  In addition Chinese people are very hospitable and one really does not have to worry about getting lost in a big Chinese city.  There are always people who will help you and signs in English are everywhere. Let me put it this way: you are safer knowing no Chinese and getting lost in a major Chinese city than you are getting lost on your own turf, that is in a major American city.  So she really has nothing to worry about, other than perhaps getting ripped off by an unscrupulous taxi driver.  Even that though can be avoided by taking taxis stationed at the hotel where she is staying and having the hotel doorman quote the cab driver on the fare.

But I thought back to my first trip to China.  Now that was scary. It was 1988, just ten years into Deng’s reforms.  I flew over on a Canadian Airlines flight from SFO to Beijing.  I remember the flight because NBC correspondent Keith Miller was on the same flight, flying coach, as well as the Canadian Olympic Basketball team.  The plane landed in Beijing on a warm July evening.  There was an enormous crowd of people at the gate coming out of Customs and not all of them were smiling.  There were very few foreigners in China then and anti-American, anti-Western sentiment was palpable.  To say I felt uncomfortable would be an understatement. My Chinese teacher in NYC had arranged for me to stay with her husband at their apt in Beijing but I had no idea what he looked like and all I had was a name and address. In those days most people in China did not have private telephones but used a communal phone so if for some reason we did not hook up I had no idea what I would do. Fortunately, after several minutes scanning the faces in the crowd (they were as curious to me as I was to them)  I spotted my name on a piece of cardboard in a sea of arms and I knew that must be my contact.  Needless to say I was very relieved.

Over the next few days going around Beijing I saw perhaps one or two foreigners, and that is all. Although a lot of people smiled at me, not everyone did, and on one occasion we were refused service in a restaurant because I was American.  My host was embarrassed by this but in those days that was par for the course in China.  It was not an easy place to be and I was very careful not to get lost. Nowadays when I go to China, I feel like I am home.  Imagine that !

But I kind of chuckle when people come to me nowadays and tell me they are nervous because they are going to China for the first time.  Believe, me, you have nothing to worry about !

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Some things to consider when you have a new product and need a mold

Someone came to me with a new product the other day, an artistic and fanciful light fixture that they want to have made in China. They have tried to find someone to manufacture the product here in the US but, as you would expect, the cost is prohibitive.  The person has had some rough molds and prototypes made here and suggested that he could send these to China and have someone there run some samples for him and then maybe a small production order.  Not a good idea, I said.  There are a few things to consider here.

  • The molds this person has made might not be compatible with machines in China In fact, I bet this would be China vendor response were he to send the molds to China.
  • Compatibility of machines notwithstanding, vendors in China stand to make a good profit if they make a mold for a customer and they do not want to forfeit this profit.  And this is why when you get quotes for molded products the mold costs can be all over the board, so to speak. If you ask three vendors to quote on a mold, chances are their quotes will be off by thousands of dollars, because someone is making a hefty profit from the mold. I had project a few years ago for which I needed a mold and the quotes, for the same mold, were anywhere from $3,000.00 to $20,000.00.
  • If you send a vendor in China a mold you may not be able to get the mold back. You never know who you are dealing with and the vendor may just take the mold and start using it themselves.

If you do get your mold made in China make sure you know who you are dealing with because sometimes a factory will claim they own the mold, even though it is your design and you have paid for the mold.  There have been so many disputes like this over the years between SME’s and vendors in China that you just have to expect it to happen.  Just go over to the China Law Blog for some stories. To protect yourself you should have everything spelled out clearly in writing, as to who owns the molds and when they will be returned to you, and you should also be sure you have legal rights to your design before you ask someone in China to make the mold for you.

Finally, really the best way to do a molded product would be to have the CAD work done here in the US, including drawings and 3-D renderings, and then to send these to China so a mold can be made for you. In this way, you can project to vendors in China that you are serious about your product, for drawings look official and will show all proprietary information. Should any dispute arise with them you will have a record of your designs, what you would not have if you asked the vendor to do both the CAD and mold for you.

Needless to say, these are all costs you have to expect to incur if you have a unique product that you want to have manufactured overseas.  But if you can do it, it is worth it.

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