If you want to do business in China, you need to spend money. Period

Last month someone emailed me asking me if I could help her source a promotional product in China.  This lady runs a small non-profit here in the SF Bay Area.  She said she had contacted some vendors and agents on alibaba but, having never done business overseas, was nervous about moving forward with them.  I told her I could help her and quoted my fee, which is not substantial.  She seemed to waiver and then told me that the Chinese  agents had quoted her a lower fee.  I generally don’t advise using Chinese sourcing companies for reasons I have written about here, and I told her so.  After a couple weeks of going back and forth and answering her questions as best I could I finally decided to give her the name of very reputable French sourcing company in China, for I had come to the realization that she was very reluctant to spend money on this project.   The French company charges less than the Chinese company and although they are staffed with locals they are owned and managed by a French national with many years’ experience in China. They have a good reputation, are responsive and I think their sourcing fee is very reasonable, although things can get expensive, in terms of the costs associated with follow up,  once they locate a factory for you.

About a month passed and the lady emailed me telling me she had had some discussions with the French company and was “weighing her options.”  She asked me to advise her.  I told her that with her QTYs and target costs, neither of which is substantial, she is going to need all the help she can get in finding a vendor in China who is willing to take her order.  And if she is serious about doing this she needs to see that she will have to invest some money. In spite of the seductively low costs one sees advertised on B2B sites like alibaba and Global Sourcing, sourcing  overseas requires serious investment and demands a serious, long-term commitment.  In other words if you want to source in China, but are not willing to spend the time and money to do so, my advice is simple:  forget it.

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Minor changes are not always minor

I had an email from a prospective customer a couple of weeks ago. She detailed for me the problems she had been having with a garment FTY in Zhejiang , China. She wrote as follows: 

The new factory is making me crazy!  They simply are not following instructions. Their pricing is low, which is what attracted us and I made a visit there to meet the owner and my liaison as well as to tour the facility and I was quite pleased. We proceeded with sample preparation. I have been back a second time to work through the construction issues with them. I literally sat down in the sample room and showed the sample makers two times how to construct our unique waist band seams. They then made me a good sample before I left, however, they have not gotten it right once since I left! I requested additional samples just to be sure that they were on top of it, but not one right since.  

There are myriad possibilities at work here as follows: 

1.) The FTY is not happy with her order QTYs and is not prioritizing her orders. They have other orders which they regard as more important.

2.) There is an internal communication problem so that her instructions are not being passed on to the workers. (bad FTY management)

3.) There is a costing issue somewhere with the waist band.

4.) There was a problem with her own communication with the FTY

5.) The FTY is under financial strain as are  many small FTYs in China nowadays and it is just not able to focus on production.

6.) This is simply a bad FTY or a FTY that does not have the expertise to do this particular order. 

It is hard to know what is going on without having seen the FTY myself  but I suspect it is a costing issue. If a factory fails to do something in spite of your repeated directives it is usually because there is an added cost somewhere.  Some factories in China work on razor-thin margins so that the slightest increase in cost- resulting from a revised design or production step – can make the difference between profit and loss. I remember working with a FTY once that was reluctant to discard a few rusted nails that I had found in a product and asked them to remove. For me it was just a nail. But for the FTY disposing of those nails represented a loss. So what did they do ? They set them aside and tried to reuse them when I wasn’t looking which I found more interesting than aggravating. This is how many factories think.  For this reason you should never assume that a minor change for you is a minor change for your FTY as well. In many cases it is not.   

Returning to the example above, the fact that the FTY above has not been able to do samples to the customer’s specs – after she herself went there to provide guidance – and has not been able to communicate to her why they are having so much trouble is a warning sign that she should not ignore. This is a FTY she probably does not want to work with.