How to schedule new vendor visits when in China

I got an email the other day from someone who was headed over to China to inspect an order and wanted to find out how they could perhaps meet some new vendors while they were over there. They were not leaving themselves much time as they were set to leave in 24 hrs when they emailed me. I told them that the best thing to do was to line up these visits well before their trip but as that did not happen this time, there were still two things they could do as follows:

1.) Do a vendor search by province and city on the Canton Fair website.  The website allows you to do this and it is very helpful if you want to locate vendors in a specific city, as this person wanted to do.  You can then type in the keyword for your product and you will get some results.  For example, when I typed in “toys” for Dongguan City in Guangdong Province I got 14 results. I think you can do the same on Alibaba.

2.) Work through the concierge at the local hotel. Depending on which hotel you are staying at in China concierges will do everything for you and this would include looking up factories that might be of interest to you. Of course they won’t be able to do much beyond giving you a name and number, but really that is all you need to begin. If the vendor has booked the hotel for you then you don’t want to ask the concierge for help with a project of this nature. The reason is that the hotel would most likely report to the vendor that you were looking for other vendors and your vendor would not be happy. I have seen this happen before. Vendors get possessive with their customers, especially if your orders are big, and they always want to keep an eye on you to make sure you are not running off to the competition on your off day. However, If you have booked the hotel yourself it is probably safe to ask the concierge to help you locate other vendors while you are in China. You can also perhaps ask someone in the hotel business center to do this for you but you would probably have to pay them for this.

Finally, it is a good idea if you are spending any length of time in a city or going back repeatedly to get to know some locals, perhaps a student who is looking for some translator work. This person can then help you on inquires of this nature and may be able to do things for you such as booking hotels and transportation. In fact when you go to the Canton Fair you will see hundreds of students outside the main hall looking for translator work during the fair. Knowing locals like this can be extremely helpful as you develop your business in China.  Just remember that if you do hire someone to help you out on a regular basis then you need to do so in accordance with the labor laws in China.

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In China nowadays its the foreigners who are poor

I saw an interesting article online the other day in which it was said that Chinese consumers now regard Louis Vuitton as a pedestrian brand. In one way it did not surprise me, for there are a lot of Chinese nowadays with a lot of money. Most of my old colleagues at the Shanghai Textile company where I worked as Deputy GM 20 years ago, now have more money than I could dream of. One of those colleagues bought a home in Toronto several years back and paid 1 million dollars in cash. Another colleague has two villas in Shanghai each valued at over 2 million dollars. But when I read the article about Louis Vuitton bags in China I thought back to a project I had a few years ago helping a New Jersey company source leather handbags in China. The guy who hired me, Neal, had seen the bags when he was at the Canton Show but had a hard time following up with the vendor. Her email did not work, the phone number he had for her did not work, in other words the same old frustrating exercise trying to get in touch with a vendor in China. But Neal really wanted these bags so he asked me if I could help him.    I finally was able to get ahold of the vendor and requested a price list. What she sent me was a list with many bags whose FOB China cost was over $1000.00. I couldn’t believe it and when I expressed my surprise to Neal, he just kind of nonchalantly said “oh yeah, I forgot to tell you they are not cheap bags.”   Still for someone who lived in Shanghai in the early 1990s when an average salary for a college educated company employee was about $ 50.00 a month, and Adidas or Nike were prestigious brands that company employees saved months for, the thought of a $1000.00 bag was something to get used to. And judging by my reaction when I read the article about Louis Vuitton bags it is still something I am not used to.

But as my old friend and Shanghai resident for 25 years now, Andrew, said to me a few years back “It used to be that the foreigners had money and the Chinese were poor. Now the Chinese have money and the foreigners are poor.” Times have changed. And nowhere more so than in China.

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Memories of Chinese New Year (CNY)

Chinese New Year is coming up. This year Chinese New Year, or CNY, as it is known to people who do business in China is on Feb 19th. The Chinese refer to Chinese New Year as 春节(pronounced “chun jie”) which translated into English is Spring Festival, another term you hear often in China. And Spring Festival is just that, a festival. It takes place over 4-5 days in which time all Government offices and businesses are closed and pretty much everyone in China is on holiday. I lived in China in the 1990s and the five or six Spring Festivals I spent there are among my most special memories of China. Here are some memories that stand out.

In 1991 I was invited to dinner on New Years Eve by a professor from the Shanghai Conservatory of Music. The dinner was held at the house of her mother, a Shanghai matriarch in her 90s. It was an older group of people and I enjoyed listening to everyone talk about the old and the new China, for this was just the first year of reform in Shanghai. It was a time when there was tremendous change in the air.

After a traditional New Years Eve dinner everyone sat down to watch the major New Years program on Chinese TV. 春节联欢晚会( pronounced in Chinese Chun Jie Lian Huan Wan Hui). Shortly before midnight the fireworks started and the sound was absolutely deafening. I had never heard anything like it. The only thing I could compare it to was the battle scenes from the first Gulf War which had just begun, images of which were broadcast daily on Chinese television. I was chagrinned because to this glorious pyrotechnic display all we could contribute were a few sparklers, which is all we had on hand. Everyone explained to me that there were four more days of the festival and that there would be more fireworks. Accordingly, the next day, the first day of the Festival, I went out and bought enough firecrackers, Roman Candles, Bottle Rockets, Sky Rockets, MD-80s etc to fill a duffle bag. But that night as I waited outside for the fireworks to begin, there was nothing but the sound of a few isolated firecrackers. And the following night it was also quiet. I asked some people about this and received conflicting answers. Some people told me there would be fireworks that 3rd night and some people said there would be no fireworks that night but on another night. Having just arrived in China my Chinese was not good enough to understand the complexities of Spring Festival and so on the final night of the festivities I decided, after a few sleepless nights, to go to bed early. Yet around midnight I was awakened by the sound of fireworks once again.  As fast as I could I put on some clothes, grabbed my duffle bag and ran outside to set off fireworks. It was more fun than I could have imagined.

After that first year I had learned on which days to set off fireworks, New Year’s Eve 大年夜( pronounced Da Nian Ye in Chinese) and the final night of the Festival初四 (pronounced Chu Si) and I was well prepared from then on. Every year I would go out and spend over $100.00 on fireworks which was a considerable amount in those days. Vendors sold them on the street and you could even buy them in the grocery stores. The bigger fireworks, the kind that in the US that you would need a license to set off were sold in specialty stores, nominally illegal, but allowed to operate as other stores.

My second year in China I was in Beijing for the New Years. My wife’s parents, officials in the Cultural Bureau, were stationed in Japan at the time so we got to use their apt across from the State Guest House. On New Year’s Eve, before dinner, I threw a firecracker off the balcony and then went inside. A short time later, as I stood in the kitchen with my wife, we heard a commotion outside and everyone was screaming. I asked my wife what they were saying and she said they were screaming “Fire.” We ran to the balcony and below us a fire was raging just about where I had thrown the firecracker. As a crowd of people gathered below some firemen entered the veranda put out the fire. A short time later there were loud knocks on the door and when my wife opened the door three or four members of the Public Security Bureau were standing there before us. They explained that someone had seen the sparkler thrown from our apt. Because officials lived in the building it was apparently under constant surveillance and the PSB knew immediately who threw the firework. They told us that the people whose apt the fire had started in were in Hong Kong and that they had to break down the door with axes to put out the fire. They confiscated all my fireworks and that pretty much put a damper on our New Year’s Eve, dinner and all. About the only positive thing was that when the people in whose apt the fire had started came back from Hong Kong, they were very nice about the whole thing and even laughed about it.

For another Spring Festival I was asked to be a guest on Radio Shanghai in which Shanghai’s top Radio personality interviewed me about my experience on Chinese New Year. I went down to the studio and sat there with her and she asked me about my experience in China on Spring Festival. In those days before there was much to watch on TV I imagine that ten million people must have been listening to that broadcast on that day. Of course I told the story of my first Spring Festival in China and also of the fire I started in Beijing. The interview was conducted in Chinese and although I was a little nervous I pulled it off I guess for the following year I was asked to be a color commentator for the Super Bowl which was broadcast on China’s equivalent of ESPN.

These days I can’t imagine that Spring Festival is much fun. Authorities in big cities have banned fireworks for some years now and these bans are strictly enforced. And this year, because of the Western New Year stampede in Shanghai which killed 37 people, public celebrations will be severely curtailed, not just in Shanghai but in many major Chinese cities. New Years in China is obviously going to be safer. But I don’t think I would enjoy as much as I once did.

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Watching the Super Bowl in China

As we approach the Super Bowl I like to think back to my early days in China when if I wanted to watch an important football game I had to go to great lengths to do so. In those days American sports were not broadcast on regular Chinese TV and there was no cable. But there were ways to watch.

My first year in Shanghai I wanted to see the 49ers play the Redskins in the first round of the NFC playoffs. I am from the SF Bay Area and grew up a 49er fan and I was a big fan of the team in the Joe Montana/Steve Young era so this was a game I did not want to miss. I called the Sheraton in Shanghai, one of two International hotels in China at the time, and asked them if they had CBS and if I could watch the game there. They replied that it would be OK but that I would have to check in for the night. In those days one night in the Sheraton cost $ 170.00, not really something I could afford but which I agreed to do nevertheless. That the game was to be coming on at 5 am did not discourage me from putting a small cache of chips, beer and candy in my backpack and putting on my 49ers jersey when I headed over to the hotel. In those days no one cared what foreigners did in China and I was determined to watch the game just as if I were back in SF watching, even if that meant drinking Qingdao beer at 5 am. To say I was excited would be an understatement.

I got up around 4 am to see the tail end of the Buffalo-Oakland game on the only foreign channel in the hotel. So far, so good I thought to myself. At 5 am I called the front desk and asked them to switch over to CBS which they promptly did. About 20 minutes into the first quarter, as I was reclining on the bed munching some chips, the signal faded and was then lost. I quickly got on the phone to the front desk to complain. Over the course of the next three hours the staff at the Sheraton did everything they could do restore the signal. They sent a group of 3-4 technicians up to the roof of the hotel to adjust the dish in the torrential rain. I will never forget the sight of these guys coming down to my room, the rain dripping profusely off their pochos to report to me in great earnestness that they were working on it.   But in the end and despite the heroic efforts of the Sheraton staff the game never came back on. I had to wait until the next day to read in the paper that the 49ers had won. I had paid $ 170.00 to watch 20 minutes of a football game. If there was any consolation it was later when I wrote to the Sheraton and in return received a couple of complimentary nights at the hotel.

The following week when the 49ers were playing the Giants in the NFC Championship I used my connections at the University where I was teaching to watch the game in the University Communications center. This was no mean feat given the strong distrust of foreigners in those early days of Deng’s reforms. At 5 am on game day a technician from the Communications Center met me at the building where the satellite dish was located. It was a fortress and there were security guards but I had clearance and I was ushered into a room which looked like Mission Control. I got to see the game on a big screen TV, the first one I had ever seen. I had dispensed with the beer and chips but had a great time watching the game and chatting with the technicians. The Chinese love sports and I think they appreciated my fanatical loyalty, even though American football was a game they did not understand. Unfortunately the 49ers lost. But at least I had found a more economical alternative to checking into a hotel. Or so I thought. When I asked later that week about watching the Super Bowl between the Giants and the Bills the University said they could no longer permit me to watch the satellite TV. And that was that. In retrospect I was somewhat relieved that the 49ers had lost, for had Roger Craig not fumbled with two minutes to go in the game I most likely would have been back at the Sheraton the following week.

After that first experience trying to follow the 49ers while living in Communist China things got a lot easier. Expat bars opened up and among them was a Canadian managed sports bar that had a satellite dish. If I didn’t watch there I got to know people who lived in luxury foreign residences where there was a satellite dish. So on game day I could always hop in a cab and go somewhere to watch the game.By the time I left Shanghai, in 1995, the Super Bowl was broadcast live on Shanghai Cable TV. It was still odd eating guacamole at 8 am but I won’t tell you it was not fun

That last Super Bowl in 1995, when the 49ers were playing the Chargers, was on Chinese New Year. I arranged to watch at a friend’s house and I brought along some fireworks, because it was Chinese New Year and I thought it would be fun to light off fireworks after each 49er score. The 49ers racked up 55 points that day and I am sure must have cut a very strange figure to some of the octogenarians in that alley every time I ran outside in my red jersey and bandana to light off some MD-80s and Roman Candles.

Watching the Super Bowl in China these days is probably no different than watching in America. The game is on everywhere. There are replica jerseys on the streets of Beijing and Shanghai on game day. There are Super Bowl parties everywhere. But I am glad that when I lived in China East was East and West was West. We had a window onto a unique China in reform that few people were privileged to gaze through. And even mundane activities, like watching a football game, were seldom mundane.

Enjoy the game !

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When your business grows, you need to grow with it

The owner of a small company in Chicago called me this week. His company manufacturers a kitchen product and they have been in business for about 7 years. In that time they have gone from one employee to eight. They bring in 3-4 containers a month from China and they are showing up in a lot of major stores now including Pottery Barn and BBB. The owner, Randy, told me that he has some worries as his business begins to grow, his main concern being that he has no idea who in China is making his product, as an agent there in Chicago handles all of his orders. As he rather bluntly but succinctly put it to me, “if this guy gets hit by a bus tomorrow then my business is screwed.” He is correct there. The lack of transparency in your supply chain should be a big concern, and the bigger your volume the more you should worry. Randy told me his agent there in Chicago seems reluctant to divulge the name of the factory in China to him, something he is becoming more uncomfortable about. At the same time he has an offer from another Chicago-based agent to handle the business. This new agent is promising him NET 60 terms. The current agent requires a 25 % deposit and payment in full once orders have been received so this is another reason Randy is looking at alternatives now. He called me to ask what I thought he should do.

My advice to Randy was to suggest a trip to China with his current agent to look at his product, see the factory and maybe inspect an order. He has not been to China yet and it is time, after 7 years, that he went. I told him that he has every right to see where his product is being made and to meet the people who are making it. If his current agent balks at this suggestion then Randy should begin to look for a new agent ASAP or, better yet, consider finding a factory and going direct to China with his orders. He seemed to think this was a good idea. I emphasized that his current agent has helped him to build his business so he should appreciate that and give this agent a chance to work with him on making his supply chain more transparent and efficient. But Randy’s is a very reasonable concern and his agent should know this.

Regarding, the new agent who is offering Randy NET 60 terms, I told him I have never heard of anyone offering NET 60 out of China. Randy said he believed the agent had a relationship with the factory that allowed him to offer these terms. That is very possible because most agents in the US have close relationships with factories in China. In many cases the agent in the US is a relative of someone at the factory in China. Still it just seems too good to be true and I don’t think any factory in China is willing to take that risk. I mean the goods could sit in Randy’s warehouse for a month before he was asked to pay for them under a NET 60 arrangement. Anyway, I told Randy not to put much credence into this offer but it wouldn’t hurt to do a small order or two with this agent to see if he honored the terms and, more importantly, how quality held up.

Overall, Randy is thinking in the right direction. His business is changing and he sees the necessity to change the way he does business.

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When you ship out of China just think FOB

I had an email a couple of weeks ago from someone who wants to ship an order DDU out of China. DDU stands for Delivery Duty Unpaid. It is actually an outdated term having been replaced several years ago by DAP Delivery at Place. In a DAP transaction the seller is responsible for all costs up to the point where the product is delivered. If for example the goods are going from Shanghai to Columbus, Ohio the seller would be responsible for all costs up to delivery in Columbus, with the exception of Duty and administrative costs to get the goods from the port in the destination country to the final destination. This sounds a lot like CIF, the difference being that in a CIF transaction the seller is responsible for the cost to deliver the cargo to the destination port only. At that point the buyer takes over and assumes all costs up to the point of delivery.

Since I have never known anyone to ship an order out of China that was not FOB, and since I know that Chinese vendors do not want to assume risk, what a DAP transaction involves for a seller, I was a little skeptical when I heard about this order. I went online to do some reading about DDU transactions and realize that the only reason a Chinese vendor would consent to DAP is that it allows them to add costs to the project; the vendor selects the carriers and pays VAT and other charges up to the place of delivery. If the vendor is in cohoots with a forwarding company in the US then the charges to deliver the product from port to destination could be excessive. And if you don’t pay those charges they will not deliver your order. Of course, for a first time buyer out of China who has no logistics experience or agent to work with DAP might sound like a very easy solution. But in fact DAP could be both expensive and problematic.

In general anytime you order out of China you really should be looking for FOB terms FOB stands for Free on Board and the seller and buyer share responsibility equally, the seller up to the port of embarkation of and the buyer once the goods have been loaded on to the vessel designated by the buyer or their shipping agent. If you approach a vendor in China and they suggest other then FOB, be skeptical and do some research. Of course there are exceptions to FOB but they are rare for small importers.

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The day 40,000 people visited McDonalds in Beijing

I saw the other day that McDonalds has opened its 2000th restaurant in China. To think that there are now 2000 Golden Arches in China because when I first lived in China there was one, in Shenzhen. The first McDonalds outside of Shenzhen opened in China in Beijing in 1992 and I was fortunate enough to have been there.

I remember a few things about that first visit to McDonalds in April,1992, namely how crowded it was (according to McDonalds there were 40,000 customers on that first day),  the line of people taking snapshots of the Ronald McDonald statue outside the restaurant and how I had to summon my courage to eat a Big Mac with cheese because the person behind the register could not comprehend a special request to make a Big Mac without cheese. After explaining to him that I did not like cheese I looked behind me at the great wall of people waiting to order and decided that I had better dispense with the special request lest it bottleneck production and create a major incident in what was billed as the largest McDonalds in the world. .

Thinking back to my first time at McDonalds in China I can remember how in those early years of Deng Xiao Ping’s reforms about the only two American foods you could find in stores, not counting the ubiquitous Coca Cola which had been in China since the 1930s, were Tang and Nescafe instant coffee. The popularity of Tang in China was hard to fathom since it had not been popular in the US in 20 years. I can only speculate that someone in the Nixon entourage had brought over a jar back in 1972, ( maybe someone in the State Dept thought it sounded Chinese as in Tang Dynasty ?) and the Chinese were hooked from then on. Who knows.

In those days then there was a buzz in the foreign community anytime an American brand was spotted in Shanghai, whether that was a short-lived Sees candy store on Jin Jiang Lu or a box of Ortega Taco Shells that somehow had found its way into the Soviet era grocery store on the corner of Wulumuqi and Hua Shan Lu. There was a randomness to it all that was exciting.

Beginning about 1992 or 1993 western style supermarkets started to sprout up all over Shanghai. They were big but did not offer much variety meaning you might find an entire aisle dedicated to one brand of hot sauce. The locals were slow to accept the supermarkets because they were more expensive than the local markets, did not except grain coupons and there was a tendency to distrust anything new. Imagine a local Chinese shopper in those days trying to figure out what a jar of Skippy was. I remember vividly how big but how eerily silent and empty the supermarkets were in those early days. You wondered if they would catch on.

If you really had to have that box of Pop Tarts or some Gray Poupon then there was the Wellcome Store, the Shanghai ex-pat equivalent of the Army PX, located in Shanghai’s most well-known ex-pat compound, the Portman ( now the Ritz Carleton Shanghai). But everything was expensive in this store so we did not go there but on the most special occasions or maybe after we had had a bad “China Day” and just needed a cup of Swiss Miss hot chocolate to keep our China life in perspective.

Nowadays when you go to Shanghai you can find anything everywhere. Whenever I go to Shanghai and pass by a bakery I like to recall those Sundays when I would get up early and embark on a two hour journey via bike, ferry and bus to the middle the old French Concession. There was a bakery there and they had a rare commodity that I was after. It was called bread.

Happy Thanksgiving

Some things to keep in mind for first-time China goers.

I was on a skype call with a prospective client the other day. She has a new product/business and would like to start sourcing in China. She has approached some manufacturers here in the US but with no success. Not only are costs to make her product, an apparel item, prohibitive in the US but she said the response she received from companies was tepid at best. Some of them didn’t even respond to her which is odd given her professional background and serious level of inquiry.

She had some questions for me which I answered. Her questions and my answers might be useful to others who are thinking about sourcing in China so here they are:

Question:

Does one need to speak Chinese to do business in China?

My answer:

No, it is not necessary and there are plenty of people who do business in China and who do not speak Chinese. But here is a fun, and I think reasonable way to look at it: not knowing Chinese will never help you and may hurt you. On the other hand, knowing Chinese will never hurt you and may very well help you. The big picture is that the Chinese want you to respect them and one of the best ways to show them respect is to make an effort to learn their language. This does not mean you have to go down to your local college first thing Monday morning and sign up for an intensive Mandarin course but you should at least  learn some greetings and maybe even a few proverbs, your knowledge of which will make a good impression on the people you meet in China. Just remember, big companies can afford to hire locals with good English skills to help them in China. Small companies must do everything on their own.

Question:

How do I find and settle on a supplier?

My answer:

Locating good suppliers is just a process of establishing contact, sending out samples and requesting counter samples and working with vendors to get to your target costs and achieve product quality you are happy with. One thing to pay close attention to when you are feeling out suppliers is how well do they communicate with you.  Do they reply to your emails promptly or do they make you wait ?  Are their answers to your questions perfunctory or thoughtful ? Do you have a feeling that they want your business ?  Just remember this: if the communication is sporadic to begin with, it will not be any better once you order. And in fact it may get worse as you ask more questions requiring more thoughtful and detailed answers.

If you are working with printed patterns then you will need to provide vendors with all artwork and pantones. I have often said that one really needs to finalize design before approaching vendors. Some of these vendors are very busy and if you approach them with a design and then change that design along the way they get frustrated. And it sends them the message that you are not organized/professional. So the first step is to finalize your design and have all the artwork on file.

Question:

How much will it cost to get samples?

My answer:

Cost of samples will vary depending on your design. If you want to use printed fabric with your own design, of course there will be a charge to cut a screen (usually $100-$200.00). If you have definite material or fabric requests then you need to send your vendors swatches and let them source for you. Often when you have specific material requests vendors may not have adequate stock of that material on hand and may have to use a substitute fabric. This is OK. A note on zippers: You should specify YKK because Chinese zippers are pretty bad. And even with YKK you have to be careful because there are plenty of fake YKK zippers in China.

Question:

What should I do to protect my designs/product in China ?

My answer:

For protecting all IP it is a good idea to register your trademark in China as well as in the US/Canada. The cost to register a trademark in China is 600-1000 USD if you use a Chinese lawyer and probably 3 or 4 times that much if you use a lawyer in CAN or the US. The key about IP is this: Don’t be paranoid about having someone take your name in China. Big companies are most often the targets. But don’t be nonchalant about your IP either. Stuff happens in China and you just want to do all your DD and take the same precautions you would take in your own country when starting a business, and this includes registering all IP.

Question:

If I work with you how can you guarantee that I will get what I order ?

My answer:

No matter who you work with when you do an order in China and no matter how good you think your supplier is you can never be 100% sure that what you order is what you are going to get. All you can do is try to reduce your risk. And this means vetting your suppliers before you give them orders, showing up occasionally to make sure they are keeping your company’s standards in mind, and checking your orders in China before they ship and you have to pay for them in full.

The usefulness of due diligence when evaluating a vendor in China

What people are saying about Mulberry Fields
“What you say is absolutely true about what you need to do in order to succeed in China.” – a company in Italy

I recently had a customer run a credit report on a vendor he thinks he wants to do business with. The report came back and everything looked OK. The Company is in good financial shape and has had no litigation on record for the past three years ( not really a long time by which to measure but still acceptable). My customer had met them at a trade fair in NY this Spring and really likes them. He said they had a very professional presentation and very good products. I looked at their website and I must say it is very nice. They do projects for some big global companies so quality is probably pretty good. And most importantly for my customer, who is focused on cost, their prices are very good.

But after doing some research I realized that this company is just part of a big 11 company HK/Taiwan/China conglomerate. This somewhat concerns me because conglomerates can be very bureaucratic. And in China some conglomerates include bankrupt state run companies which may indicate that management leaves something to be desired (the government does not want these companies to go under so they put them in a group of other more successful companies). Most importantly from my own experience working for small companies that sourced in China from big suppliers, if the PO QTYs are not substantial you often do not get the service you want. An Account Manager is usually assigned to your account and things go well or not depending on the dedication and efficiency of the manager. You very rarely, if ever, have a chance to contact with the GM or owner of the company. When you work with a smaller company you do. This is not necessarily to say that small companies are always better. Sometimes they are and sometimes they are not. The point is you should be aware of how a vendor’s size may impact your order. Or, as I put it to my customer, he will go from being customer # 1 at his current vendor to just another customer at the bigger vendor. That is still perfectly OK if what he stands to gain is a lot. But if he is the kind of person who likes to involve himself with production and is in the habit of working closely with his vendor, working with a big vendor might be frustrating.

My customer is planning a trip to China to visit with this company. He has already said that if he likes them he will give them an order. My advice to him was to try to find some other vendors in the same geographical area and to visit them as well. He should then be able to see who he feels most comfortable with. It may be that the company he met in NY will be so attractive to him that he will not be able to say, no. Or it may be he will be put off by their size and the fact that he has no access to decision makers and will decide to go with a smaller vendor who may offer more service tailored to his needs. We shall see.

Due Diligence is such an important concept when you do business in China. Here are some more posts on that:
Product saftey standards
Selecting a sourcing company
The basic due diligence on your China vendor
What happens when you do not do your due diligence
A red flag vendor

http://www.theeastasiaco.com

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China vendor technology – what to look for

What people are saying about Mulberry Fields
” I REALLY do enjoy your posts and find them informative and helpful.” – a Wal-Mart supplier

Vendors love show off their latest equipment from Germany or Japan. Of course the more advanced your vendor’s equipment the better for you, until you consider that imported equipment costs much more to repair than local equipment and parts may take long to order. So you should ask your vendor what they do if they have a problem with a machine ? Can they get parts locally or do they need to get them from overseas ? And always ask them to demonstrate the machines for you. Just because they have fancy, state of the art equipment in full view does not mean it works. I have been in many factories where critical production equipment was broken or in a state of disuse. And I remember one printing mill in Shanghai that bought an expensive piece of machinery from Germany but didn’t know how to use it. So it just sat there ( for years I presume).

When you visit a factory it is always a good idea also to look at the office in the factory to see how the vendor is set up for communication. Do they have just one computer in the office or are there a few ? Are they new computers ? Good brands ? Is there a scanner ? Fax machines ? Telephones ? In short, pay attention to this because communication is so important when you do an order in China.

Finally, always make sure to ask your vendor about back-up power supply. Does the vendor have a generator on site? Power outages are a commonplace in China, esp in the summer. So you want to make sure your vendor is prepared for them.

Just a short list of things to look for when you visit a factory in China.

http://www.theeastasiaco.com

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