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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Giving your vendors enough time on orders

It is very important when you give an order to a China vendor to know exactly what you need and when you will need it.  A case in point is a company I am working with now.

This company has been developing some new products for a big US trade show at the end of February. Up to this point we have been working primarily on designs and approving prototype samples.  I sent my customer an email at the beginning of the New Year telling him that we had to take an overview of all the projects because of Chinese New Year,  when we could expect a significant slowdown in activity.  In reply, my customer told me that he will need a very large number of samples for the show.  I was a bit surprised by the large QTY of samples as was the vendor to whom I had passed on my customer’s request. Fortunately I had inquired of my customer well ahead of time.  Had I not asked him about his show-sample requirements I don’t think he would have told me until it was too late.  There are sometimes so many parties involved in a China production order that you really need to be aware of this and give the vendors plenty of notice so that they can plan accordingly. For this particular order the CMT FTY has to get the fabric from the print mill which as it turns out is on a different holiday schedule than the CMT factory.  Things will be tight but we should get the samples in time. 

Another problem with this current project is the packaging.  I raised the issue of packaging a month ago with my customer but with six weeks until the show the packaging specs are still not complete. The result is that it may be very hard for my customer to have his packaging printed in China in time for his show.  He may very well have to print in the US at far greater cost.  Many customers tend to neglect packaging as they focus on product but the fact is that packaging can take a lot of time and sometimes needs just as much attention as the actual product(s).  

So where we are now is that we are slightly rushing vendors to get everything ready for the show.  Rushing vendors is not a good idea because as my customer, from his own experience,  has acknowledged quality tends to suffer.  I would add that price also can go up – especially when you are dealing with first-time vendors.  In short, give yourself plenty of time. In my customer’s own words: “the earlier we convey our needs for the show, the better off we will be !!!”