Never think you are a big fish when you source in China

If you are sourcing in China you have to remember one very important thing:  that your product may not be a priority for the vendor with whom you have placed an order.  Most factories in China, big and small, have a myriad of production orders going at any one time.  Walk into any workshop in China and you will likely see orders from all over the world, from the US, from South America, from Africa etc etc. I am always amazed at the global scope of production when I visit factories in China.  And some of these orders can be huge, tens of thousands of pcs depending on the product. You might think your 5,000 pc PO is a big deal but for your vendor it may only be a small order when compared with all the other orders he/she is doing at the moment.  I remember working on an apparel project a few years back.  The company that had retained me sent me to China to do an inspection of a 20,000 pc order.  For my client it was major order.  But when I showed up at the factory I realized that my client’s order was the smallest of several orders going at the same time.  The vendor told me that 20,000 pcs was not a big order and as such I could clearly see that it was not being given priority by the workers or management.  They told me a big order was over 100,000 pcs.  I was surprised and wondered if my client knew this as well.  I can’t remember but I don’t think they did.

Can you fault the vendor in this case ?  Not really.  They have to prioritize their orders and their business. It is only natural that they are not going to give a small order priority over a large one.  Ideally they should communicate this to their customer but in China it does not work that way.  Vendors can be pretty lacking in communication and that is one of the big challenges to sourcing in China. Can I fault my client ?  Somewhat I think because they failed to acknowledge that the vendor had other orders at the same time, even though they had been to the factory, just a few weeks before I was there, and had seen the other orders in process.  They simply believed that their order counted most. So when it came time to get the order out and the vendor was behind my client just pushed the vendor, the end result being that the relationship turned sour.   Had my client anticipated a delay and built some extra time into the production and delivery schedule to accommodate for the low priority their order was given things might have proceeded more smoothly.

So how can you know if the vendor is prioritizing your order or not ?   Well the first step is before you do business with a China vendor, ask them about the size of their orders and what they regard as a small order, what they regard as a big order etc etc.  They will probably inflate these numbers wanting to lead you to believe they have and can do big orders.  But their reply will nevertheless give you a very rough idea of what to expect when you place an order with that particular vendor. For example, if you meet a vendor at the Canton Fair who makes shoes and s/he tells you that an average order for him is 5000 pairs of shoes and that a big order is 20,000 pairs, you will know that if you give them an order for 1000 pairs, it will likely not be a priority order for them.   You might even ask a vendor to show you a hard copy of an order for a large QTY.  You can tell them that you just want to verify that they can do what they say they can do.  And ask a vendor before you place an order what other orders you are going to be competing with ?  For some reason this is not a question that most importers are in the habit of asking their vendors, their thinking being that only their order counts.  But I don’t think it is a bad idea to try to find out what are going to be the challenges and potential delays once you place your order.

Finally, if you can, make a trip to China to inspect your order in process.  Simply by walking around a workshop while your order is in process will give you a very good idea of how a vendor is prioritizing things.  If only a little space is being devoted to your product, well, you know you have a problem in spite of your vendor’s reassurances.

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Sourcing on alibaba. Questions you need to ask

What people are saying about Mulberry Fields
“Your blog speaks to the many issues I have experience with when doing business in China”  –  a California company

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Just as I go to Walmart if I need a pair of cheap gardening gloves or some Tupperware, so if I really want to get some quick quotes on a low value added product I will look on alibaba. Alibaba can be very useful for getting an idea of how much a product costs. Even Chinese vendors use alibaba as one of my long-time Chinese friends/associates has told me ( much to my surprise). In fact I know now that if I ask a factory about a project, and one component of that product is outside their area of expertise, then they will most likely try to find a subcontractor, you guessed it, on alibaba.

I am sure there are good vendors on alibaba. But it seems there is a lot of carrot-dangling on alibaba as well. The prices that you see on alibaba are low, to be sure, but they are usually tied to very high MOQs. And my impression is that there are a lot of 3rd tier vendors on alibaba. These are very small vendors who sell primarily on alibaba and who do not attend big trade fairs abroad or in China. In other words, probably not vendors you would want to deal with.

I always think it is useful when you meet vendors on alibaba to ask them two questions:

1.) Do they attend trade fairs. Attending trade fairs is important because it tells you up front that the vendor is an established business with capital to invest, and very likely has some overseas customers. If they answer ‘yes” then ask them which shows. Then go to the websites of the shows they mention to see if they are listed on the exhibitor’s list. “Trust but verify.”

2.) Ask your alibaba vendor if they have a local website. If they do not or they tell you it is “under construction” then I would be wary about doing business with them.

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China vendor communication – how to evaluate

I have a project now sourcing some BOPP packaging. I have reached out to between 10 -15 vendors with whom I have been communicating over the past couple of weeks. Some of these vendors I have met and some are brand new to me. There are often multiple emails in a day as I have a lot of questions – all part of my screening process. I have noticed that there are certain vendors who are very enthusiastic at first, answering every question I ask of them. But then after a week or two, their replies do not come in as fast. It is as if they have lost some interest in the project – after providing me with initial costs – and they just don’t feel like answering all the questions I throw at them. Other vendors are very good and answer everything. These are of course the vendors you probably want to deal with although there is no guarantee that at some point they also will not become unresponsive. In any case, there is tremendous value in this exercise because in just a few weeks you can get a pretty good idea of which vendors are responsible and which vendors you simply want to eliminate. Those of us who have done orders in China know how important, in fact how critical good communication is.

So I have gotten in the habit of making a list of questions that I ask vendors e.g. shipping terms, printing and mold charges, QC process etc etc. that I like to disperse over several emails, the goal being to drag out the process a bit just to see who are the best communicators among the 10-15 vendors I have targeted. You would be surprised how well this works. As I tell my clients, if it is this difficult communicating with vendor x when just requesting prices, imagine how difficult it will be at production time !

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