The small buyer’s dilemma in China

Sourcing New SuppliersOver the years, I have worked with many small and midsize importers who were looking for a good supplier. A very common question they have is “what kind of factory should I look for?”.

The problem is simple to grasp:

  • Small factories give low quotations, but are not very reliable — especially when they need to develop a new product.
  • Larger factories are (usually) more reliable and more professional, but are unwilling to give low prices to small buyers. And they are more likely to bump small orders behind more significant ones, to subcontract them, or to assign a junior salesperson for followup.

So, new-to-China buyers keep trying new suppliers that are at a low price level, and think “I am sure there is at least one good factory for me in this country”. This search can last for years.

Where it gets really, really difficult is for buyers who have a quality standard above average.

A few ideas to solve this dilemma

Maybe China is not for you

Your orders might be too small for China. In that case, stop wasting your time looking for a supplier here.

Don’t be afraid of working with a trading company

If your orders are small, maybe an intermediary can place them in a small workshop. You can’t deal directly with a small structure that doesn’t employ any English-speaking staff.

In this case, choose a trader with good customer references and a good knowledge of your products. And take control of the QC inspection process — you should be the one deciding whether the goods are acceptable or not.

Try to seduce a large factory

One of the big guys might be willing to decrease your prices. Maybe you can convince them that you will be a good reference to get new customers in your country. Maybe they think they can use your designs to “wow” prospective buyers. Or maybe they will see that your business is easy (mostly repeat orders, few new developments).

What some importers do is they give their complex products to a big factory at a higher price, and make most of the margin on simple products that are made in smaller, cheaper workshops.

Start narrow, and start small

When you test a new factory, give them 1 or 2 new products. But don’t expect them to devote all the engineering attention required for developing 15 new products.

Start with small order quantities, but not so small that your supplier can’t convince its sub-suppliers to serve your needs.

If possible, let the new factories choose which type of product they prefer to make in low quantities. A small production run of some of your models might be impossible.

Don’t get stuck in one area

Sometimes there are many manufacturers of one product line in one city. But in China, industries are often spread out in several provinces. If you can’t find your luck in one city, go and explore some other area.

What do you think?

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Comments

  1. says

    Many people also make the mistake of only considering one specific product instead of a full range of products that one supplier could make after it is proven acceptable.

    By offering the wider business scope, a supplier may be more excited by the initial small orders.  Of course, it does not help to artificially boost volume expectation and then keep tiny orders, because all the investment in selecting and developing a supplier will be wasted when the supplier “drops” its client later.

  2. amy says

    Hi , Etienne , I am amy from China , i am also one supplier of machinery ,but some of your opinion i donnot think it is right , Big quantities cannot make vendors more excited ,for such situtation , some of suppliers will regard this is not firm offer

  3. ELSK says

    Great post. It is a dilemma that many smaller companies face. When you are small and do not have the resources to travel often to China to follow up on the production, it is for sure worthwhile using a contractor. Agree that you need to be the one approving the final product though. At http://www.elsk.com, we have chosen to manufacturer our products close to our homemarkets and office, so we can visit the suppliers often and have a close dialogue with them.

  4. MO says

    Renaud,excellent job. thanks for the great info, I am building a new house and thinkin to import from china to save some money but not on the expense of quality. I know I need some expert to help me in sorting that out. is there a reliable agency that can help me achieve that.i need windows doors and flooring tiles and others. what advice do you give me if you would?

    • says

      Which country are you in?
      I don’t know what to advise to you… Try to work with a trading company that will buy all the parts here and there and consolidate them in 1 shipment.
      Or maybe have a look at Aliexpress.com.

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