Crowdfunding has emerged as one of the main sources of funding for hardware startups (and many other ventures). Here are a few impressive statistics: 15 million people have backed a Kickstarter project since 2009. Backers pledged a total of 3.9 billion USD. More than 9 million people have backed an Indiegogo project since 2008. However, entrepreneurs need to think about all the pros and cons of raising money this way. If you are in this situation, here are are some … [Read more...]
On-Time Delivery for your New Product Made in China? Possible?
We have seen this situation a number of times: An American or European company designs a new product They find a manufacturing partner that has some general experience in their industry (but has never made that precise product, since it is totally new) Since the buyer needs flexibility and service, and can't afford high prices, they tend to work with a small or medium sized factory (fewer than 500 employees, and often fewer than 200) All the development (NPI) work gets done, but … [Read more...]
How Blockchain Can Help Importers & Regulators Manage Supply Chains
I came upon a great article entitled The Time Is Now (available only to ASQ members), by Narahari Rao. It describes how orders, invoices, transactions, testing & inspection reports, material certificates, and other critical pieces of information could all be saved in a blockchain database. What is the advantage? Let's say your company buys products that require materials from different suppliers and sub-suppliers. To understand what happens in your supply chain, manage risks (think … [Read more...]
Transferring Production from China to Vietnam to Avoid Tariffs
I am writing this from Vietnam, where the tariffs imposed by the Trump administration on made-in-China goods mean new business opportunities. Many companies import products from China to the US and have seen their margin annihilated. A logical reaction is to look at other places to have their products manufactured. And Vietnam is often in the short list of alternatives. If you are in that case, what are the key questions you should ask yourself? Access to component suppliers If you buy … [Read more...]
How to Pay Chinese Suppliers by T/T Payment (Bank Wire Transfer)
T/T stands for Telegraphic Transfer. In other words, an international wire of funds from the buyer's bank to the seller's bank. When a Chinese supplier asks for a T/T payment, what they really mean is they want a wire transfer. (Technically, a T/T is not exactly the same as a wire transfer through the SWIFT system, but the vast majority of people think of them as the same thing.) A wire transfer based on SWIFT is the most common payment method in international trade with Asian countries. … [Read more...]
What Simple Checklist for More Reliable Quality Inspections?
A simple checklist to follow day in, day out, is a highly undervalued tool. Here are a couple of examples where the value of checklists has been recognized: In aviation, checklists have been used for more than 70 years and have undoubtedly avoided many accidents. In healthcare, a study showed that following standard checklists saved 40% of lives. What is another activity where someone might forget something important? A quality inspection in a supplier's facility! People ask you … [Read more...]
Communication with Chinese Suppliers: Banging Your Head Against the Wall?
Over the years, Chinese manufacturers have gotten better at understanding their overseas customers. And, in many industries, their quality has tended to improve. However, communication with sales people is still an area of frustration for many buyers. In many factories, junior English-speaking employees are placed in a sales role. Their basic function is to translate what customers write/say to the rest of their organization, and vice versa. Over time, as they gain in experience, they are … [Read more...]
Upwork vs. a Sourcing Agency for Managing Your China Production
Some importers take a shortcut as they set up their supply chain, and pay for it many times over a few years later. I want to cover one of these shortcuts today. We have had a few clients come to us after being let down by an Upwork freelancer who was sooo great at the start... before things went downhill. (I get it -- it seems convenient, fast, and cheap to go to Upwork and get a freelance sourcing agent. After all, you may be selling goods online through the “Fulfilment By Amazon” … [Read more...]
How Does the VAT Rebate for Exports out of China work?
In most cases, importers don't need to worry about the way their supplier handles the VAT rebate. They are usually better off negotiating a price under the FOB incoterm and avoid worrying about the complex paperwork involved in getting a rebate on the VAT paid on components/materials. However, once they start looking deep in their supply chain, they can identify risks as well as opportunities for saving money. And they might notice that their supplier pockets a margin much higher than they … [Read more...]
What is the “AQL” (Acceptance Quality Limit) in simple terms?
What Does AQL Mean? 'AQL' stands for 'Acceptance Quality Limit', and is defined as the "quality level that is the worst tolerable" in ISO 2859-1. It represents the maximum number of defective units, beyond which a batch is rejected. Importers usually set different AQLs for critical, major, and minor defects. Most Asian exporters are familiar with this type of setting. For example: "AQL is 1.5%" means "I want no more than 1.5% defective items in the whole order quantity, on average over … [Read more...]
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