David Dayton just published another insightful blog post about China sourcing: Foreign Mental Blocks. It lists a few issues that many importers have a hard time to understand. One of the points he raises is that "Working with China is … [Read more...]
Is direct sourcing really the overall trend?
Over the past 15 years, foreign buyers of Chinese goods have developed direct relationships with manufacturers. Many of them have tried to bypass Hong Kong trading firms and Chinese "import & export companies", in search of lower prices … [Read more...]
Negotiate about prices, not about quality standards
I had a funny conversation with one of my clients’ suppliers. My inspector had found too many defects and had to reject one of their shipments. I was also in the factory, monitoring the whole thing. I started questioning the supplier about … [Read more...]
China business: avoiding intermediaries
In my previous job (in a small trading company based in Hong Kong), I quickly concluded that it was better to deal directly with a retailer, rather than a wholesaler who sells to retailers. With few exceptions, retailers are less sensitive … [Read more...]
Should you know something about your Chinese suppliers?
Very few importers make an effort to know the exact financial standing of their Chinese suppliers. China is viewed as a fundamentally opaque country, where "nobody knows who the real boss is anyway". For example, meeting a representative of … [Read more...]
Contacts of “good factories”
These days I am exhibiting on a trade show (China Sourcing Fair in Hong Kong). Every time I attend a fair to find new clients, I am amazed by the number of buyers who say “Oh, so you visit factories all over China… You must know some … [Read more...]
Use experienced service providers, not Chinese connections
Every year, I guess thousands of companies decide to start importing from China. Some of them already exist, and others are founded specifically for this activity. But overall, most of these companies know very little about China. They … [Read more...]
Quality system: a checklist for factory auditors
Factory audits, like product inspections, need to be performed in an objective manner. A buyer that pays for audits of two factories should be able to compare the findings and use them to pick a supplier. It means auditors should work … [Read more...]
Buying from a large private Chinese factory
Small importers tend to have the feeling that buying from a large factory is more expensive but more reassuring. There is some truth regarding the higher prices, but risks are not necessarily lower. Buyers should be aware of the different … [Read more...]
The motivations of Chinese state-owned enterprises (SOE)
The Financial Times published an interesting article ("An accident shows how China treats consumers") that describes the view of Chinese state-owned enterprises (SOEs) regarding the export of unsafe products. They represent a large chunk of … [Read more...]