Yahoo Finance recently ran an article entitled Think you’re buying on Amazon? It’s actually from Alibaba. A few people in the US noticed that many products they can buy on Amazon.com can also be found on Alibaba.com. Let's unpack their differences: Amazon.com is a B2C marketplace that sells to consumers. Very often, products are bought 1 at a time. Alibaba.com is a B2B directory that serves as advertising to manufacturers and trading companies. I would guess the average order is in … [Read more...]
Chinese Factories Designing, Branding, and Selling on Amazon: Q&A
I wrote before about the challenges of Chinese factories to sell on Amazon. And yet, it seems to be an emerging trend. I asked Fredrik Gronkvist (from China Importal), who has also been observing the latest trends, for his opinion on this. Q: Ten years ago, Chinese factories ‘made to order’, and seeing one of them ‘make to stock’ was a rare occurrence. Have you seen more and more manufacturers 'make to stock’? What do they do with it? First, Chinese manufacturers still ‘make to order’ and I … [Read more...]
How To Cooperate With Your Chinese Supplier, Part 15: The 7 Major Risks You Run With Your China Manufacturers
I listed the 6 ways Chinese suppliers cheat importers a few years ago. But, with proper due diligence, the risk of being cheated outright goes down a lot. The major risks that experienced importers run, when working with a new manufacturer in China, are mostly related to issues of motivation and trust. To be sure, there are many good manufacturers in China, but you should be aware of the pitfalls and watch out for them. My partner Fabien and I made a list of 7 common issues we have … [Read more...]
Why Do Most Chinese Dislike Processes?
I have written many times that most Chinese people are not process thinkers. By this I mean they tend not to spend time thinking of HOW to do something: what steps should we follow, what resources do we need, what results should we expect, how to optimize our approach, what issues can come up, etc. I was discussing this recently with a friend (from mainland China) and he had an interesting perspective. There are three reasons behind this, in his mind. 1. They want to show they are … [Read more...]
Are there Many Fake ISO 9001 Certifications in China?
I saw several people mentioning fake certificates recently in the context of Chinese manufacturing. While I know there are many fake product certificates, I don't think there are many fake ISO 9001 certifications, or those for ISO 14001, or ISO/TS16949 for that matter. My point of view is simple. There are many registrars, and many “consultants” that “guarantee a pass” and that know which registrars are very lax. It means factories simply pay and get the certification. It is not much more … [Read more...]
3 Types of Factory Evaluations for Purchasing in China
More and more importers discover that they can appoint an auditing agency to evaluate factories before they issue an order. But not all these evaluation services are equally helpful. I distinguish between 3 broad types of factory evaluations. Each type is suitable for different needs on the importer's side. 1. Basic Factory Evaluation The purpose is to collect basic information about the manufacturer, such as: What is the address? What do the buildings look like? How big is it? What … [Read more...]
How to reduce costs in a factory? The lean approach.
The number one challenge of Chinese suppliers is price, as revealed by a recent survey. Their costs keep rising, but price competition is stronger and stronger. Factory owners spend a lot of time trying to reduce costs. Unfortunately, they tend to focus only on three levers to keep their costs under control: Negotiating down material prices; Limiting salary raises; Pushing the employees to work hard, for long hours. These are actually NOT the main drivers of cost though... … [Read more...]
24 questions to ask during a Chinese factory visit
If you spend time in a factory visit, don't just record the information given to you. Prepare your questions! Here's what you should be asking during a Chinese factory visit... … [Read more...]
Auditing a small Chinese factory: does it make sense?
I see some well-meaning importers who pay for factory audits based on a checklist inspired by the ISO9001 standard. However, I am really questioning the value of auditing a small factory (below 400-600 workers). Don't get me wrong, I am not suggesting that purchasers roll the dice. They should try to visit the factories before placing orders. It is always good to see what equipment the factory will use, and what kind of products they are manufacturing. My point is that a formal audit will … [Read more...]