With the COVID 19 pandemic hitting more countries, and more people realizing how serious the situation is, it seems tens of thousands of people started looking for face masks and other personal protection products. And what I see is a lot of people sending money, receiving substandard products, or not receiving anything at all. I wrote this article as a warning about your risks. And also to improve your odds of getting what you want, if you are determined to pursue your project. … [Read more...]
How To Diversify Manufacturing Sources Out of China and Cut Risk
By now, companies that rely on China to supply some products or parts have generally grasped the current situation with the COVID-19 epidemic that is leading them to wonder if it's important to diversify manufacturing sources away from China alone: A large portion of the Chinese population is forced to stay home (up to 760 million, according to the NYT) In many areas, local authorities have taken the matter in their hands and nobody knows when they will change policy It means … [Read more...]
China Still Best For New & Complex Manufacturing Projects
Steve Dickinson wrote an article (Moving Manufacturing from China: Where you Gonna Run?) that got me thinking about complex manufacturing projects and China. He outlines the main reasons why China became "the factory of the world" so quickly (especially from 1992 to 2005), for small and large buyers alike. Other low-cost Asian countries are now trying to emulate these results and attract manufacturing, and they seem to focus on lower tax rates. Here are two recent articles I found on this … [Read more...]
How to Find a High-Quality Chinese Supplier? Not a Short Recipe…
A client asked us recently how to find a high-quality Chinese supplier to make their products. My partner Fabien responded, I liked his email, and I expanded on it in this article. … [Read more...]
Manufacturing Electronics in Taiwan: A China Alternative?
As the US-China trade war intensifies, many American importers are looking for alternatives. They often look at Vietnam, Thailand, Indonesia, India, Mexico, etc. But what about Taiwan? There is sometimes an opportunity to start sourcing products from there, especially in electronics. … [Read more...]
Why Your Ground Agent in China is NOT Helping Cut Costs
From time to time, I hear from a company that works with a ground agent in China, and they basically tell me two things: The agent did a relatively good job lining up suppliers, communicating requirements, and generally ironing out most issues. (That makes sense -- otherwise, the importer switches to another agent or to another approach.) After the initial burst, the agent feels entitled to a commission of X% and is resting on her laurels, not challenging factories, not looking for new … [Read more...]
OEM, ODM, Contract Manufacturers: Choose your China Supplier Wisely
By Fabien Gaussorgues Do you prefer to work with an OEM or an ODM? What are their pros and cons? And what is a CM? This is particularly important if, as the importer, you want to develop a product that is different from what is already on the market. The advice in this article is especially suitable for mechanical and/or electrical products. First of all, what do those acronyms mean? Here are simple definitions: Original Design Manufacturer: the supplier provides the design and … [Read more...]
Sourcing from China 101, Part 2: How to Identify Potential Chinese Suppliers?
Now I am assuming that you have decided to source in China by yourself, but how to identify potential Chinese suppliers who will do a great job? One key point I want to communicate is this: you need to follow a process. You CANNOT browse a website, send a few emails, respond, and see where it takes you. If you want a written checklist that you can adapt and follow, you will find an example here. It deals with sourcing, development, production, and transportation (but it is not applicable … [Read more...]
China Supplier Vetting Part 11: Wrapping It Up
This article is a wrap-up of the series of articles that we have published over the past few months, on the topic of the verification & qualification of Chinese suppliers. Here is the list of articles: Background Checks Questions to Ask Before a Visit Evaluating Engineering Capability On-site, subjective evaluations On-Site Factory Quality Audits On-Site Social Compliance Audits Factory Process & System Audit Factory Testing Facilities In-Depth Due … [Read more...]
China Supplier Vetting Part 10: Pricing, Negotiation, Contracts
This is the 10th part in our China supplier vetting series. We’ll cover requests for quotations, negotiations, and contracts. By now we covered pretty much all sorts of due diligence a paranoid importer might go through! And yet it’s not over. While I am no expert in this stage of the buying process, there are a few important considerations that I want to address. Organized RFQ (Request For Quotation) One thing you want to check is whether the supplier you end up working with is … [Read more...]