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As one of the most important world expert powerhouse, China is the target for many companies around the world, whether giant multinationals or small to medium companies, to source products.
I’d been working with many clients in the past ten years to help them source and coach them with a better approach in their China sourcing activities. There are many interesting stories and I am sure these always happen when two different cultures meet.
I’d like to share some tips and welcome your feedback.
Top Challenges of Sourcing from China
You will meet up with many challenges in your China sourcing activity from the first day you decided to do it.
- Difficulty in identifying the potential suppliers
You can either do it through web research, or you can come over to attend the trade fair directly.
However, you will find It’s painstaking for you to find the right potential supplier for you.
some times the available choices seems to be many, some times you could not even find one choice.
and most importantly, you need to verify whether the information you got is correct or not, and whether the supplier is a reputable one that you want.
- Difficulty in communication
The time zones are different, if you are in the States, you need to stay late up late at night or get up very early to talk to your potential suppliers, it is similar in other regions.
Some people from the suppliers do not speak perfect English, misunderstanding always happens.
Some suppliers may produce the products you want, however they had not sufficient experience with international companies.
- Culture differences and reliability
Sometimes, it’s very difficult for you to confirm who are the decision makers or owner of the suppliers. There might be many trading agents trying to work with you.
Some suppliers will over commit and can not meet with your standards finally.
Some can produce good samples but you will not get the same during the mass production.
You will also face many barriers in cultural & business aspects.
So, What to do?
You are choosing the right supplier, and They are choosing you as well.
Unlike the western world where people tend to protect them more dependent on laws and regulations, in China, trust and personal relations are more important.
Ways to Ensure Successful Sourcing in China
Build a dedicated team
- Find someone in your team who know Chinese business culture, esp. familiar with China sourcing practices, he will be the major interface to conduct sourcing activities.
- A reliable and capable choice of this role is the key step. There should be no hidden deals.
Choosing potential suppliers
- Search various sources to find potential suppliers.
- Collect information and compare samples and data.
- Communicate with the product requirements and assess the capability of the supplier.
- Sample check and short list the suppliers.
Onsite Check and Factory Audit
- China Factory Audit to verify the suppliers to avoid fake suppliers and build further trust.
This is so important a job worth your travel. and this will also make your suppliers happy and trust you more.
- Secure the agreed terms and negotiate terms of payment, delivery time, packaging, labeling.
- Specify manufacturer’s quality assurance commitments
Before payment, always confirm the account number first. I’d got complaints from clients that were told wrong emails had provided other bank accounts to them to request for money.
Production, Inspection and Shipment
- Conduct ongoing quality control (QC) for all product features, design, functions
- Follow up packaging, certification tags, labeling, user manual etc
- Conduct unexpected random checks
- Expediting and pre-shipment inspection
- Liaise shipment with shipping line or logistics provider
- Ensure correct product classification for customs purposes
Supplier Assessment and Periodic Audit
- This shall be a maintenance job to keep a healthy relationship with suppliers.
What do you think?
Readalong: Sinostep Sourcing from China Service
Cheng Chao has extensive expertise in China market entry, global translation & localization, cross-border business development, and global digital marketing.
Chao founded ChineseTrans, where he led a team of senior linguists to establish ChineseTrans as the market leader in professional Chinese translation services.
Since 2011, Chao has served as the managing director of SinoStep, a consulting agency helping foreign investment enter into the China market. Backed up with a strong team of China business consultants experienced in different sectors, Chao has successfully introduced dozens of overseas brands into the China market, established their operations in China on early stage and adapted their businesses to the China market.
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