Choose appropriate partners or collaborators is vital to success in any venture or business with China. It's like a marriage ... The selection of a new factory or company partner should not be based on reasons of little weight as the distance between the factory and the airport or a difference of one dollar at a price. Getting the right provider and most importantly, your support can make the smooth functioning and stability in the fueling business to the company to concentrate on increasing sales and market share ... Finding a reliable supplier ineffective or can cause large disruption to an organization. There is a limit to how a company can suffer delays in deliveries or quality problems facing few ... when you realize you are so involved in solving problems that do not you focus on your business long enough and your competition ends arrebatándote your market share.
Many buyers believe that China is like a supermarket ... I go and buy me serve. But the truth is that the market is your image and your business that is at stake. It is very important to see Chinese suppliers as part of the organization. As you can sell with confidence when you do not trust your suppliers? Choose
it means money and new opportunities ... wrong choice can mean losing customers, image, brand value, market share ... in short, everything can go to ruin through no fault of your own company.
Unfortunately many buyers today are focused on individual purchasing decisions, especially the more inexperienced to think that the most important, is as close as possible to the actual manufacturer to get the price more cheaply as possible. When it's really important is to ensure a consistent quality service and ... really the price should be somewhat secondary to want the best price in the world if you will not be able to serve!
Here are several points to consider when selecting our partners or collaborators in China: Legal Jurisdiction
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Legal jurisdiction is the first thing to consider, because we must be aware that China anything can go wrong ... for a large company that a transaction goes wrong you can make a financial loss and very isolated ... but for a small or medium can lead to closure or business bankruptcy.
From the moment we crossed the border should be aware that we enter into a legal world cloudy and you have to walk on eggshells! For this we will analyze the consequences of working directly with a factory in China or an office or broker in Hong Kong.
Hong Kong has a legal system based on British laws, for this reason if something happens there is a chance to go to a respected and impartial court. And depending on the circumstances there are many possibilities to recover a loss. By contrast the Chinese courts are dark, complicated and rarely get a fair result. Many new buyers do not consider such circumstances because they are too price-conscious buyers ... and experience often forgotten in these circumstances because they feel comfortable. As discussed earlier for a small error of this kind without adequate legal protection may be the last, while for a strong company can be a financial risk on time and it is true that sometimes these companies decide to take this risk.
Hong Kong has always been the door to doing business in China, but due to constant competition and the need to get better prices buyers are beginning to jump directly to China to get factory direct prices. This can be a validated strategy for many companies, but not all ... this decision should be based on risk and it is very important to analyze the possible consequences. Many small businesses try to take the plunge and after a couple of bad experiences and a great cost back to Hong Kong in search of borkers and offices with extensive experience and relationships in China are good fats, because the difference in price is much more manageable than the risk a bad trade.
Trading Companies and Offices of Purchase:
Many buyers are purchasing offices or a middleman traders and unnecessary cost, but the reality of an office in Hong Kong is much more than just a brokerage fee. Due to high competition and accessibility of China traders have specialized services have been incorporated to make them more attractive to buyers. Most traders have established strong ties and relationships with a large number of factories for years. These relations in an excellent position, stability and quality of service ... but most importantly, saving you time or cost to you to create such links with a new factory. Among the most common services are: Certification, Audit, Control and Monitoring of orders, logistics services ... The commission can range from 5% to 20% depending on the level of expertise or services offered.
decide to work with a trader must be based on a strategic analysis:
- Risk Analysis for your company if you work directly with China.
- Analysis of costs based on services provided by the trader.
- Analysis of familiarity and experience with respect to the product trader.
These tests vary depending on the activity of the company ... a company dedicated to marketing, sales and design you may find it necessary to work with a trader for lack of production experience. While other companies "as in our case" like to be involved directly in all parts of the business and prefer to do everything in-house directly.
The important thing is that the decision to work directly with a factory or through a trader must be the result of a strategic analysis based on the real needs of the company. Factories
Search: Find
factories in China is not difficult, the challenge is to find plants that provide confidence and more than a good price on your organization. Be very selective and take into account that is a long term investment ...
Internet:
This is a touchy subject ... there are many who think that through the Internet can find factories and through e-mail to business as if it were to buy a CD at amazon.com ... This is a big mistake! In China it is essential to establish linkages and personal relationships in order to have good cooperation and especially to get to know and actually see the potential of the plant and its people for the future of your business.
Internet is a good weapon to locate or to take a first look at a factory but once the time to take a step further, it is more than recommended establishing a visit. Not possible a visit, you can always rely on traders or known references to us a more realistic image of the company ... for a beautiful Web page can make it either. Never trust the internet! If it's a small purchase and I have not much future might not be necessary ... but this visit should be assessed on a per transaction or type of business.
Fairs:
fairs are another very useful starting point to locate factories or potential partners. The most famous fair in China is the Chinese Import and Export Commodities Fair (The Guangdong Fair or as everyone knows the Canton Fair) which takes place from April 15 to 30 t of 15-30 October. It is the largest fair with factories of all the provinces ... in October 2007 was celebrated the 101st edition with more than 14,000 exhibitors, an exhibition area of \u200b\u200bover 250,000 m2 and more than 200,000 visitors. This
kind of fairs are a great opportunity to locate potential suppliers, but China must always have one thing clear ... we must never assume that what you see is what we will receive! The danger for new buyers is that the euphoria of having access to so many things and many suppliers in one place makes buying in China look easy ... but never forget that at the fairs is both competent and professional providers as mediocre and without experience. So the real complication is to identify which of these is the one we are interested ... and it is not easy!
1. It really is a manufacturer? ... The most difficult part to find a factory is to recognize if is dealing directly with the factory, with a trader or a friend of the manufacturer. It is the eternal question, "But surely you are the manufacturer?" The answer is always yes!!
2. Really have the capacity and expertise to manufacture our products? ... The answer is always "no problem" ... probably have no idea, but in general in China it is important to get the business and then we'll worry about how.
3. Working with very demanding brands "example. Wal-mart "to give us an idea of \u200b\u200bits capacity? ... What you answer "Yes, we work with them" ... but is it true?
4. If we look at prices never grasp a reality show, because during the fairs offer factory prices to attract buyers and then the reality is very different. It is very typical to give you a price with a calculator in hand and if you look in amazement as changes automatically making calculations meaningless ... to see how we react.
5. Visitors should not be surprised if stands are uninformed, or exposed ... but nothing can really be an interesting plant!
Finally ... choose a manufacturer at a trade show requires experience and time to identify these things and be able to make objective decisions.
Good visit a fair formula for so long and so full is to make a quick poll pointing visit the booths that might be interesting and then come back and give them the time they deserve. In this way you avoid wasting time with companies when you know there 20mts beyond a better and more potential. It is also important to focus more on data from the company, its capacity and potential to focus on the products because they used to have a good product or appear to have then if you are not serious?
is also very important to know the location of the factory, its terms of sale and shipping port because if you focus all your shopping in HK and southern China and find a supplier for a product but this in Shanghai, it may not strategically interested in relocating.
If factories are really interesting next step would be to visit the factory to assure you always ask how to get data, location of the factory in English and Chinese ... and most importantly compute either the time required for the visit, China is not Europe where one day you can visit several factories that are in the same area ... in China access and find the factory are 30-40% of the time of the visit ... I always lose or rather you lose!
Visit the Factory:
This is the most important and where more is learned from a supplier potential. It is a great exercise in building a business relationship and helps us see for ourselves whether the plant has the capacity we require, the experience or know how, minimum quality standards and social requirements, and most importantly, not 're betting our money orders instead of paying their suppliers!
China has a strong culture of juice ... just have to look at the horse races in Hong Kong which has the highest per capita stakes in the world ... are higher on a day when all bets on horse races a year in USA or Europe. Or is Macau, the city considered the world's largest game beating to Las Vegas and Atlantic City. This mentality often makes spilling the same philosophy in business and we take particular attention to this. In broad terms, the Chinese have 3 business philosophies:
- "Low Risk" - the company responsible, efficient and ethical long term relationships built. Only accept request and projects directly related to their core business area and will recommend other factories that can help in other types of products or projects.
- "Medium Risk" - are companies that are open to new projects and opportunities, know they have the necessary organization and new things they can do to increase your business but require much involvement and training on our part.
- "High Risk" - are companies that accept or jump to any new project in order to get the order, without even understanding it or knowing if they can actually take place. And these are the security risks to bet our money to try to make it more ... or lose!
There are 8 main areas that we discuss during a visit to ensure we collect the information needed to make a business decision:
1. General standards of the factory and Ability: The first step is to identify what are their standards to ensure compliance with minimum safety conditions, social ... etc. A start would be to ask their certifications, ISO9000, ICTI social certification ... if it is satisfied that there is already won a big step because you save an amount of audit own and your customers. If you do not have any official certification of this type might have other Social approval as Disney, Wal-Mart, Nike ... These companies have their own rules and requirements are very similar and sometimes more demanding than the official. Once you know this is important to investigate in the same way to assess their capacity ... number of units produced per month, months of seasonality, average order size and see for yourselves their actual production. Be very observant to see for those who are producing, if known ... etc. Finally, it is important to try to analyze your financial health, either dealing directly with them or through outside financial companies that we can provide data.
2. Staff Experience and Professionalism: We need to spend time with the Staff and interested in their history, quality of studies and preparation of senior and middle managers. They like that we care about these things, it is best to start asking about their families. See how they interrelate, who brings more information, if direct translation of top manager and will involve, if you argue with each other before answering ... Who takes notes, if someone takes them! Then ask for the organization and how departments are divided.
3. Client Portfolio: For the Company serves clients today? This will give us a vision of their capacity, efficiency, reliability ... Da around the plant and store, look at the names of clients to see if known. Look at yourself, because if you ask them will say yes! Also eye the competition, often enters your home through one of your suppliers, because without you knowing about can be producing for others.
4. Strategic Relationship: Relationships in China are based long to see that you have in common at all levels, family, professional ... find companies with which you created or identified strong links and relationships. The typical Western culture "Customer is King" is not valid in China. If you have a good relationship and a lot in common may treat you differently, even if you are a small client. They are very deep and emotional and unless a case of extreme necessity rather work on a relationship and a common Goal!
5. Product Experience: Must see if the factory is not only capable to manufacture your product, but is an expert in this type of product. You have to see for yourself, they always say that you are able, but do not be blinded by their hospitality ... make sure this is true, we must see the actual production and demand before the visit that day have in production the products you need to see. After a long flight, 2 hours by boat, 1 hour by car, you say "No problem" is music to the ears, but NO TE FIES!
6. Procedures and Systems: It is important to know your organization know if they have a production schedule, if ordered, if they know where things are, this clean, a good system and organization of work is essential for smooth and efficient operation.
7. Quality Control: Quality Control in China has many faces, that a company is not certified does not mean that no organization has a good quality if you have any certification course is 10, but not always the most important. I ask them to explain their quality system under which working standards ... Acceptable Quality Level (AQL) as done?, Is well identified by manufactures quality staff, they clean specific areas for management, are areas well identified for defective products, make controls all processes from the same raw material receiving ...
8. Respect for Intellectual Property: This part is essential to ensure that no leaks your competition for your secrets or new developments. To analyze this issue is to work in a reverse way, try to find out to which they are willing to find out if you ask for something from your competition ... if you say no can say anything perfect, but incredible! Most often, they release everything they ask, at least 80% of the factories for lack of professionalism. Once you loose everything you want, you say that the issue is not serious, you have to get very serious about this ... and threaten to do business with them under these circumstances, it makes you reconsider, does not guarantee that they will not in the future, but at least they remain taxed as something you offended.
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