Good things sometimes take time. Sometimes, far longer than most importers first anticipate. Slow communication, misunderstandings and endless sample revisions can cost businesses hundreds of thousands of dollars in lost profits. That’s exactly what we address in this article. Keep reading, and learn what you can do to get your products delivered on schedule, without cutting corners.
1. Purchase ODM (Private Labelled) Products
Developing a new product from scratch can be far more time consuming. Chinese manufacturers may provide limited assistance, but they rely on you to provide them with the complete set of documentation and files required to produce tooling and prototypes, prior to mass production. New OEM designs must also be tested, and it’s often very hard to foresee design flaws and technical issues before a pre-production sample is made. Even the simplest apparel design may require several revisions before your specification is translated into a reference sample that is ready to hit the production lines.
The alternative spells ODM, or Original Design Manufacturing. Most Chinese manufacturers can offer catalogues with a wide range of ‘standard products’, that can be branded with the buyer’s logo. ODM products can also be modified to a various degree, including modifications to the material, colors and components. Another benefit is that buying an ODM product may also result in a lower MOQ, as compared to OEM products – and of course, lower tooling costs, if any at all.
2. Use your manufacturers standard materials and components
Coordinating deliveries of materials and components from subcontractors and the exporting manufacturer is not only complicated and time consuming, but often entirely unnecessary. Chinese export manufacturers purchase virtually all materials and components from subcontractors, offering a vast network of suppliers in various industries. These are relationships that may have been tried and tested for years. Things usually work better, and take less time, if you don’t force the supplier out of its ordinary procurement routines.
3. Prepare all technical specifications and files
As mentioned, it’s not the manufacturer’s job to design your product. They expect you to provide a ready made template, ready for mass production, or at least prototyping. In my experience, perhaps the biggest time killer is when buyers fail to provide comprehensive and accurate product specifications and files.
For example, providing a logo file in .jpeg format is not enough. Instead, buyers must provide files in the right format, complemented with other relevant data, such dimensions (even if already specified in the file), print position and colors. Nothing shall be left out, or you’ll leave the supplier trying to figure out what you want, something that more often than not turn out to be both time consuming and resulting in misunderstandings.
Prepare all necessary files and documents before you even begin engaging with the suppliers. Providing incomplete, vague or conflicting specifications and files is only going to cause delays, and further down the line, quality issues. Thus, before you start, make sure you have the following:
- Logo files (.ai or .png format)
- CAD files (For example .dxf)
- Technical specifications (.pdf format)
- Design Drawings (.pdf format)
4. Don’t select a manufacturer too early
Betting on the wrong supplier is another typical mistake mostly committed by inexperienced buyers. Things seem to be going well. The supplier quotes low prices, sometimes far lower than its competitors. Then the first round of samples arrives, turning out to be nothing like what you first expected. The supplier gets started with a 2nd, 3rd and maybe even 4th sample revision as weeks turn to month. Meanwhile, you are losing out the market share, getting more and more desperate.
The sales rep in China can sense this, as you keep telling them that you can longer wait. For natural reasons, the supplier seizes the opportunity and may deny further sample revisions, jack up the price another 40% and demand 100% deposit payment before they make another move.
At this point, you have two options: You either do what the supplier tells you to and pay up, hoping for the best, even though they didn’t even succeed in providing samples matching your quality requirements. The other alternative is to say no and back out, thus starting all over from scratch, setting you back another 6 months. Hope is the last thing that dies, and therefore many buyers do indeed hope that they’ll get it right this time, and just pay up. After all, they ‘have no choice’.
Most suppliers are neither ‘reliable’ nor technically capable. Selecting a supplier based on a low price, nice photos and an, at least initially, good attitude shown by the sales rep, just isn’t a good move. Work simultaneously with at least three to four suppliers, and drop those failing to provide satisfying product samples and that otherwise cause you trouble. Then you can simply move on, without interruption, with the other suppliers. Always maintain backup options.
5. Don’t stop checking your inbox
We, as service providers, and Chinese manufacturers don’t like to guess. We need your feedback from time to time, be it on an engraved logo, sample price or delivery address. If you let us wait for 2 weeks for confirmations on all these little things for which we need your input, then things just take more time. Check your inbox everyday, and whenever the supplier needs information from you, don’t let them wait.
What’s even more annoying for suppliers is buyers that simply drop out of the process for a month or six, all of a sudden turning up out of nowhere wondering ‘why nothing is moving forward’. Don’t be that kind of buyer. I know how it is running a business. Things come up all the time. When that happens to you, politely make your partners and suppliers in China aware that you have things to take care of and clarify when, or if, you’ll get back to them to resume the procedure.
Don’t set overly unrealistic deadlines
Sometimes, good things take time. Processes exist in all businesses, and the application of the procurement procedure is what truly makes a difference when import goods from overseas, especially from China. Setting an unrealistic deadline is not going to help. It may even be damaging, as few suppliers take such deadlines seriously.
I’ve dealt with situations where buyers have sold, and received money, for imaginary products based on bogus prices received from equally unscrupulous suppliers. That’s just not a good idea.
China is a developing country, both in terms of mindset and infrastructure. Don’t try to set extremely narrow deadlines or try to negotiate a two weeks production time. It’s not realistic. Developing new products, and doing it right, takes time. For ODM products, the process takes at least four to five months, and OEM products may take twice that time. Lead times for repeat orders tend to be only two to three months, but everything falls if you don’t get it right from the beginning.
Don’t try to cut corners
There are two ways to cut time. Either you apply a strategy, for example, as outlined in this article, or you cut corners by skipping critical parts of the procurement process. That’s exactly what many importers decide to do, trying to save a few days by cancelling a quality inspection or substance test. Indeed, you can go straight to Google or a supplier directory and transferring funds to any random supplier, thereby saving months of tedious work. But you might want to prepare the bankruptcy papers while you’re at it.
Summary of Time Saving Measures
|Phase||Time Saving Measures|
a. Prepare all product specifications
b. Prepare all CAD and graphic files
c. Confirm all applicable product safety standards and labelling requirements
|Sourcing / Product Development|
a. Purchase ODM products instead of OEM products
b. Select more than one supplier
c. Don’t delay sample payments
d. Respond quickly when your input is needed
a. Add a late delivery clause
b. Specify clear payment terms and freight terms
c. Don’t delay the initial deposit payment
a. Book the quality inspection and lab test (if required) at least 3 weeks before the cargo is completed
b. Don’t delay the final balance payment
a. Make sure you have obtained all necessary permits and documents before the cargo arrives (e.g. EORI number in the EU or a customs bond in the US).
b. Obtain all freight documents (e.g. Bill of Lading, Commercial Invoice and Packing List) at least one week prior to arrival.
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