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Quality Control and Inspections in China: A Complete Guide

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Once your products are paid for in full and shipped, you’re beyond the point of no return. If you were to find quality issues once the goods arrive in your country, it’s game over.

Forget about getting a refund or returning goods to your supplier.

Instead, you need to be sure that your products are matching all technical specifications and quality requirements before you pay the balance.

In this article, I answer the most common questions about the practical aspects of ordering a quality inspections in China.

Keep reading, and learn how much you should pay for an inspection, how to book one online – and why you should not let your supplier do the inspection by themselves.

Why do I need quality inspections when importing from China?

Manufacturing is not an exact science. The question is not if, but how severe the quality issues are.

I have inspected hundreds of orders in person, and this is what I often found:

  • Scratches
  • Dirt
  • Marks
  • Minor cosmetic issues

This is even to be expected. However, there are also more severe quality issues:

  • Loose parts
  • Incorrect labels
  • Incorrect design
  • Incorrect colors
  • Damages

Quality issues are, in a way, as certain as death and taxes. This is not unique to China, but the case when manufacturing in any country.

However, what is unique to China, and most other countries in Asia, is that you cannot return goods if you find quality issues in your own country.

For this reason, quality inspections are a crucial step of the process. You simply cannot skip this part of the process. Continue Reading →

Top 7 Sourcing Companies and Agents in China

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A Sourcing Company can be an invaluable partner when importing products from China. Or, they can be a useless middleman that offers nothing but delays and higher unit prices.

This is not a regulated industry, so anyone can claim qualifications to manage product and supplier sourcing.

In this article, you will learn what a sourcing company can do for you – and how much you should expect to pay them.

In addition, we also list some of the leading sourcing companies in Mainland China and Hong Kong S.A.R.

Why should I work with a Sourcing Company?

The core function of a sourcing company is to identify qualified suppliers, based on the customer’s needs and technical requirements.

There are no industry standards for how the supplier sourcing process is managed. Some Sourcing Companies have a more relationship based approach, funneling customers to their existing supplier network.

This can be a win win for both you and the sourcing companies , assuming they select suppliers based on the product’s technical specifications – rather than the size of the kickbacks they receive.

I’d say that most sourcing companies put kickbacks before selecting the supplier that is the most qualified to make a certain product.

Most sourcing companies can do a lot more than just, well, sourcing products.

For example, some can help you with factory audits, quality inspections, contracts, quality assurance and day to day administration.

As said, there are no set industry standards, so you need to discuss this with your Sourcing Company.

How do sourcing companies charge for their services?

Previously, most sourcing companies charged a commission based on the order value. However, in recent years, more and more sourcing companies have adopted fixed pricing.

Thus, they charge based on a per project or service basis, rather than a commission.

Of course, the final cost depends on what exactly you want the sourcing company to do for you. Continue Reading →

List of Quality Control and Inspection Companies in China

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Quality control is a mandatory part of the process when importing products from China, regardless of the order volume. Hence, finding the right quality control partner is crucial.

In this guide, you will find some of the leading quality inspection companies, with offices based in China.

We compare them based on capability, pricing and customer focus – to help you choose the right partner for your quality assurance needs in China.

Sofeast (Qualityinspection.org)

Sofeast is a Shenzhen based project management and quality assurance company that offers a wide range of QA services to importers, buying from suppliers in China.

The range of their services includes in-depth factory auditing, quality consulting, and assessment of technical documents.

In addition, the company also provides project management software specifically designed for importers – which makes Sofeast rather unique.

The company is founded in 2006 by Renaud Anjoran, from France, and is well known from his blog – qualityinspection.org.

Sofeast is a full service quality agency, helping all types of business. We have worked with Renaud’s team for several years, with fantastic results. Inspections start from $299, which is slightly lower than many of Sofeast’s competitors.

Our Starter Package customers can request a free quotation from Sofeast, directly via the Dashboard.

Continue Reading →

Price Negotiation with Chinese Suppliers: A Complete Guide

Suggestion: Watch the 10 minutes video tutorial before reading this article

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Price negotiation is on every importers mind when engaging with suppliers on Alibaba or Globalsources. Yet, it’s misunderstood as the practice of forcing the supplier to squeeze their margins to right above the production cost.

Going to hard on the price negotiation can result in terrible quality issues, and unanswered calls.

In my opinion, successful price negotiation is about finding the right equilibrium, where you pay the right price for the right quality, while the supplier can make enough money to stay in business and pay their shareholders and employees.

That’s not asking for too much.

Keep reading, and learn why you should not haggle your way down to poor quality, how you can prevent your supplier from jacking up the prices – and why you must be ready to stand up and walk away if they try do so.

This is the complete guide to price negotiation with Chinese factories.

1. Accept that the supplier must also make a worthwhile profit

Rather few importers are aware of the (very) low profit margins that most Chinese suppliers struggle with. It’s simply not possible for them to offer a 10 to 20% price reduction, unless the price was way off to begin with.

Asking them to lower the price more than 3 to 5% is the same as asking the supplier not lose money on your order.

Yet, many importers are obsessed with price haggling.

If you’re lucky, the supplier will simply tell you to go somewhere else.

If you are not as lucky, they may actually give in and lower themselves to your (unrealistic) target price – but with a nasty twist.

You see, a product can be made using various different quality standards, materials and components.

For example, a zinc alloy watch can be made for less than 5 dollars, while the same design made in 316L stainless steel can cost four times as much – around 20 dollars.

In such a scenario, you have successfully priced yourself out of a good offer, only to pay a premium for a low quality product. Not to mention the number of defective units.

You will also get less attention from the supplier, as they will focus on customers that they can make a worthwhile profit from.

All of this makes sense. Yet, in the west of come from the viewpoint that a ‘deal is a deal’ and that it’s up to the supplier to ‘produce high quality products on time’ regardless of whether or we price them down below the production cost.

Because you have more orders in the future.. And the supplier should for that reason ‘invest’ in you. Because your product is special, and so on.

But the mindset in Asia is different. Don’t forget that they have salaries to pay too, and it’s not like they are swimming in cash to begin with.

Customers that pay slightly better get much better quality, lower defect rates and better treatment. Not always, but often.

Go ahead and try to shave off a few percentage, but don’t become obsessed. In the end of the day, what will a 10% or even 20% reduction on the factory price even do for your business?

Perhaps you should be more focused on cutting costs elsewhere if that is so important.

price negotiation in China
2. Be clear about your quality requirements before you start negotiating

A product can, as I mentioned, be made using different materials and components. You need to have a ‘fixed’ product specification, and understanding for what makes or breaks the quality of your product.

Otherwise, you can’t say if a price is good, or bad.

18 dollars is a decent price for a stainless steel watch.

11 dollars is a terrible price for a zinc alloy watch.

If you don’t understand the specifications and customization options for your product, you cannot successfully engage in a price negotiation.

3. Price negotiations must be done at the right time

You can’t start negotiating after a supplier has made the tooling and prototypes for you. At this stage, they already know that they got you.

They already know that you will place an order.

Hence, they have no incentive to reduce the price.

What else will you do at this stage? You have spent months, and possibly hundreds of dollars, on samples and molds.

Will you just dump the supplier and spend six months developing new samples elsewhere, for the sake of shaving off a few dollars on the unit price?

No, you won’t, and they know that.

Negotiate the price before you make any commitments to the supplier, not when you are stuck.

4. Walk away if they  try something funny

Now, let’s look at it from the opposite side.

What if the supplier decide the raise the price, just when you are about to place the order?

This happens, and the suppliers tend to have all sorts of reasons. Labor costs went up. Taxes went up. Material costs go up. It’s their ‘most busy season’.

It doesn’t matter. They got you, or at least they think they do.

If a supplier try to rip you off at this stage, you must be ready to walk away.

Yes, even if that means you have to start over from scratch. Or well, at least go back to the product sampling process.

If you let the supplier bully you even before you have placed an order, you are safe to assume that they will continue such behavior afterwards.

5. Stay up to date on raw material costs

You don’t want to make an impression that you are gullible.

When you engage a supplier, you should mention that you have read up on current commodity and raw material prices.

This will weaken the case for the supplier to offer a higher price, or raise the price between orders.

You can, for example, use the following two sources:

Chinese suppliers also cite increasing labor costs and taxes, when providing a context for a price increase.

However, labor costs increases have panned out in recent years, and the Chinese government has been quite diligent in lowering taxes for small to medium sized businesses too.

Ready to import and launch your own product?

We know how hard it can be to go from an idea, to a mass produced and profitable product. The Starter Package is the only all-in-one solution that includes everything you need to get through every step of the process:

a. Private Label & OEM Product Manufacturer Lists

b. Product Specification Templates

c. Product Label Samples

d. Compliance Document Samples

e. Tutorials, Video Walkthroughs and Task Lists that guide you step-by-step through the entire process

In addition, you can also book quality inspections, lab testing and shipping directly from the platform. Click here to learn more.

How to Pay China Factories By PayPal: 5 Things You Must Know

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Sending money through telegraphic transfer (T/T), or paying by letter of credit (L/C), is slow and relatively complicated.

The wrong beneficiary name, or even address, can delay the payment for weeks, and there is no effective way to request a refund in case you get scammed by a supplier.

So, why aren’t more importers using payment services such as PayPal, that can send money instantly to suppliers – while also offering the chance of getting the money back if the products are not matching the specifications?

Keep reading, and learn why many suppliers refuse to accept PayPal payments, and what you can do to change their mind.

1. Most suppliers only accept PayPal payments when ordering product samples

PayPal is available to both businesses and individuals in both Mainland China and Hong Kong. Opening an account only takes minutes, and is as easy as anywhere else on the planet.

Yet, many Chinese suppliers, both factories and trading companies, don’t accept payments via PayPal.

Why is that?

First, it’s a matter of old habits.

Most suppliers are accustomed to the established payment methods, such as telegraphic transfer and letter of credit – while they are quick to dismiss newer payment methods.

The suppliers that do accept PayPal payments tend to restrict it to sample invoice payments only. As such, most suppliers don’t accept PayPal payments for larger orders. Continue Reading →

Import duties from China: How much should I pay?

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Not sure how to calculate import duties on your incoming shipment from China? Read this article, to learn how you can make an accurate customs duty estimation, find the right customs value for your country and HS code for your product.

You will also learn how, and when, to declare import duties to your local customs authorities – and why it’s a really bad idea to undervalue your goods for the sake of paying a lower duty rate.

How do I calculate the import duties?

Two factors that decide the amount of import duty you must pay are the following

a. Import duty rate (%)
b. Customs value

The import duty rate depends on the product and its assigned HS code. The customs value, on the other hand, depends on the target market.

Below follows an overview:

Country / Market Customs Value Comment
United States FOB Only the product cost is included
European Union CIF Includes product and freight cost
United Kingdom (EU) CIF Includes product and freight cost
Canada FOB Only the product cost is included
Australia FOB Only the product cost is included
New Zealand FOB Only the product cost is included
Singapore CIF Includes product and freight cost
Hong Kong S.A.R (PRC) None No import duties

In many markets, the customs value also includes the cost of samples, tooling and any services provided by the foreign supplier.

However, the customs value never include services generated domestically, such as forwarding from the port of loading to your address.

Note: Read this article about Incoterms to learn more about FOB (Free on Board) and CIF (Cost Freight Insurance)

Continue Reading →

What’s the Difference Between OEM and ODM Products?

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On Alibaba.com and other directories, suppliers claim to offer ‘OEM service’ and ‘ODM products’. In this article, we explain what OEM and ODM really means, and the difference between them.

Keep reading, and learn how product development and IP protection procedures differ, based on whether you go OEM, or select an ODM product.

The Definition of Original Equipment Manufacturing (OEM)

An OEM product is made according to the buyer’s product specification. For example, any product with a customized design, material, dimensions, functions or even colors can be classified as OEM.

To some, OEM means a product that is designed entirely based on the buyer specification, while others classify even the slightest modification of an existing ODM product design, as OEM.

That said, most would agree that the primary definition of an OEM product, is a product for which tooling (i.e., injection molds) must be produced before production can start. Continue Reading →

How to Get a Prototype or Sample Made in China: By Kevin Lee

Kevin Lee Asiaconn

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Importers order product samples to both test their new design, and the suppliers production capabilities. It’s also a way for the supplier to learn how to make the product, and create molds and other necessary tools.

The prototyping and sample order process can take months, and sometimes suppliers just give up – even without telling the customer. In this article, Kevin Lee of Asianconn, shares his best advise to Startups and SMEs looking to get their prototype or product sample manufactured in China.

Kevin, please tell us a bit about your background, and current business

In early 2000, China became what many call “World Factory”. She had reliable and cheap labor pool, friendly business ecosystem and low production cost. However, that “potential” came with certain issues that make the business full of risks.

Compared to big companies, many middle and small business didn’t have the ability to implement international purchasing strategy. On the other hand, excellent local suppliers totally didn’t know how to deal with customers abroad.

In 2009, I finished my work in Hong Kong and built this business with my friend Vincent to connect reliable Chinese suppliers to Western purchasers and help them hold the entire trade process to avoid various kinds of risks.
Continue Reading →

5 Best Practices for Efficient Communication with Chinese Suppliers

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Why does everything have to be so hard when dealing with Chinese suppliers? You send emails, and barely even get a reply.

You put together the best mood board ever, communicating the ‘feeling’ you want for your spring collection – and your supplier don’t even bother to comment on it.

The communication between overseas buyers, especially those in the West, and Chinese suppliers, is at best dysfunctional. Most often, it’s a complete disaster, that results in severe quality issues and huge losses for both sides.

In this article, I share my 5 best tips for effectively communicating with your supplier, so that you can avoid misunderstandings and delays.

1. Be overly clear and concise in your communication

In manufacturing, one must think, and communicate, as an engineer. However, Alibaba.com and Globalsources.com have essentially opened up contract manufacturing to every Entrepreneur on the planet.

As a result, many business owners without manufacturing or product development background venture into a field they have no experience in.

I see this all the time, with vague and open ended product specifications. Or worse, ‘inspirational documents’ that will ‘communicate a vision’ to the supplier.

Manufacturers don’t want or need your ‘vision’ or ‘inspiration’. They assemble your product for a quick profit and that’s it.

They want spec sheets, design drawings, label files and bill of materials. That’s the universal language of manufacturing.

In addition, most Chinese engineers and sales reps are far from fluent English speakers.

Thus, keep your communication as clear and concise as possible. Use bullet points and short, standardized documents. Continue Reading →

Supplier Visits in China: A How to Guide for Startups

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About to visit a new supplier in China? In this article, Renaud Anjoran of Sofeast Ltd and CMC Consultants in Shenzhen, explains what every importer must know about factory visits.

Keep reading, and learn the following:

a. The top reasons why supplier visits are important

b. The ‘right time’ to visit your supplier

c. How to plan your trip to China

d. What to look for in the factory, and what questions to ask Continue Reading →