5 Best Practices for Efficient Communication with Chinese Suppliers

Posted on 3 Comments

supplier communication

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 5 Best Practices for Efficient Communication with Chinese Suppliers

Supplier Visits in China: A How to Guide for Startups

Posted on 1 Comment

Supplier visit

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 Supplier Visits in China: A How to Guide for Startups

Supplier Scams in China: How to Get Your Money Back: By Kai Xue and Li Xianyun

Posted on 133 Comments

Supplier scams

Small businesses importing from Asia get scammed everyday. You’ve heard the stories, so that probably doesn’t come as news. Most people would assume that there is no recourse, if you are scammed by a fake supplier.

But, I know two Chinese lawyers that don’t agree.

This week, we publish a practical ‘how to guide’ for reporting scams directly to the Chinese authorities and getting your money back – co-authored by Mr Kai Xue and Mr Li Xianun – both lawyers working for DeHeng Law Offices in Beijing.

In this article, Kai and Li explains how you should deal with fraud situations, including how you should manage the scammers and how to file a police report (that will actually be accepted).

Kai Xue and Li Xianyun, please tell us a bit about your backgrounds and roles at DeHeng Law Offices

Kai Xue (Left photo) is a transactional lawyer advising mostly in cross-border finance and outbound mergers and
acquisitions. Li Xianyun (Right photo) is a litigation lawyer representing clients in general commercial arbitration or litigation, including disputes stemming from foreign trade.

Aside from our professional interest in being engaged in legal matters, we are enthusiastic about providing better public information on smoothly conducting business in China, and if necessary, catching bad guys. Continue reading Supplier Scams in China: How to Get Your Money Back: By Kai Xue and Li Xianyun

China Export Licenses and Permits: A Complete Guide

Posted on 41 Comments

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

Today, most suppliers in China hold export licenses. But, it was not always that way, and there are still factories that lack them.

In this article, we explain what Importers must know about Export licenses in China – and how you can buy from a suppliers without one.

What is an Export license?

An Export license, or Export permit, is a document issued to companies by China’s Ministry of Foreign Trade and Economic Cooperation.

The Export license is required for shipping goods out of China. Without such a license, the cargo will not be cleared through the Chinese customs.

As such, most export oriented suppliers, both manufacturers and trading companies, hold Export licenses.

Shall the Supplier or the Buyer apply for the Export license?

The Export licenses are only issued to Chinese companies, that wish to export goods from China to overseas markets.

Hence, overseas buyers don’t need to obtain license or permit in China. Continue reading China Export Licenses and Permits: A Complete Guide

Intellectual Property (IP) Protection When Importing from China

Posted on 2 Comments

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

Intellectual Property (IP) theft is a main concern for Startups and Small businesses importing from China, and other Asian countries.

We all know that manufacturers in the region have a reputation. However, what’s the real chance that your supplier will flood your market and make millions – using your IP?

In this article, we explain what every Startup and Small business must know about managing Intellectual Property risks when importing from Asia.

Keep reading, and learn more about how you can protect your IP and why most importers overestimate the risk of IP theft. You will also learn why the real risk might not be a supplier stealing your IP – but you (unknowingly) infringing on the IP of another company.

What is Intellectual Property?

Intellectual Property provides protection to the intangible creations of a person or company. This may, for example, include patents, trademarks or business secrets.

It also includes the article you’re now reading. I wrote it. Hence, I hold the copyright.

So, what are we referring to in the context of ‘importing products from Asia’?

Essentially, anything that is included in your product specification:

  • Product design drawings
  • Logos and brand names
  • Functional descriptions
  • Circuit drawings
  • Packaging design

Continue reading Intellectual Property (IP) Protection When Importing from China

Importing from China to the UK: A Complete Guide

Posted on 6 Comments

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

About to Import products from China to the United Kingdom? Eager to know how the ‘Brexit’ will affect your business?

Read this guide to learn what you must know about product regulations, labelling requirements, import duties and VAT in the United Kingdom.

We also explain why UK based importers should not worry too much about the country’s departure from the European Union. Well, at least in the mid to long term.

Important Note: As of now, this guide applies to importers in all EU member states. Thus, the UK is interchangeable with any other EU country. That is, of course, until we create an updated version of this country guide in 2018.

British Product Safety Regulation

As the United Kingdom is (still) part of the European Union, EU wide standards and directives are mandatory.

Below follows an overview: Continue reading Importing from China to the UK: A Complete Guide

Checking Buyer Reference When Buying from Chinese Suppliers

Posted on 2 Comments

Buyer Reference

Buyer references are taken for granted in many countries. I mean, how else do you know that you can trust a potential supplier. And after all, they should work to sell themselves to you, not the other way around. Well, that’s how things should be. However, there’s a gap between how things should be, and the reality of a Chinese supplier.

In this article, we explain why many Chinese suppliers aren’t overly keen on sharing information about their existing buyers, and why you are part of the problem. We also explain why testimonials aren’t that relevant to begin with, in the world of OEM manufacturing.

1. Suppliers fear their competitors might approach their customers

Transparency is, for many reasons, an alien concept to most Chinese manufacturers. My personal experience, when discussing this matter with factory managers in the country, is that most consider giving away customer references, or testimonials, as an invitation to their competitors to move in on them.

And, they are right. Considering how price sensitive many buyers are, suppliers do well to hide their customer base from competing manufacturers. Continue reading Checking Buyer Reference When Buying from Chinese Suppliers

Social Compliance Audits in China: By Renaud Anjoran

Posted on

production-facility

Renaud Anjoran, the founder of Sofeast in Shenzhen, is a well-known expert in quality assurance and factory audits. In this article, Renaud shares his insights in a topic that is more relevant than ever to importers: Social Compliance. Keep reading, and learn more about the various Social Compliance Audit protocols and the situation differ between major industries – including Textiles, Electronics and Toys. In addition, he also explains why so many suppliers fail Social Compliance Audits. While many business owners assume that the main issue, and risk, is underage labour, that is not the case.

Why are Social Compliance Audits (SCA) necessary when doing business with Chinese manufacturers?

There are several reasons why Western importers need their suppliers’ factories to be audited for social compliance.

First, consumer brands are under intense media scrutiny. Journalists generally don’t investigate in what conditions certain products are made, but from time to time they surface some information that causes a scandal. Think Nike and child labor, or Apple and the suicides at Foxconn. The key here is to know about potential scandals and push suppliers to act.

Continue reading Social Compliance Audits in China: By Renaud Anjoran

China Company Verification: How to Vet Suppliers in 4 Steps

Posted on 4 Comments

China Company Verification

All too often I hear Buyers making supplier selections on highly arbitrary factors, primarily the responsiveness the sales rep on the other side. Such factors are largely irrelevant. A supplier selection without the right data is often the root cause of quality issues further down the road. In this article, we explain how you can perform a China Company Verification by analyzing their documentation. This procedure can be managed from your office, and doesn’t require an on site visit.

Consider it a first step of the selection procedure, as there are limitations to what can be done from a distance – as compared to more comprehensive, and far more expensive, factory audits. The ideal outcome is identifying a number of potential candidates. In this article, we look into two sets of documentation, company related documents and product related documents, and the role of buyer references and US customs data. Continue reading China Company Verification: How to Vet Suppliers in 4 Steps

Production & Lead Time in Asia: A Complete Guide

Posted on

Production line in Asia

Lead times, when outsourcing production to Asia, involves much more than assembly, packing and shipment. Yet, many importers are far too optimistic about the time it actually takes to get from deposit payment to delivered produce.

In this blog post, we guide you through the four phases of production, quality assurance and delivery. We also explain how you by simple measures can reduce the risks for serious delays, and why you need to consider the risk of quality issues.

1. Tooling Production

Custom designed products, and components, often require additional tooling, such as injection molds. Prints, for example logos, may also require additional tooling, which by most manufacturers must be ordered from a subcontractor. Making, and adjusting, a new mold may take anything between 14 to 60 days, depending on its complexity. However, the tooling is usually good for more than one order, sometimes hundreds of thousands of units. In other words, this lead time can be deducted from all future orders. Continue reading Production & Lead Time in Asia: A Complete Guide