Visiting your Suppliers in China – Erik Steijner of Migyston Group explains why you should

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Migystone Group

Business in China is largely based on relationships. That being said, most people in the industry agree that it’s not the first step to take when sourcing new products and suppliers in China. Instead we decided to ask the two co-founders of Migyston Group,Erik and David Steijner, when paying a visit  actually makes sense.

Please tell us a bit about what you do and how you got started

Migyston Group AB is a Swedish start-up founded in 2012, by the twin brothers Erik and David Steijner (that’s us), and our Chinese partner Yang Zhao. We met Young while getting our MBA degrees from Karlstad Business School.

We saw the opportunities in establishing an international network for trading and outsourcing of both products and services. Later we shifted focus to municipal level partnerships between Sweden and China. This helped us gain a good network within the public sector.

Later on, we’ve expanded our trading and sourcing branch of the company. Meanwhile, we’ve established a company branch focused on export to China. Mainly food products and paper pulp. Our business is quite diversified!

Let’s say that I want to import custom designed LED lamps. How do I need to prepare myself before contacting Chinese suppliers?

Before you place an order, get all your questions answered by your supplier. Make a list of product specifications that clearly defines the dimensions, quality standard, material, weight, certification requirement, quantity and transportation requirements. This is the first step towards finding out whether a supplier is qualified or not. The communication is perhaps the hardest part of supplier sourcing in China.

On which factors do you determine whether a supplier is qualified to manufacture a certain product?

To begin with, we want to know if the company on the other end actually exists. Briefly, we begin with a supplier screening that verifies the supplier’s legal status, their product certification (if any) and their bank accounts. Frauds are indeed very common which makes the process more time consuming and risky. Make sure you check all the supplier documents!

Many importers find communication with Chinese suppliers to be very inefficient and time consuming. Assuming that I don’t speak Chinese or have a partner on the ground, how would you advise me to handle communication with a supplier?

Hire us then! We’ll handle it for you. However, there’s still email and QQ (Chinese chat program) if you want to get in touch with suppliers by yourself instead of hiring a sourcing company like ours. Migston Group is not like any other sourcing firm. We base a lot of our business on established relationships. This makes it a lot easier to obtain an accurate price quotation and get a confirmation of the product specifications.

Having an established supplier relationship may also allow price reductions. Be aware that the negotiations are very time consuming. You’ll be better off hiring a sourcing company if you can’t put in the hours.

Do you think it makes sense to fly to China and visit a supplier before an order is placed?

Definitely. We normally offer our clients to visit the supplier’s manufacturing facility prior to placing an order. It’s a key part of our sourcing service. Want some general advice? While you’re there – spend time with your supplier. Eat with them, get drunk with them. While you’re not expected to be an expert in Chinese culture, it doesn’t hurt to read a book or two about the subject on the plane.

While there are more critical elements of the supplier sourcing process than actually making a visit, we do recommend you make one unless your order is too small to justify the cost. However, make sure you visit more than one supplier if you plan to go there.

Why is it important to visit more than one supplier?

I’d say that about five to ten percent of the Chinese exporting oriented manufacturers are “qualified” to sell to Europe and the United States. This means that finding one is not that easy. While it’s possible to do quite a bit of due diligence prior to the visit, you’re still likely to be disappointed with at least half of those (suppliers) you visit. Besides, while you’re in China you might as well stay on for a few more days and get more out of your trip.

Let’s say that I plan to visit a few suppliers in China. How do I need to prepare myself?

Make sure you visit the supplier’s actual manufacturing facility, not only their sales office in Shanghai or Hong Kong. Make a plan for where and when to visit each supplier and hire a translator if you’re like us – not fluent in Mandarin Chinese! The supplier visit is also an excellent opportunity for checking documents and how they manage the quality assurance process.

Isn’t more efficient to attend a trade fair rather than making an individual business trip if I want to meet a large number of suppliers?

Yes, if you visit a trade fair such as the Canton fair or one of the permanent wholesale fairs in Yiwu, you’ll meet plenty of suppliers under the same roof. What you get is a “feeling” for the supplier and their products. But that’s about it. The Chinese are business savvy and very good at looking good on the surface. However, a good impression doesn’t equal a “good supplier”. While I’d say that Trade Fairs are better platforms for products sourcing than online directories such as Alibaba, they don’t replace the sourcing process itself. Nor are Trade Fairs substitutes for a proper factory visit.

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  • 2 Responses to “Visiting your Suppliers in China – Erik Steijner of Migyston Group explains why you should

    1. rits at 3:51 pm

      Hi
      I am planning to visit Canton Fair in April for having a look at the party supplies booths. Do you think its a good idea to visit Canton, since I need to buy small qty like 100 pcs per item. I was suggested to visit Yiwu for smaller quantities, so what do you suggest.
      2. PL can you send me the place where I can find vendors for party supplies. I am looking for factories rather than traders to get good quality and price advantage
      3. How do I find an agent in Yiwu?Since If I come to China, I would surely need an agent.
      4.When is the best time to visit Yiwu commodity wholesale market? Will April be a good time after the Canton Fair?

      Thanks and looking forward to hearing back

    2. Dave Bryant at 7:22 am

      It’s often impractical to visit a supplier when first starting a relationship with them, but if you view them as a long term supplier, then IMO it’s critical you visit them from time to time, especially if you’re a smaller business. If you’re a small business and never meet your supplier, it’ll be too easy for them to see you simply as a PO, rather than a person. If you’re making small orders you’re more likely to get cut off, if you complain your emails more likely to be ignored, etc. It’s harder for them to do that if you at least have a face to face relationship.

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