China is often referred to as the world’s factory. Despite the enormous difficulties COVID-19 has brought about, it continues to provide enormous cost savings in commodities compared to any other location in the world.
China has become much more widely known around the world, yet its level of global integration is not as high as its size might suggest. Although Western brands are always open to importing good and supplies from China, they publicly complain about the challenges in sourcing from this Asian powerhouse.
Additionally, COVID-19 has caused the Chinese border to be blocked from 2020 to 2021, making it more difficult for enterprises to visit China in order to form agreements with possible suppliers.
Although many Chinese businesspeople have established new internet and social media channels for communication, seeing the supplier in person is still a crucial step in the appraisal process.
China is the primary source for almost all international retailers, who benefit from relatively low costs (savings can range from 10% to 50%) on their purchases.
Although sourcing from China can be very profitable, still as a retailer, you must avoid a few common mistakes while sourcing from China.
The following is a list of a few common mistakes that many retailers often commit while procuring goods from China.
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Not having well-defined specifications
You must have a clear-cut specification along with a product sample (if possible) while discussing with any Chinese manufacturer.
If there is any missing clarity, Chinese suppliers can often make their own assumptions, which may put you into trouble when you receive the goods finally.
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Excessive focus on pricing
No doubt, the basic reason why people go for Chinese products is because of the low price. However, if you overemphasize pricing then your Chinese supplier will deliver it by compromising on quality parameters.
Pricing is important but should not be your sole criterion.
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Omitting a supplier checklist
Key points that you must include while picking your China sourcing companies are the following:
- Location of the Chinese manufacturing plant
- Company size and share capital
- Production output capacity
- Quality control procedures
None of these must be omitted while selecting your supplier.
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Believing that the manufacturer has understood your requirements
Due to language issues, there can always be a communication problem with Chinese suppliers. You must not fail to double-check together with your China sourcing companies whether both you and your suppliers are on the same page while discussing your requirements.
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Not ordering samples
Even if you are pressed for time, it is imperative to order samples. You can determine the quality of the final product depending on your criteria, delivery options, and turnaround time by physically inspecting the sample.
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Creating impracticable production and price targets
Every firm aspires to maintain high earnings and low operating costs. Trying to handle this at the provider’s expense will lead to conflict and could sour your partnership with the supplier.
Avoid over-pressuring prices, establishing arbitrary deadlines, and haggling excessively. Otherwise, you can lose important merchants or get low-quality goods.
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Not balancing details
You must strike the correct balance between giving suppliers too much information and not giving them enough. Establish the significance of smaller requirements, such as packaging, design, and barcode size, as well as broader production concept difficulties, at the onset.
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Not auditing the supplier
It will be a blunder if you choose your Chinese product supplier without paying a visit either by yourself or any of your trusted representatives and doing a proper audit of the company.
You must check all aspects of the company to ensure that the supplier can deliver the quality that you expect.
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Overlooking the communication barrier
You shouldn’t take it for granted that everyone will understand every message you give. Language differences could potentially affect how well you communicate with suppliers.
To make it easier for your supplier to understand, attempt to make your English sentences as simple as possible.
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Not paying care to package
Conduct a shipment assessment of your supplier to make certain that everything, even the packing, is appropriate for your requirements.
Before having any products shipped, ask providers how they handle packaging, what shipping technique they’ll employ, and how they safeguard fragile things to prevent harm to the products.
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Selecting the wrong payment options
When dealing with overseas vendors, payment issues might sometimes arise. Some payment methods might be somewhat contentious due to additional controls on overseas transactions and bank requirements.
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Forgetting insurance
Your products will travel very long distances to finally reach you and hence there is every chance that there may be certain damage during the transit.
Therefore, you must always make sure that they are dispatched with proper insurance coverage.
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Not clearing terms and conditions in writing
The majority of vendors will be dependable, competent, respectful, and produce excellent work. However, there can be times when certain procedures are missed or the results are not what was anticipated.
It is essential to put your agreement’s conditions in writing in a well-written contract.
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Relying only on the internet for various information about suppliers
These days many cases are coming up regarding internet fraud and hence, it is important to check every aspect of your China sourcing companies before finalising the deal rather than satisfying yourself with what is written on the website.
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Not checking the product quality prior to dispatch
When production is around 80% complete, a pre-shipment inspection is performed to verify the quantity and quality of the products. If there are any flaws or violations, then those can be revealed and the proper remedial actions can be executed.
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Not hiring any sourcing company
While selecting China sourcing companies, it is essential that you take the support of any sourcing company based in China, that can properly verify everything about your potential suppliers.
Conclusion
It can take several weeks to many months to negotiate with Chinese suppliers. Knowing what to expect can help you join a contract that will serve as a strong foundation for your start-up company and make appropriate decisions.
