Few Important Tips to Deal with Chinese Manufacturers
Many companies in the USA and European countries are interested to know how can they find any home-run products in China that they can import and then sell on Amazon.
However, the biggest question is how to find a good source from China so that they can have a sufficient profit margin and biggest of all how to deal with such Chinese companies.
When you are planning to import from any China factories online then basically you are looking at certain private labelling products. So, this means you are now taking an existing product, and then putting your logo brand on it, and possibly doing some value addition too.
Why should you source from China?
The reason is simple, the Chinese economy is now in a growth period, hence their manufacturing costs will be very low compared to anywhere in the world.
Therefore, now is a fantastic opportunity for you! If you source any of your merchandise from China directly, you can get extremely low prices/units and sell them around with your brand for a very high profit in your country.
Apple, for example, was making iPhones at a cost originally of $40USD in assembly plants while they were making in the USA. However, their production efficiency was too low and Apple lost lots of money.
So, Apple now partnered with China factories online as the infrastructure in China was what Apple wanted to make a profit. That helped them to produce that same iPhone at only USD 8.
Let us, therefore, share a few tips to know how should you deal with any good China factories online.
1. Communicate clearly
Whenever you consider China to identify your prospective Chinese manufacturer, then the first hurdle that comes is the language barrier. Most Chinese suppliers have very little skill to speak English properly. This can always lead to serious miscommunication at times.
There can always be certain confusion so far as specification, delivery time is concerned. This may often lead to a total breakdown in business relationships.
To avoid this problem, always try to communicate with them through email rather than calling or having a video conference. Because they have a very poor understanding of your accent and the same problem will also be with you to understand them.
Prefer to use as simple language as possible while writing the email and avoid any slang words.
Another great idea can be to hire a suitable trustworthy Chinese purchasing agent, who is very well conversant in both English as well as Chinese languages.
2. Get your pricing calculation right
To run a successful online business, you need a very attractive price while importing from China factories online. Therefore, when you will receive their first offer, you must negotiate the price.
However, before you consider your target price, you must consider all aspects of importing your products from China. Remember, you will not get the necessary product at the price that has been quoted by your Chinese supplier.
You have to further add the transportation and shipping costs, duty, taxes, and several other miscellaneous costs that may be often unforeseen too.
Therefore, before you negotiate with the Chinese supplier, you must do a thorough calculation of your landed cost to get your target price to maintain your profit margin.
3. Choose the right kind of supplier
Remember all the Chinese companies that you may come across may not be the actual manufacturers. There are plenty of traders, and brokers who may pose themselves as a manufacturer who works between you and the factory and earn a certain profit.
As a new importer, it is important to decide whether you want to deal directly with the manufacturer or any middleman. Both have their own pros and cons but you need to decide which option is most convenient for your business.
4. Understand the various impacts of Chinese holidays
Every country and culture may have its own set of festivals and holidays. In China, the Chinese New Year is a very important holiday that continues for more than 3 weeks, sometime from late January to late February.
During this period, all factories remain closed as people want to be with their family and visit them if they are living in different places. Chinese New Year can impact your supply chain adversely and may end up costing you several thousands of dollars because of delayed shipments.
It is not so easy to imagine a certain holiday that will shut down an entire country, but that is what happens in China. So, as an importer, you need to be proactive as everyone will try to rush to deliver orders just before the holiday shutdown.
During this period, manufacturing prices may also go up, as well as shipping charges.
Besides, this important holiday, there are a few other holidays too, that you must know and plan accordingly to avoid any losses.
5. Build a strong relationship
When selecting your Chinese suppliers, certainly you must have done enough research and inquiries to confirm their background, technical expertise, and reputation on the market.
While this is always the first step to follow, which is also highly important. Also, you must pay a visit to the supplier and see them in person to confirm all your findings.
By visiting a factory, you can get enough idea about your Chinese supplier and help you to understand how your product is going to be manufactured, and whether everything is followed as per your instructions.
This can also be a good opportunity to talk about any customization that you might have in your mind for the products.
Remember, Chinese business culture always places values your personal relationships and interaction. Sharing a meal with the suppliers can establish a good human connection and can help build trust. Any personal visit can also help you to get better prices or obtain a more favourable payment term.
Even with constantly changing dynamics, China still remains one of the biggest manufacturing destinations in the world. As a new importer, you will have plenty of choices to select your China factories online to import from that country.
Also, the well-established logistics available can ensure reliable shipping of all your products.