China 2 West’s founder, Nick Cunningham, gave an interview to Home Talk USA about his business, product sourcing from China and challenges businesses are facing in China. Read the full interview here:
How did you end up starting a company in China?
That’s a good question. I was in the Marines for 9 years, travelling around the world and when I retired in 2003, I was looking for something to keep up the excitement of being in the Marines, without being shot at. So China was an obvious choice with all the business going on there and its growth. I just went there to look for opportunities and this really took a one-way flight and I ended up staying there for 10 years.
What is product sourcing?
Product sourcing is the search for components, for off-the-shelf products or even factories that can do research and development to create costumed products. If people from the US are interested in selling products on Amazon or Ebay they can come to China 2 West and ask us to find a good supplier, which can be hard to find in China. So we find the right supplier for costumers that can make the product that the costumers want.
How did you get involved with product sourcing?
What happened was that everybody I knew, and I wasn’t doing business back then, was asking me to go and find a product that they wanted to sell on Ebay. It just occurred to me that if friends asking me to go and look at factories and find products, that there must be business in it. So I taught myself at it and built a very bad website that was set by a sourcing guy in China. It just let me down that path into product sourcing.
How can sellers discover new products?
There’s a number of ways that China 2 West is finding new products and new suppliers. You can go online on a website called Alibaba, sourcing websites or madeinchina.com. The problem with those websites is that the factory can look legitimate on paper when you look at their profile and pictures but that’s often not how they look when you visit them. You don’t know what their financial structure is and you don’t know what their quality systems are so there’s an issue with that. You can make some initial research using those websites but then you have to physically visit them or have experts auditing the factories. Another way is to go to tradeshows and do good research. We use Baidu, which is China’s equivalent to Google since Google’s banned in China, so if you can speak and write Chinese you can do that.
You said tradeshows are a good source, tell us more about that…
Most of the tradeshows in the US have an international sourcing section where you can find suppliers from China, Taiwan and other parts of Asia. So you don’t need to go to China at all. Another tip is to look at the Hong Kong shows which tend to be very good. They have some great quality Chinese suppliers at those shows. Hong Kong is also a nice place to visit for people interested in going out to Asia. It’s great to enjoy your time, as it’s a bit more westernized and also they have really good factories.
How many factories can one visit in a day?
We often hear from costumers that they’ve lined up five factories in a day. Realities are that, let’s take Dongguan, Shenzhen or Guangzhou, it can take two hours to get from one factory to the other in the same city, which is rather common than rare. Once you finally found the factory, you then get the, what we call it dog and pony show, which means that the factory really wants you to have a good time. In China Guangxi, the term for relationships, is really important. Chinese businesses really want to develop that friendship with you and will therefore take you for a long lunch, a few drinks and that kind of things. So a realistic number of factory visits is maximum two per day and only if the factories are in the same city.
Listen to the full interview below, the interview starts about the 20.30 minute