If you’ve been thinking on starting a new business or expanding yours by manufacturing or acquiring products from overseas China would be most likely your best alternative.
Related: Manufacturing In China Can Give Your Business The Competitive Advantage
China has proven for the last 3 decades to be one of the best destinations when manufacturing overseas, in spite that the prices have risen recently, the cost-benefit of doing it in China still really high compared with other low cost destinations such as Cambodia, India or Sri Lanka just to mention a few, where the quality and the manufacturing techniques still not as advanced as in China.
But how do you source for the right manufacturer or supplier for your desired goods?
Here is the how:
1) Gather information about your needs
Identify and make a check list of what you need to find in your new manufacturing partner, gather a much information as you can about your product and manufacturing techniques needed for its manufacture. This can include, but should be not limited to:
- Size
- Shape
- Colors
- Raw Materials
- Manufacturing processes
- Production size
- Quality levels
- Packing and Packaging needed
- International Norms and regulations related to the product
- Distribution Channels (this includes import and export processes)
By studying and determining carefully your needs you can have a better judgment at the moment of the decision about which option is better and get an idea of their limitations and capabilities when speaking to them.
2) Get new leads on potential suppliers in China
Nowadays thanks to the internet we can access to a myriad of options, but we can also use different sources such as:
a) Trusted web directories, like Alibaba, Made in China or Global Sources, but be careful because, no matter that all the companies or majority of them are audited to appear on the page, some can be just a sales agent or intermediary and not a real factory,
b) In the case that a sales agent or an intermediary are suitable options for you, before submitting any PO (production order) need to understand that in many cases, these entities get a commission by sending new clients to the factories, so be aware of some intermediaries that will be pushy telling to to choose one option over the other,
c) Visit your nearest SME’s Development Centre, Chamber of Commerce, or Trade Related Government Ministry, these offices normally have a directory listing the companies that their affiliates use as source of goods,but be aware that you might need to affiliate to these chambers or associations to get the information,
c) Visit specialized Trade Shows, although the most senseful option would be visiting a trade in China, such as Canton Fair or the Commodities Fair in Yiwu, start with some local shows to get an idea about what Chinese manufacturers are offering and what are they capable of, take into account that the manufacturers that can afford some thousands of dollars travelling overseas for a few days show are likely to be potential leads as they are big enough to include this in their sales scope,
d) Recommendations from other business contacts with experience overseas or networking groups,
3) Narrow your options,
Once you’ve done enough research and have found a few potential partners, filter them and get a list of 3-5 options, and establish deeper contact with them, for narrowing your list look into several aspects such as:
- Factories that already manufacture products like yours, this will ensure that your project wont represent a new experience for them and therefore a potential pitfall,
- Revise the ratings and comments about the manufacturer, nowadays the internet allow us to do this easily, and this can give us an idea of what to expect if working with them, web directories like Alibaba or Global Sources keep a section for comments and feedback from previous clients, so its worth to take a look to it,
- Check that they already export to your destination country or to one with similar import requirements, this to ensure the same quality you’re expecting and that they will be able to comply with all the international standards required,
- Reputability and honesty, trustworthy factories will show or provide easily information about their business, if they don’t, this should turn on a red light,
Read more:
Pros and Cons of Manufacturing in China
Manufacturing in China: Can we compare the Elephant with the Dragon?
Re branding the “Made in China”