According to credible reports, the manufacturing industry in China is responsible for nearly 28% of the total global output. This is impressive considering their closest rival comes at a distant second at 16%. The bigger question is, how do you leverage your business to benefit from the situation?
Yes, you got it right. You should partner up with a China manufacturing company. Most of these companies enjoy a competitive advantage that enables them to produce goods cheaply.
Working with the right China manufacturing companies may be a boon for your business. But first, you must cultivate a healthy relationship with them. Here’s how you can do that.
Selecting the Right Supplier for Your Business
A quick search of China manufacturers online yields thousands of results that appear authentic. Some of these companies are real factories producing the goods you’re interested in. However, significant others are intermediaries or trading companies.
Both parties are in a position to provide the goods that you want. But each has a set of pros and cons that you must first analyze. Trading companies tend to have a team that’s proficient in English.
Communicating your needs to them will not be as tricky as speaking with a manufacturer whose English isn’t good. Furthermore, trading companies are willing to meet low minimum order quantities that factories would otherwise object to.
Working with a trading company suits businesses still new to importing from China. Note that you’ll be receiving the goods at a slightly higher price from trading companies to compensate for their services.
Some people prefer to have a direct relationship with a China manufacturer. To actualize this, you must ask all your contacts whether they’re trading companies or manufacturers. Of course, some of them will lie about their identities.
Ask technical questions about your products to gauge whether a contact is a trading company or a China manufacturer. The former will have trouble answering these questions because most focus on marketing the products.
You could also ask for the company papers so that you get to know all the parties profiting off any arrangements.
Importing from a factory/manufacturer saves costs since the goods are cheaper. In addition, you can ask for customizations for your product before a factory makes them.
Communicating With a China Manufacturing Company
The language barrier is one of the biggest obstacles you’ll face when dealing with manufacturers. The problem is most of them are not good at speaking English. Failing to communicate well with them could lead to issues like wrong or delays in orders.
Try to communicate in straightforward language when dealing with a manufacturer. Don’t bombard them with too many questions at a go. A supplier is in a better position to provide detailed responses when the questions are few.
Never assume that a manufacturer has understood an email communication as you might have expected them to. Instead, schedule voice or video calls with their representatives to get a feel of whether you’re on the same page. Personal interaction is valuable in Chinese culture; take advantage of it.
Also, WeChat is the most popular social messaging platform in China, unlike most parts of the world where WhatsApp dominates. Most manufacturers use WeChat for their business communication. You’ll find this platform more helpful than emails in communicating with suppliers.
It would be prudent to hire a trustworthy translator if you find a manufacturer unable to understand English. Make sure that you’re the one hiring this translator, preferably from your country. This minimizes the chances of collusion between a translator and a manufacturer to rip you off.
Negotiating Prices
You must pay attention to the pricing of products if you want to make a killing from the China manufacturing arrangement. The rule of thumb is that the first quotation you receive is negotiable. Strive to ask for discounts from the supplier once you get the quote.
In negotiating for fair pricing, don’t push the supplier to the corner with demands for steep discounts. The supplier may agree to your wishes, but they may compromise the product’s quality to meet your budget. Dealing with inferior products is detrimental to your client-retention efforts.
Remember that your manufacturer has other clients who may be offering better prices. A manufacturer may push your order to the backline if your pricing isn’t as compelling as the others. The net effect of such an action is unsustainable lead times for your business.
Research the market price for the products you want before entering a negotiation. You can do this by asking for quotes for the same product from different manufacturers. Once you have the baseline price, negotiate based on the quality and quantity you expect from the manufacturer.
Respect and Understand the Importance of Chinese Holidays
Can you imagine a holiday that grounds the operations of all the factories in the United States for close to two weeks? In China, one such national vacation starts in either late January or sometime in February. Factory workers leave the city for other parts of the country to celebrate with their loved ones during the two-week holiday.
You must account for this period to avoid losing a considerable chunk of your investment to shipment delays. Manufacturers tend to hike their prices during the Chinese New Year. Shipping companies also take advantage of the celebrations to increase their charges.
Take time to find out from your supplier the various holidays they have in a calendar year. Show some interest in knowing the significance of these holidays. It’s an excellent way to build rapport with your partners in addition to obtaining information for planning purposes.
Navigate the Industry With C2W
The vibrant manufacturing industry is a source of various affordable products that you should take advantage of. Making these products in your home country may not be as cheap as in China. Sourcing them from China and reselling them at a mark-up will do justice to your bottom line.
C2W is a China manufacturing company with simple but quality solutions to meet every business’s needs. Partner with us today as you begin navigating through China’s manufacturing space.
