China has a dominant position around the globe in mass production, and for companies who partner with a Chinese supplier, there are many benefits. However, choosing a manufacturer or supplier overseas can be a daunting task. Choosing a partner is no small feat and should be carefully done. Your own business hinges on a steady supply of quality items, and finding suppliers in China means sorting out who will support your business goals and who will take advantage of you.
An Overview of Suppliers in China
China isn’t called the world’s market without reason. The nation is the largest manufacturing powerhouse in the world. China produces 50% of the global supply of industrial goods and crude steel, 50% of the world’s coal production, 60% of the world’s cement production, 50% of the global vehicle supply and holds 150% of the U.S. level of industrial patent applications. In addition to these resources, China also remains the largest global producer of robots, highways, machine tools, cellphones, computers, chemical fibers and more.
Whatever you provide to your consumers, you are sure to find a manufacturing or production company located in China. There are much lower material, labor and supply costs in the country, which makes it an attractive option for fulfilling your production needs. While there are many good options for a Chinese partnership, there are concerns of unethical business dealings, such as the theft of intellectual property or production counterfeits. These reasons require caution and research when choosing from the suppliers in China.
Finding Suppliers in China
The global market relies heavily on the Canton Fair for choosing suppliers and looking for new inventory options. This is the largest trade fair held in China and it occurs twice a year in Guangzhou. Over 180,000 buyers and 26,000 exhibitors take part in the event, and it is often hailed as the trade show for everything. When looking for the right Chinese supplier, this is the place to start. There are several small fairs held in China that bring a number of manufacturing, material suppliers, equipment dealers and other accessories under one roof.
If you don’t want to travel overseas, you can also visit the international sourcing area of the National Hardware Show held each year in Las Vegas or the International Manufacturing Technology Show. Attending a fair is a great way to speak directly to a representative from a supplier and see firsthand what products and options are available for your company. You build a network of contacts across a wide range of suppliers and get a better idea of how you can use suppliers in China to expand or grow your business.
For companies that are new to outsourcing, particularity overseas, there are sourcing agents who can help guide you through the process. Though you may find a company that offers exactly what you need, sourcing agents can help with the research needed to determine a quality supplier from a scam. The many tasks that go into working with a supplier include getting a quote from a potential supplier, arranging payment terms, evaluating the factory or production schedule, managing quality control inspects, determining transportation logistics and communicating your specific manufacturing requirements or other information. This can be overwhelming and external support is sometimes needed.
Determining What Kind of Suppliers in China You Need
Your needs determine whether you choose to work with a manufacturer or a trading company, as there are differences between the two. A factory typically delivers a specific kind of product or specializes in a manufacturing process in order to keep overhead and other costs low. This is the option you would need if you are looking for manufacturing or assembly services in China. You negotiate for exactly what you want built, the minimum order quantity, and any other specifications that deliver your final product.
If you are looking to source a range of products in mass quantities, you may need to work with a trading company. These companies appeal to global buyers and act as middlemen between the buyer and production factories. These resellers are OK if you are looking for retail options with clothes, toys, beauty products or cheap electronics. The middleman connection is still affordable, but not when you are looking to source products needing specific technical requirements and manufacturing.
The Benefits of Suppliers in China
For your strategic sourcing partnership to work, three key factors must be considered: stability, cost management and risk management. When these elements are in place, sourcing your goods from China is a win-win for both partners. Low-cost manufacturing is a cost advantage so long as your quest for the lowest rates doesn’t lead you to inferior-quality items and inconsistent delivery. Order quantity and frequency of production will impact costs, often bringing a lower price without sacrificing quality.
The Chinese culture prioritizes harmony in relationships, and this trickles over into business dealings or partnerships with a Chinese supplier. For their part, Chinese suppliers will be emotionally invested in the partnership and work hard to build trust and respect in the relationship. This firm commitment to relationships can often be seen in an obligation to ethics over contract elements. Establishing a level of trust between you and your Chinese supplier is crucial for risk management. You can only expect an honest conversation when you have demonstrated strong leadership and goodwill.
Stability requires working with an honest, reputable company. There are some bad apples in the choices of suppliers in China, and the unsuspecting purchasing agents or business owners can find themselves in a difficult position when the promises and advertisements made online are just smoke and mirrors. Stability in quality means working with a manufacturer that has the capacity, tooling and expertise to handle your entire project, from the initial design and construction to labeling, packaging and shipping.
Choosing the Best of the Suppliers in China
Rather than struggling to find the right supplier for your business, trust the expertise of China 2 West. We’ve helped thousands of companies with their outsourcing needs and have developed crucial partnerships across Asia. Let us navigate your company through the crucial decision-making processes of working with suppliers in China and improve your company’s bottom line. Contact us today.
Sources
https://www.sourcingallies.com/blog/guide-to-finding-a-manufacturer
https://www.forbes.com/sites/allbusiness/2014/01/06/sourcing-goods-and-suppliers-in-china-a-how-to-guide-for-small-businesses/?sh=4e50b776d34a
https://www.forbes.com/sites/greenbrandon/2016/12/12/how-to-find-chinese-manufacturers-if-you-dont-know-anyone-in-china/
https://www.tradegecko.com/blog/supply-chain-management/10-ways-to-find-suppliers-you-can-trust
https://www.hays.cn/en/theinsidestory/supply-chain
https://www.stlouisfed.org/publications/regional-economist/april-2016/chinas-rapid-rise-from-backward-agrarian-society-to-industrial-powerhouse-in-just-35-years
https://asialinkbusiness.com.au/china/conducting-business-in-china/developing-business-relationships-in-china?doNothing=1
