[Floor Talk 1] Your China Sourcing Strategy

Posted on 09 April, 2014


Author: Peter Lou, VP Operations, UT Metal





Go on Your Own,or Use a Sourcing Agent?


 



If you are starting to buy from China, your first choice would be: should I manage this by myself?


You may already buy using the agents' services for now. To you who fall into this category, you know who the agents are and please keep on going.



If your team can't spend few hours a day for each factory to follow what happens in China, you might need help from a sourcing agency that handles some of the important things like:



  • Choosing new suppliers that can make your products at the right price and quality levels;
  • Helping develop new products models with these suppliers;
  • On site management of the supplier relationships (communication, quality control, shipments coordination,crises handling if any).



Here are our customer types.



China manufacturing,Retail Store Fixture China Suppliers


Here at our factory, approx. 31% of the business comes through the sourcing agency.




For you, probably there are 4 choices to consider:



Importers from China for the Store fixtures and metal furnitures



1. Go direct purchasing



Most of the customers would choose to do in this, approx. 50~80%. 


In this way, the whole process is under your control, yet you do not spend commissions to any middleman or agent.


If your team is well organized enough to manage Chinese suppliers, or if you are working with well established Chinese suppliers, then this is probably the best way to go.



2. Engage a commissioned agent



Hundreds and thousands of individuals in China are trying to make a living by providing this service. There are more in HongKong to do this.



If you are lucky to work with a right people to do this,you can save a lot of time. They are acting as your on site representative to sense and kill the potential problems.


Or, correct the problems when it's still not too late.


Unfortunately, over 50% of these people get a hidden commission from the factory. This is normal practice in China as some of the Chinese suppliers believes "money solves things or builds relationship".


As a result, they would defend the factory when things go wrong.




3. Buy via a distributor



This is a good option if you cannot meet the MOQs (we will cover in the next e-mails why there are MOQs and what customers are beyond this limitation).


A trading company or a distributor places orders in a smaller factory that does not such demand the high volumes.


Some of the disadvantages are that this is a long communication process as well when it comes to the problems solving.


One of our German customers told me that it takes them 2 years to solve a quality problem (chrome plating issue) and yet it's still pending.


The reason is that that trading company ends up not knowing where the defects were manufactured.




4. Use a third party to take the job



Many agents provide such services and charge a fee to take these jobs, and they do it seperately.


They do this item by item and then charge accordingly.


It's good that all is on the table and they take responsibility as well when the problem comes. Though it's a cost or investment for your company before production starts, but it is a good option if you forecast large orders down the road.



However, it's all the individuals to be on the floor. If the person is with the right experience and if the company is well organized, then you are lucky and still enjoy the life after the containers arrive at your doors.




China Suppliers' Preference



Well, not sure what ways you are choosing but whatever that works for you is okay.



Initially, most of the Chinese factory have no preference to either of the above.


They welcome all people that are placing the orders.



What they really care is if the communication channel is smooth to solve the problems for production and if the payment is settled on timely basis.



So do we.





What Agent That Best Works For You?



Just in case you want to go with an agency, here are a list of questions to ask them.



  • What's your strength? Have you handled the similar products yet?
  • How will you get paid, and by whom?

  • Are your people visiting the factories during production to monitor the full processes?
  • Can you provide referrals or testimonials from happy customers? How long do they use your services?
  • How do you structure our ideas over the workforce? How do you manage the production status?
  • What are you going to do if shipments are behind schedule?
  • What's the cost of your services?


......




Again, get a job to test them we will then know better how to plan for the future.




Share more in the next emails .....








Here are Pictures of Our Recent Client Visits


China Wire Shelving Display Rack,China Manufacturer

Wire Shelving Chrome Rack China



"Your visit is very good, thank you for taking time to visit us and discuss the details of the current projects. You will help us to meet the schedule and make our client happy."

 

RETIF VISIT CHINA SUPPLIER 

 

RETIF FRANCE Agencement de magasin


RETIF CHINA MANUFACTURER WINKELINRICHTING


China manufacturers for store display fixtures


China retail equipment manufacturers


China Store Display Manufacturers retail equipment


We will share more in the coming articles.



CONTACT:

UT Metal Co., Ltd

phone + 86 752 7830752 | fax + 86 752 7830713 | Mob. + 86 1331 6864 500
marketing@UT-Metal.com