There are many myths and untruths floating around about the difficulty of manufacturing products in China. One company’s lousy experience can be spread around and become gospel, leading everyone to assume that expanding one's business ecosystem to China is far riskier than it actually is.
There is no denying that importing goods from China has its risks. However, it also has its rewards. There are many reasons why sourcing Chinese suppliers and manufacturing is risky, but if you can mitigate the risks, you can have a positive experience.
Let’s look at five common misconceptions about Chinese manufacturing:
Myth #1 You have no control over quality when sourcing a manufacturer in China
This is the case when buyers fail to communicate properly or don’t choose the right manufacturer. When you are placing an order, don't make assumptions. If you haven’t specified the material, function or other details, the manufacturer will decide on your behalf instead of coming back to you for clarification. The decision they take will often not be the one you wanted, so your job is to provide the right and accurate instructions.
Asking to see a sample product can also reduce the likelihood of receiving poorly manufactured goods. Making sure you are pleased with the sample's quality, material, and other aspects before proceeding to full production can also reduce risks.
Knowing exactly how much detail you need to provide when briefing the order takes time and experience to develop. Besides missing certain aspects, there also be a language barrier to deal with so it can be hard on novice buyers.
Myth #2 All manufacturers expect payment in full before production begins
Many of the Chinese manufacturers we deal with are happy to wait for the final payment. In most cases, we don’t even pay a deposit, and the goods are paid in full just prior to landing at the Australian port.
It seems incredibly generous to wait for payment while the goods get to Australia, but building relationships over time has generated benefits including flexible payment terms that come from trust. Generous payment terms like these aren’t usually available on the first order with a new factory contact. With time, the manufacturers get to know us and that they are willing to accept payment after the goods are sent.
Myth #3 The factory will always steal your intellectual property
Sure, there have been cases in the past where Chinese manufacturers have stolen intellectual property to make a similar good to sell, but it’s the exception to the rule. We haven’t had this problem. Once a relationship has been established, the Chinese are loyal and wouldn’t risk losing the relationship. The Chinese government has also cracked down on protecting trademarks in recent years.
Myth #4 All factories in China exploit their workers
There are some terrible stories about mistreated employees working in fire hazards, but not all factories in China are like that. We have made many visits to both small and large factories around the country, and many of them value their workers and provide a safe working environment. While you might see the life of a factory worker as atrocious, many workers enjoy their training and the work they do. Many of them prefer a factory job rather than working on the land which they may have watched their parents do.
Myth #5 It will take a long time to get products manufactured
This depends on the product type and manufacturer. If you don’t find manufacturers that are the right fit for your products and don't have the minimum order, you can be kept waiting for a long time. However, if you are diligent about getting a new product produced correctly, and are commissioning samples and testing thoroughly, you should expect the process to take less time.
Doing Business in China Successfully
Not every Australian business person is cut out for China's manufacturing. There is a specific skill set that you need to master. Our most important piece of advice is to be detail focused if you want to make it - pay attention to all the details and be on top of every step of the process. A healthy dose of patience helps as well and ensures you don’t rush any stage which is where many errors can occur.
China manufacturing can be a daunting process, particularly if you have heard horror stories. If you are stressed, don't know how to find suppliers, and want to reduce your risk of a bad experience, don’t hesitate to contact us. We have years of experience with sourcing manufacturers in China. Give Craig from Vara Allied a call at 0438 922 058 or contact us online.
