There are many myths and untruths floating around about the difficulty of manufacturing in China. One company’s lousy experience can be spread around and become gospel, leading everyone to assume that doing business in 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 manufacturing in China is risky, but if you can mitigate the risks, you will have a positive experience
Let’s look at five common misconceptions about Chinese manufacturing:
Myth #1 You have no control over quality when you use a Chinese manufacturer
This is the case when buyers fail to communicate properly or don’t choose the right manufacturer. When you are placing an order, you can’t assume anything. If you haven’t specified the material or function, the manufacturer will decide on your behalf rather than come back to you for clarification. The decision they take will often not be the one you wanted, so the onus is entirely on you to provide the right 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 before proceeding to full manufacture can reduce the risk as well.
Knowing how much detail is required when briefing in the order takes time and experience to develop. Sometimes there is the language barrier to deal with as well so it can be hard on novice buyers.
Myth #2 All manufacturers expect payment in full before production begins
Many of the manufacturers we deal with are happy to wait for 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 it ships to Australia, but building relationships over time has generated flexible payment terms and trust.
That’s the benefit of developing long-term relationships. 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 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 a Chinese manufacturer has stolen the 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 it. The Chinese government has also cracked down on protecting trademarks in recent years.
Myth #4 All factories exploit their workers
There are some terrible stories about mistreated employees working in fire hazards, but not all factories are like that. We have made many visits to both small and large factories around the country, and many of the factories 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. For many, they would prefer a factory job to work on the land which they may have watched their parents do while they were growing up.
Myth #5 It will take a long time to get a product manufactured
This depends on the product type and manufacturer. If you don’t choose the right manufacturer and you have a relatively small order, you can be kept waiting for a long time. However, if you are diligent about getting a new product produced correct, then you should expect the process to take a little time if you are commissioning samples and testing thoroughly.
Doing Business in China Successfully
Not every Australian business person is cut out for doing business in China. There is a specific skill set that you need to succeed. Our most important piece of advice is to be detail focused if you want to make it - pay attention to all the details and 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.
Manufacturing in China can be a daunting process, particularly if you have heard a few horror stories. If you are finding it stressful and you 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 on 0438 922 058 or contact us online.