When you’re starting out with outsourcing your manufacturing to China, it’s a steep learning curve. There are many pitfalls you probably aren’t even aware of. But if you do your research, you can avoid making the same mistakes as others before you. Here are our tips for achieving the best outcome.
7 Tips for Outsourced Manufacturing
There’s no denying outsourcing any manufacturing to China has its pros and cons. Price is the enormous advantage, but if production doesn’t go to plan, it’s possible you could make a financial loss.
While you might think the person you’re dealing with has excellent English and communication skills, it’s important not to forget they probably won’t be the producer. Add to that the cultural differences, and communications can be a bumpy road. You want to make your instructions specific, but not too detailed that you end up supplying so much information that they don’t have time to read it. Stick to the most important information.
#2 Samples of Products
Product manufacturing in China can be fraught with problems. But you can overcome most of them by requesting a sample product first.
It doesn’t matter how rushed you are to get the final product on a ship bound for Australia, if you skip or rush the sampling process, there’s a high chance you won’t be happy with the final product. Getting a refund will be difficult if you don’t sign off on a sample.
#3 Drawings Are Better than Descriptions
A picture says a thousand words. Rather than giving your Chinese manufacturer long written instructions which they may struggle to comprehend, use drawings and photos instead. Label the drawings with information about materials or features you require.
#4 Reputable Factory
Dealing with a factory in China isn’t the same as an Australian factory. Overseas customers have little protection from intellectual property theft in China. If a factory steals a product design or infringes a trademark or patent, it’s difficult to stop them.
Using a trusted factory can reduce the risks. Speak to other businesses who use Chinese factories to make products of similar materials to yours.
If you don’t know anyone who can give you a referral, speak to an import agent. Manufacturers value the relationships they have with import agents because they provide them with work from multiple clients. Factories are less inclined to preserve the relationship with a small Australian business if there are bigger gains to be made.
#5 Be Prepared for High Minimum Order Quantity (MOQ)
Most Chinese factories don’t want to deal with small orders. They can make more profit on large sized orders so their MOQ may be far higher than you’re prepared to purchase. You may need to look hard for a factory willing to produce smaller quantities.
#6 Time Consuming Communications
The thought of saving thousands on the cost of an order is a big incentive, but be prepared to spend time on the set-up and relationship with your new supplier. Finding the right factory and producing a sample you’re happy with can take many hours of your time. While it may be a once-off cost, if you’re already a time-poor business owner, you may be better off asking a staff member to deal with the liaison or outsource the job to an import agent who has plenty of experience and contacts to get the job done faster.
#7 Don’t Assume the Next Order Will Be the Same
Your first order may go through smoothly. You're happy with the quality of the product and the price you paid. But you can’t assume that you can just reorder and expect everything to go as well with the second, third or even twentieth order. A Chinese factory may decide to change the raw material used on an order, increase the unit price for no reason or close their doors, never to be contacted again. Provide written instructions with each order detailing the materials you require in the product and agree on the price with each order.
The pros and cons of outsourcing to China need to be weighed up carefully. If you can find the right supplier and communicate through the issues, your Chinese product manufacturing can be a success story.
If you need assistance with sourcing a reputable factory to manufacture your products in China, call Vara Allied on 6115 0118 or contact us online