Suppose you come up with a product idea or think you have market channels for certain products, and you want to find a supplier in China because of the low product development cost and low production cost there. If you Google the product name or concept, you will find tons of China suppliers/manufacturers. However, you still think you have not got one, because you want to find a capable and reliable one that would satisfy your specific needs and have a strong desire to do business with you. Many people get frustrated because they have been communicating with suppliers in China for months, but fail to move forward. The reason, most likely, is that they did not find the suitable one at the beginning. To successfully find a suitable China supplier, you need a strategy. This strategy will consist of awareness, knowledge and a good amount of homework. Below are some practical steps to find a suitable Chinese supplier for you.
STEPS
Understand what you need. You need to first know what is available and have a way to categorize the information. Here are some categories to help you think about Chinese suppliers: manufacturer vs. 3rd-party supplier; Big corporation vs. small family-owned; 3rd-party supplier with in-house product development capability vs. 3rd-party supplier that just buys-in and sells-out; vertically integrated manufacturer vs. assembly-based manufacturer; etc. Properly categorizing the suppliers will help you understand what you need. For example, if you need to import products in a narrow range, you may choose a manufacturer other than a 3rd-party supplier. If you are a small business and need dedicated attention, you may want to develop a good relationship with a small family-owned business.
Do some preliminary Internet research to further develop your category system towards your specific needs. Create a data table to help you record the search result, so the job can be done more efficiently and effectively. The table should include columns like company name, contact information, business scale and scope, category check boxes (important), and notes.
Use search engines to search information related to your product name. The first 100 results would be the most relevant websites related to the product of your concern. You can also find your competitors' information and develop a better sense of market segment and marketing channels.
Use popular business directory websites to obtain very structured information for Chinese suppliers. The directory websites are also excellent resource to obtain industrial knowledge.
Narrow down the the list of suppliers you want to work with to a manageable amount. At this stage, you may already know what your real needs are and what is available. Initiate contact with the suppliers you want to work with, and further develop relationships with them. Eventually, you will find the one. The process can be fun and a friendly experience.
TIPS
Analyzing the types of suppliers has strategic importance. It will help you to understand where you are, what kind of results to expect, and what are the things you need to take care of in the mutual cooperation. You may want to have an experienced person help you to analyze the information. In your strategy, you will also need to include the consideration of the future contracting and operation. You may seek advice from Chinese professionals who understand the Chinese mentality, culture and business practices. You may get the incorrect interpretation if you visit the supplier's English website, or you could omit data that contains key information.
Just because a site is ranked higher in Google search listing, this does not necessarily mean it is a more serious business. Some very good Chinese suppliers are not well-versed in having their website listed highly, while some other Internet guys can have their website listed very highly. Use your industrial judgment.
Information comes from seemly insignificant data, for example, the email addresses may reveal useful information about Chinese suppliers. However, do not judge an address too quickly. You never know where good information can come from.
Be aware that while the decision-maker may not speak any English, establishing good relationship (guanxi) with the top management is crucial for long-term success.
Email is good for exchanging product specifications, catalogue and price list. To establish a deeper relationship, a phone call is 10 times better than email. A personal meeting is 100 times better than a phone call. Many people want to start a business, so you have to show you are more serious. As long as your contact person uses English, you can just go ahead and give that person a phone call. It does not matter how much you and that person can understand each other; you can always follow up with an email.
Work with suppliers that have already exported their products to Europe or the US. Pay attention to the agent relationship. Many manufacturers may have their products exported to the US in good quantity through a third party supplier without an exclusive supply agreement. They may want to have direct channels to the US, and that might mean more business for you.
Consider accessing the U.S. customs records for your supplier to get an independently verified list of their shipments to the U.S. This will tell you who their customers are, how loyal those customers are, as well as the volume capabilities of your factory. Import Genius offers these hard-to-find customs records at affordable rates.
A visit to your supplier production site in China is the only reliable way to truly know its capabilities, to check that the data you have collected on the company is 100% correct, and that ISO & Quality principles are applied: Check the factory organization, its process flows, the quality of goods produced, the packaging, the workers' training level, the overall working conditions, equipment maintenance, etc. This will give you an indication of how the company is managed. A face-to-face meeting with the supplier's management team will also give you an idea of their experience and willingness to embark on your project. You will also be able to create a friendly relationship, which is crucial for your project!
Showing posts with label purchasing. Show all posts
Showing posts with label purchasing. Show all posts
Monday, June 30, 2008
What Makes a Good Supplier?
A lot of growing companies focus on one trait of their suppliers: price. And price certainly is important when you are selecting suppliers to accompany you as you grow your business. But there's more to a supplier than an invoice-and more to the cost of doing business with a supplier than the amount on a purchase order. Remember, too, that suppliers are in business to make money. If you go to the mat with them on every bill, ask them to shave prices on everything they sell to you, or fail to pay your bills promptly, don't be surprised if they stop calling.
After price, reliability is probably the key factor to look for in suppliers. Good suppliers will ship the right number of items, as promised, on time so that they arrive in good shape. Sometimes you can get the best reliability from a large supplier. These companies have the resources to devote to backup systems and sources so that, if something goes wrong, they can still live up to their responsibilities to you. However, don't neglect small suppliers. If you're a large customer of a small company, you'll get more attention and possibly better service and reliability than if you are a small customer of a large supplier. You should also consider splitting your orders among two smaller firms. This can provide you with a backup as well as a high profile.
Stability is another key indicator. You'll want to sign up with vendors who have been in business a long time and have done so without changing businesses every few years. A company that has long-tenured senior executives is another good sign, and a solid reputation with other customers is a promising indicator that a company is stable. When it comes to your own experience, look for telltale signs of vendor trouble, such as shipments that arrive earlier than you requested them-this can be a sign of a vendor that is short on orders and needs to accelerate cash receipts.
Don't forget location. Merchandise ordered from a distant supplier can take a long time to get to you and generate added freight charges quickly. Find out how long a shipment will take to arrive at your loading dock. If you are likely to need something fast, a distant supplier could present a real problem. Also, determine supplier freight policies before you order. If you order a certain quantity, for instance, you may get free shipping. You may be able to combine two or more orders into one and save on freight. Even better, find a comparable supplier closer to home to preserve cost savings and ordering flexibility.
Finally, there's a grab bag of traits that could generally be termed competency. You'll want suppliers who can offer the latest, most advanced products and services. They'll need to have well-trained employees to sell and service their goods. They should be able to offer you a variety of attractive financial terms on purchases. And they should have a realistic attitude toward you, their customer, so that they're willing and eager to work with you to grow both your businesses.
After price, reliability is probably the key factor to look for in suppliers. Good suppliers will ship the right number of items, as promised, on time so that they arrive in good shape. Sometimes you can get the best reliability from a large supplier. These companies have the resources to devote to backup systems and sources so that, if something goes wrong, they can still live up to their responsibilities to you. However, don't neglect small suppliers. If you're a large customer of a small company, you'll get more attention and possibly better service and reliability than if you are a small customer of a large supplier. You should also consider splitting your orders among two smaller firms. This can provide you with a backup as well as a high profile.
Stability is another key indicator. You'll want to sign up with vendors who have been in business a long time and have done so without changing businesses every few years. A company that has long-tenured senior executives is another good sign, and a solid reputation with other customers is a promising indicator that a company is stable. When it comes to your own experience, look for telltale signs of vendor trouble, such as shipments that arrive earlier than you requested them-this can be a sign of a vendor that is short on orders and needs to accelerate cash receipts.
Don't forget location. Merchandise ordered from a distant supplier can take a long time to get to you and generate added freight charges quickly. Find out how long a shipment will take to arrive at your loading dock. If you are likely to need something fast, a distant supplier could present a real problem. Also, determine supplier freight policies before you order. If you order a certain quantity, for instance, you may get free shipping. You may be able to combine two or more orders into one and save on freight. Even better, find a comparable supplier closer to home to preserve cost savings and ordering flexibility.
Finally, there's a grab bag of traits that could generally be termed competency. You'll want suppliers who can offer the latest, most advanced products and services. They'll need to have well-trained employees to sell and service their goods. They should be able to offer you a variety of attractive financial terms on purchases. And they should have a realistic attitude toward you, their customer, so that they're willing and eager to work with you to grow both your businesses.
Is Retailing Ready for Business-to-Business?
Many analysts are predicting that 2000 will explode with Business-to-Business (B2B) developments on the Internet. Is retailing, the ultimate Business-to-Consumer (B2C) industry ready for the coming B2B boom?
Will retailers begin to take full advantage of the ability to connect with both suppliers and customers through the Internet? From their purchases from vendors through their sales to consumers, the Internet appears to be an ideal medium for retailers, one that can expand and adapt to also include their brick-and-mortar stores.
Yet the retail industry has been historically slow to change to new technology. Of course some retailers, led by the giant discounter Wal-Mart, embraced the early form of ecommerce, EDI with gusto. However the majority of retailers still buy many goods with purchase orders transmitted to suppliers via fax. Still even fewer retailers are using the Internet for purchasing than currently use EDI. Is the issue a reluctance among retailers to obtain and use the technology or is it based more on the vendors' lack of Internet B2B capability?
According to a recent study by the National Association of Manufacturers (NAM) 68 percent of responding manufacturing companies said they're not currently using electronic commerce for business transactions. NAM's president, Jerry Jasinowski said, "no one questions the importance of B2B e-commerce, yet relatively few manufacturers are participating in it."
Jasinowski claims the NAM study shows, "a wide disparity between the recognition by business that the Internet is a vital new form of commerce and the actual application of that knowledge by American industry." Would retailers changing to a more Internet B2B method of conducting business spur more vendors into completing transactions online? Or will the revolution need to be led by the vendors?
Wal-Mart became the retail success story of the 1990's based largely on their strong EDI-fueled logistics. Is the next retail success story going to be the company able to harness the power of the Internet for full circle B2B and B2C transactions?
Will retailers begin to take full advantage of the ability to connect with both suppliers and customers through the Internet? From their purchases from vendors through their sales to consumers, the Internet appears to be an ideal medium for retailers, one that can expand and adapt to also include their brick-and-mortar stores.
Yet the retail industry has been historically slow to change to new technology. Of course some retailers, led by the giant discounter Wal-Mart, embraced the early form of ecommerce, EDI with gusto. However the majority of retailers still buy many goods with purchase orders transmitted to suppliers via fax. Still even fewer retailers are using the Internet for purchasing than currently use EDI. Is the issue a reluctance among retailers to obtain and use the technology or is it based more on the vendors' lack of Internet B2B capability?
According to a recent study by the National Association of Manufacturers (NAM) 68 percent of responding manufacturing companies said they're not currently using electronic commerce for business transactions. NAM's president, Jerry Jasinowski said, "no one questions the importance of B2B e-commerce, yet relatively few manufacturers are participating in it."
Jasinowski claims the NAM study shows, "a wide disparity between the recognition by business that the Internet is a vital new form of commerce and the actual application of that knowledge by American industry." Would retailers changing to a more Internet B2B method of conducting business spur more vendors into completing transactions online? Or will the revolution need to be led by the vendors?
Wal-Mart became the retail success story of the 1990's based largely on their strong EDI-fueled logistics. Is the next retail success story going to be the company able to harness the power of the Internet for full circle B2B and B2C transactions?
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