Is China still a good place to buy from ?
In spite of the increase in production costs, China has succeeded in keeping an overall cost advantage over other countries. This resilience is partially due to the fierce competition between Chinese suppliers.
For a given product, there will be tenths or hundreds of Chinese suppliers, often located close to one another and with very similar products, as the last factories to open where often opened by former employees of the first ones.
Naturally, the exacerbated competition is good for buyers that can use it to pressure down on supplier’s prices. The downside of it is that it is hard to identify which one will be the best match if you are not only looking for price but also for quality. This difficulty is enhanced by the plethoric offer of trading companies (also more commercially active and English speaking) that tops the offer of the already numerous factories.
In these conditions, how can I be sure to have access to the good Chinese supplier for my product ?
It is important to act according to a methodology, which we propose in three phases:
- – Supplier research phase
- – Comparison & preselection phase
- – Suppliers Background Checking & final choice
The supplier research phase is rather simple, as one just need to browse what one is looking for, use specialized websites (Alibaba, made-in-china, global sources…), or search specialized fair listings where one can always find a fair share of Chinese suppliers.
The next step is to compare the known technical offer/ capabilities of suppliers, their pricing and response time. Following this comparison, a short list of 2 to 3 suppliers at max should emerge.
You then need to evaluate the credit you can give to this suppliers with background checking : documents (license), address, factory or trading company, percentage of production sub-contracted. It is here quite convenient to use a pre-established questionnaire and then conduct some verifications. You may also require 2/3 of them to provide samples to check quality and reactivity, Even if a little costly, it may be worth it and prepare you for a backup plan.
Supports for choosing good suppliers in China.
Needless to say, following this procedure takes time and a little bit of knowledge about doing business in China is needed in order to avoid usual Chinese suppliers tricks. Furthermore, if the size of the order or the complexity of the parts needs it, supplier visit or third party audit/inspection should be considered seriously.