Real McCoy Or Rip-Off? Top 8 Signs Of A Well Managed Factory In China

Author xlxmarketing 25.3.2009. | 14:59

China is well known as being the factory of the world, and there isn’t anything that has not been produced or manufactured in China.

It is this reputation that draws many retailers and trade experts from all over the world to mainland China to get goods made, or to buy goods.

But finding the right factory supplier to accommodate your business needs is not as simple as you might think.

In many places you look there are horror stories about items made to the wrong specifications, faulty products and downright fraudulent actions. So it always pays to watch your step when sourcing and select the factory carefully.

Thankfully there are 8 simple questions you can ask yourself to determine whether you will get a good deal or a raw deal from a potential supplier:

Question 1) Do they have good quality products?

While this is often difficult to determine, there are a series of things you can ask suppliers to determine if the wholesale items you are sourcing will increase your reputation, or harm it.

Questions you need to ask to know if the consumer electronics you are thinking of buying are good products include:

  • What materials were used to produce the product? (Some materials, like led paint should be avoided at all costs when sourcing wholesale consumer electronics)
  • Is the product certified (CE)
  • How long will the battery last?
  • How long will the battery take to fully charge?
  • What is the distance of the (IR) infrared frequency capability, in meters?
  • Does the product make any noise when operational, what, how much?
  • How much does the product weigh and what are its dimensions?

You might understand the product you’re sourcing inside out, but judging the product as an average consumer will help you make a better decision on whether to purchase it or not.

Products like this RC toy, if made properly will boost your reputation tenfold

 

Make sure you test the wholesale product while at the factory, ask all the questions you need to in relation to the product, and get the answers and paperwork you need before you make your decision.

Question 2) Does the packaging look good?

While some factories produce good quality products, the packaging can be a different story.

The things to pay close attention to is the dimensions of the box as it could affect the cost of shipping and Trade Mark (TM) prints that can potentially infringe copyright laws.

Packaging for products like this RC toy can still be flashy without breaking any copyright laws.

 

Questions to ask regarding packaging should be:

  • If the dimensions of the box are not suitable for shipping, can the factory change the box to suit your needs?
  • What materials are used to in the product’s packaging? (This includes ink as some may use a lead paint, which should be avoided at all costs)

 

Question 3) Do they have a fast lead time

Where ever you are in the world, lead time is very important, as customers would love nothing better to get their products the minute the order is done.

The supplier should have the capability of ensuring the delivery time you need. This is very important to inquire about as lead time is now just as big a deciding factor as price.

Question 4) Are their prices competitive?

When it comes to price, this is influenced by several aspects, of which the quality of the product tops the list.

Never accept the first given price instantly as it always pays to shop around. You should have already researched the market value of the product and depending on the quality after testing the product you should have a rough idea of what the value of the product is.

You should always source and visit more than one supplier, in fact you should visit SEVERAL suppliers!!!

Question 5) Do they have a MOQ? How big is it?

This is something that is usually discussed after essential points like lead time, price, quality and packing are out of the way.

However, that doesn’t mean that the Minimum Quantity Order (MOQ) isn’t a deal breaker.

The product might be great, packaging fantastic, price good and lead time acceptable, but if you have to order more products than you need it can cause difficulties and you will have to calculate if it is feasible to have more of the product in stock than you usually have.

Normally, some MOQ requirements are reasonable and acceptable, but if suppliers ask for four times the MOQ than you can accept you may want to think about looking for an alternate source.

You may still consider this, depending on the importance of the product to your inventory plans, but it is still worth trying to source it from another supplier before making up your mind.

When considering whether or not to accept a MOQ that would be normally beyond your means take two things into consideration:

  1. Are you happy having such a large part of your working capital tied up in inventory?
  2. How fast will you be able to sell the items sitting in stock?

 

 

Question 6) Is the factory being openness and honest with you? How can you tell?

The supplier must be open minded and honest with you. They should understand your business needs and accept that the lead time, price and MOQ you can accept will depend on the size of your business and your business operational procedures.

But let’s face it. There can never be complete openness in a supplier-customer relationship!

The level of openness depends on what aspect you are discussing, and there is no doubt that a supplier will never be 100% open with you.

Ask yourself whether they really answered the question with the information you asked for, or just talked around the question.

 

Make sure you are not mislead by the meaning of “openness” and “honesty”. It doesn’t mean you should spill your guts to the supplier.

All you need to do is to gain their trust through tactful dialogue. Let them answer your questions and pay attention to what they say. Ask yourself whether they really answered the question with the information you asked for, or just talked around the question.

You should test their knowledge of the products. Some suppliers will simply tell you what you want to hear while others will be open and honest, even if it may cost them a sale.

Question 7) Are you being fair to each other?

People like to be treated fairly in life and business. Fairness will lead to good business relationship with your supplier, and help tremendously down the line.

Building good rapport with your supplier is highly advisable as it helps build a long term relationship with them, and get better prices, more favorable MOQs, better lead times and all over better treatment later on.

You should also understand when a factory cannot give you the lead time, price or MOQ you want and end negotiations on friendly terms.

You should be fair in understanding that they have a business to run, just like you do.

 

When they say they cannot meet you on the terms you set it doesn’t mean they are bad suppliers, nor does it mean that they’re not being fair.

You should be fair in understanding that they have a business to run, just like you do.

This is why it is very important to source and visit as many suppliers as you possibly can.

Question 8 ) What is the factory capacity / organizational structure?

A good business man should always learn about the suppliers and factories organizational structures he is sourcing from.

If the company says they can produce the quantity you require, but they only have a handful of employees, for example you should start to question their capabilities.

If the factory looks this bad there is a good chance they won’t be able to handle the job you want to give them (source gruntzooki from Flickr)

 

When you visit the supplier’s factory, make sure you get a tour of the facilities. Have a look at their machines and the building surrounding them. Is the workspace clean? Does it look well run to you or is it complete mess and cannot make head or tails from?

However, keep in mind that the definition of “clean” changes from country to country, company to company and even person to person.

A well run factory should be fairly easy to spot. Ask them how many employees they have, what their output capacity for a certain product is and how they manufacture these products. Also ask where and how they package and store products after they have manufactured them.

You might experience difficulties in communicating with suppliers. And even though most suppliers have an English speaking employee, you should always have a translator with you, as it means that you have someone on your side who speaks the language.

So start doing your research now and get an idea of your market.

Any spadework done before you touch down on your next sourcing trip is sure to pay off in buckets.

Author xlxmarketing 25.3.2009. | 14:59
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