Sourcing Products From China? Keep These Things In Mind When Trading With The Dragon
Ashutosh GargNov 27, 2013, 05.24 PM
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Over the past 10 years, imports from
I have also worked with very good suppliers and very poor suppliers. There have been very ethical manufacturers and sometimes fingers got burnt because of very shoddy goods received from unethical suppliers. My learning in sourcing from China has been:
1. Talk to at least 6 suppliers before you decide from whom to buy. This is often quite easy since Chinese manufacturers are clustered together in and around one area in most provinces. You will be surprised at the significant price differential across suppliers for the same product.
2. Do not get taken in by the certificates issued by major buyers that most manufacturers will show you. Every manufacturer claims to be a preferred supplier to the major retail chains in
3. Negotiate long and hard. The Chinese love a good bargain and they love to play
5. Never put all your cards on the table with a Chinese manufacturer. He will spring many surprises in the negotiation and, therefore, you must be well armed with your own set of surprises. Good poker players are great bargainers with a Chinese manufacturer.
6. Always remember that you are the buyer and he needs you more than you need him. The moment you show the slightest weakness with your Chinese supplier, you would have lost the advantage that a buyer should normally have with his supplier. And the Chinese manufacturer will not show any mercy or compassion to you.
7. The only hold a buyer has on a Chinese manufacturer is money for the current shipment. As long you owe him money, he will do your bidding. I have seldom come across a manufacturer who is willing to
8. You must never expect to receive any settlement for damaged or sub-standard goods. Claims are hardly ever settled. You will always be given a plausible excuse that you have no choice but to accept and if you push very hard, you will be told that they will give you a discount in the next shipment. Walk away from such suppliers with your losses because your claims are bound to double with the second shipment.
9. Agree on your pack designs and quality standards in writing. Ask for a signed test pack for approval and record this carefully in your paperwork. Once you open your letter of credit and when you give your go-ahead to manufacture, do not accept any deviation in quality. If you have given your approval to shipment without ensuring quality as per the sample, it is your problem.
10. Ensure that you conduct a pre-shipment quality examination before the goods leave the factory. You will never be able to recover a claim for faulty goods later.
11. Always ask your supplier to deliver your goods to your nominated clearing and forwarding agent at your designated port in China. Don’t ask for delivery to
The moment the export shipment leaves his factory gate, he shall encash your letter of credit and move on to the next order. Whatever you do, be very careful. There is no recourse to law if you run into trouble.
Ashutosh Garg is the chairman of Guardian and the author of the bestselling books The Corner Office and The Buck Stops Here. Twitter: @gargashutosh