The outsourcing market of China is growing at a rate of 30% annually. Many countries have already relocated their headquarters to China. There is tremendous manufacturing opportunity in China. Outsourcing manufacturing to China gives you the chance to produce a higher volume of products at reasonable cost. Here are some tips that can help you to outsource production to China.
1. Business Culture
Even though China has been modernized over the last 25 years, it is still hard for American to understand the business culture of China. Accommodating those cultural differences is essential. In China, business is based on relationships, whereas, in the US it is based on transactions. The Americans are outspoken, and the Chinese are quiet and conservative. You have to talk to them many times before you can get information from them.
2. Build up Commitment
You need to commit to forming and nurturing healthy working relationships. The Chinese manufacturer must believe that you are giving your full attention to this partnership. If they think that you are not serious about it, they will not manufacture quality products. This will harm your company’s reputation later.
3. Discuss the details with your partner
Chinese factories prefer those who spend more time working closely with them. They expect their partner to get involved in sample making, order placement, quality control, production planning, shipping, etc. It is best to have a team of three or more people to work directly with the factory on a daily basis. You should involve your top management to get better results.
If you outsource manufacturing in China, you can offer 30% to 50% less price to customers. This will create a competitive advantage. But to work with Chinese manufacturing firms, you need to focus on building long-term relationships. You will get good results from a trustworthy relationship.
China’s shipping industry was developed in 1961. The industry has grown and reached international standards both in developing networks and handling efficiency. The Chinese shipping sector is now booming. Here are four reasons why.
1. The Chinese government has invested in water transport infrastructure. New ports are being constructed, and many older facilities are being rebuilt. Efforts are made to containerization at major international ports. These have helped in the growth of the Chinese shipping industry.
2. Steel export from China reached a new level. It has benefitted mid-sized ships. The still mills have production more than the domestic consumption. This has contributed to the growth of the shipping industry in China.
3. The oil product tanker and crude oil tanker market have a strong freight market due to the drop in oil price couple of years back. The demand for oil tankers is high and has a positive impact on the Chinese shipping industry.
4. The demand for importing goods and parts from China is high. Despite the recent price increase, investors are still finding China a cheaper source for their business. This has lead to the growth of the shipping industry in China.
Hundreds of millions of containers are handled by the Chinese ports every year. China manufactures 90% of the world’s containers. There will always be demand for Chinese goods as it was difficult to find any other country that will offer products at such cheap price. So, the shipping industry of China will keep on having a strong foothold.
It is predicted that China will have the largest economy in the world in the 21st century. The relative cost of manufacturing in China has increased recently. Still, China is the cheapest location for American businesses to import goods or parts. If you are an importer of Chinese products, there are many ways you can find professional help.
You can find suppliers in China on the Internet. You can visit sites like Alibaba, Made-in-China.com or Global Sources. There are thousands of suppliers listed on these sites. You will find reviews of different suppliers here. Some sites offer credit check services and suppler capability assessment services as well.
Trade shows are a great platform for finding professional help. In trade shows, you will have the chance to speak to potential suppliers. Having direct interaction with the supplier can help you to evaluate the suppliers and verify their credentials. The Canton Fair is the biggest trade fair in China held twice a year in Guangzhou. Thousands of attendees gather in this fair with a massive collection of products. The East China Fair is also a large trade fair in China that is held every year in Shanghai. Some industry-specific trade fairs are also held each year. You can search ‘China Sourcing Fairs’ site for information on specific industries.
Commission-Based Sourcing Agent
There is commission-base China sourcing agent who can help you find a supplier. These agents find suppliers, very their business status and help you communicate with them. After working with these agents, you will become familiarized with the business process in China.
There are many risks involved in importing products from China. There is the risk of dealing with poor quality goods or fraudulent activities. So, you need to do research and find professional help before you start doing business in China.