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.