How to Make Chinese Factory Visits More Successful – Part One – Major Reasons For the Visits
There are many possible reasons to visit Chinese factories, but the four listed below seem to be the best.
Visiting new facilities for the first time – A Comprehensive Analysis
There’s a good chance that there are factories you’ve heard about at any of these Chinese Trade fairs or factories which you have been in contact with from your home country but had never visited in person.
Naturally, you’ll want to take the time to evaluate the factories you are considering to ensure they meet your expectations.
In a Factory for a Discussion of the possibility of a new large Volume Project
If you’re looking to discuss an exciting new project in large volumes, it is likely that you have had a visit to this factory previously and are familiar with their history. The right importer will never make a big purchase with a company they and/or their Importing Consultant has not evaluated thoroughly. It is better to conduct the assessment in a smaller order to see if surprise issues occur prior to proceeding to a larger purchase.
Going to a Factory Due to the Quality or Delivery Time Issues
There are quality or delivery issues, and you want to know what is the cause. It is also important to know if the issues are being resolved satisfactorily or if they can be fixed before they cost much money or time.
The motives and solutions provided by the factory management might not be all that they claim to be. The most significant problem may not be recognized by you at all. There may be an attempt to cover up the issue. You’ll want these issues resolved fast. Going to the factory to apply your knowledge, or going deeper, is often the best option. It is a good idea to bring an interpreter. It is likely that you will want to speak directly with the engineers of the factory. They typically have the most knowledge of the situation and might already have the best option.
Negotiate the Terms and Prices for new Large-Scale Orders
If you’re placing big quantity orders, it is likely you have visited before and are familiar with their history.
If you’ve got large volume orders in your possession, you will have more bargaining capabilities. Factories prefer large volume orders due to a variety of reasons. They can, for instance, purchase raw materials and components at a lower cost in bulk. A long production run means less frequent production line changes. Additionally, the cost of tooling is spread out over greater quantity.
When the products are designed and being manufactured, this means that there is less engineering effort required. In general, production runs that are long cut down on the time that production workers must learn how to make new products.
Be aware of this when you are conducting your discussions.
My opinion is that it’s one of the rare opportunities to bargain better conditions and pricing. Although still being competitive against other factories, the cost of raw components and components can make bargaining prices for smaller orders difficult. Another thing to keep in mind is that these growing raw material and component costs mean that the factory won’t put orders in with suppliers until their L/C is received. In exchange for the huge order, they’ll pass some of their savings to you.
In the case of an importer, you’re responsible for anything that happens to your product. In the event of an unsolved legal matter, it’s vital that you demonstrate to the court that you’ve taken every precaution necessary, which includes reviewing the factories regularly.
It’s the same essential job as inspecting products prior to shipment and reviewing them when they arrive in your storage facility.
Klaus-Dieter Hanke has been a successful exporter/importer for over two years. He is the creator of the highly successful eight-ebook book series “Importing From China”.