Businesses sourcing from China should avoid depending on the supplier’s salespeople. Typically hired for their English language skills, they lack technical expertise and do not serve as project managers.
In most Chinese factories, the absence of a dedicated project manager means the responsibility falls on the buyer while you order from China, requiring their oversight, although it is manageable.
How professional importers track production
Our observations show that some buyers are able to steer clear of most issues. They excel in the following few things:
– During the audit, they verify the factory’s capability to ensure that they can fulfil the order within a suitable time limit.
– They add a cushion of two to three weeks to the supplier’s estimate.
– During production, they send an inspector for new items or manufacturers. The purpose is to verify whether the entire order is manufactured at the authorized manufacturing site, the status of production, and the quality of the product.
– They monitor the advancements in production using project management approaches.
Negotiate Price
Setting realistic expectations is crucial for aligning prices effectively without receiving unsuitable information.
In China, product quality is directly tied to the price offered, and it is important to be cautious as factories rarely decline target prices unless they are highly unrealistic.
Quantity significantly influences pricing. Once the calculations are done and the required inventory and associated costs are determined, it is time to proceed with placing the order.
Ensure that the minimum order quantity is met to streamline the procurement process and effectively meet your inventory needs.
Delivery Dates
The validity of delivery dates in China is only binding if expressly agreed in writing, typically after advance payment. In the absence of a specified date, timely delivery occurs once the Seller notifies readiness.
Chinese suppliers often overlook agreed delivery dates, requiring diligent follow-up for urgent orders.
Monitoring production progress and reminding suppliers of schedules is vital to ensure timely deliveries and meet expectations.
Effective communication and proactive engagement are necessary to maintain delivery integrity and streamline the supply chain for urgent material requirements.
Payment Terms
When engaging with factories, it is crucial to conduct a thorough verification of their credentials before any payments are made.
After confirming their credentials and finalizing all necessary contracts, the typical payment terms involve a 30% deposit to the factory for the goods.
The remaining balance is settled once the goods have successfully passed your quality control checks and are ready for export from your warehouse.
Upon receipt of the goods, the remaining 70% will be paid. This systematic approach ensures financial security and aligns with the fulfilment of quality and delivery requirements.
By requiring the supplier to spend 70% of the sale price on raw materials and components with only a 30% deposit, you can establish leverage for future negotiations and ensure heightened attention to your requests.
It is imperative to withhold the remainder until quality is confirmed through product inspection, thereby safeguarding your interests and maintaining product integrity.
Maple Sourcing Ltd. is a trustworthy sourcing agent in China that can be hired for order monitoring services to ensure all the aspects of ordering is smooth.
