6 Common Misconceptions of Buying from Asian Suppliers
Asia, led by China over the past two decades, has long been one of the greatest centres for trade. From the ancient days of the Silk Road to the modern megacities of Guangdong, Shanghai , Delhi, Ho Chi Minh City, Bangalore, Hong Kong, Dhaka to name a few throughout many points in its history, stood out as a home of commerce. However, this does not mean that one should just wade into Asia’s manufacturing sector. The region covers two thirds of the world’s population mixed together with a variety of cultures, languages and political mindsets. The region is a dynamic hub but there is complexity at every turn and understanding what these are at a granular level and how they may impact your supply chain is key to unlocking the vast opportunity that this part of the world presents.
Fortunately, many of these issues can be addressed with some local experience on the ground. The internet revolution has added an enormous upside to how business can be conducted and reduced global expanses to the press of a button at a computer in someone’s home. But with that, people and businesses have assumed that just as it is easy to find a supplier, it is easy to manage the supplier remotely. As a starting point, it is worthwhile to first dispel some of the myths that exist on doing business in this part of the world.
Myth 1: I Can Manage Everything from Overseas
If you were buying from a manufacturer down the road from your home, and were committing considerable working capital in purchasing products or investing in tooling, there is little doubt that you would make sure you had visibility of what was going on at the plant, likely frequenting the site at numerous points during the production. The same should be the case with Asian manufacturers, but too often we see companies managing at arm’s length; different time zones, different language, different culture – what could possibly go wrong?
There is little doubt that any dollar committed to the purchase of the manufacture of products should be carefully managed and looked after. Having some kind of local oversight is vital to making this happen. It allows issues to be identified and addressed when they should be. All because the internet suggests that the factory is a good one, does not mean that your production will necessarily be what you need it to be.
Myth 2: Suppliers are Easy to Find
There is no doubt that sites like Alibaba make connecting with suppliers easier (and that is a good thing!). But that does not mean that these factories are necessarily the best suited to manufacture your products, such as manufacturing capability, market experience, access to certain raw materials, ability to export, size of the business, financial health, location, IP to name just a few.
The key point is developing a sustainable partnership in the truest sense of the word. Selecting the right supplier means, particularly in Asia, having face to face meetings, seeing the site and understand why this company and location is best suited to your needs. We would suggest that going one step further as part of the due diligence process and taking an ‘under-the-hood’ approach can identify any potential issues beyond simply the manufacturing aspect.
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