Thinking of Buying China direct? Our checklist:

Thinking of Buying China direct? Our checklist:

Step #1 – Develop a list of all product specifications including: materials, dimensions, components, etc. Different products have different materials and manufacturing techniques. Different suppliers use different subcontractors who in turn may use different materials and procedures.

It can be very easy for your manufacturer to cut corners. For example, with our watches we had to pick the exact movement, grade of stainless steel and the exact clasp we wanted them to order. We then had to verify the sample to make sure that all of the requirements were met. If we didn’t know anything about stainless steel quality, you can bet that the factory would have used the cheapest one available to them. Get your sample confirmed by a third party. Did they use the correct grade of stainless steel? From the beginning don’t assume that your suppliers can connect the dots or fill in information that you left out. You personally are responsible for making sure all of your ‘T’s’ are crossed and your ‘I’s’ are dotted when it comes to product specifications.

Step # 2 – Research what product specifications and product certifications your product and the market you’re selling to require. If you are located in the EU and/or the USA, you need to take product certification research seriously in the early stages. If your product is subject to certification requirements, then you will need to take this into account when researching suppliers.

Toys, electronics, certain plastics, construction materials, vehicles, food, medical equipment, machines, chemicals, and certain plastics are products that usually need to be certified before they can legally be imported and sold. The easy way to find out if a product requires a certificate is to review the product descriptions on Alibaba. If suppliers mention that their products are certified this is a sign that your products probably require some kind of certification.

Step # 3 – Start reaching out to suppliers and building your list. Remember that you’re not going to send out the same boilerplate email to every factory. You’re going to come off professional, with all of the product specifications already ironed out and ready to present to the factories. The goal in this stage isn’t to reach out to one or two factories, but instead 20 or 30 factories. You want to cast a large net and whittle it down from there. You don’t want to waste time with factories that cannot manufacture your product. There is nothing worse than realizing a relationship isn’t going to work out after you have put in months and months on developing a relationship.

Step # 4 – Get an initial product quotes from your list of suppliers. Provide the suppliers with very clear product descriptions and quality requirements. Do not ask your supplier to quote you until you have the final product specifications. You don’t want to let an otherwise good supplier drop out because you appear to be disorganized. Require the supplier to confirm all product specifications in a quotation email. If you need 306 grade stainless steel, then double confirm the price is for this grade. Understand that suppliers know that you are building a list of suppliers and they want to do all they can do get into the second and third phases of your search. The more you invest with a factory, the more leverage they will have.

Step # 5 Proceed To Disqualify Suppliers From Your List Things that may disqualify a factory: Not interested in your inquiry / consider you to be a waste of time Don’t quickly respond to your communications. This is a bad sign in the early stages. Cannot comply with your product specifications and / or quality requirements Don’t make products to certification standards required for your market. Refuse to sign a sales agreement. Don’t be afraid to disqualify factories. As we stated in the blueprint, you always want to have multiple factory options. There is nothing worse than being in a situation where you have no leverage. If you only have one possible supplier and problems, come up, then you may have nowhere to turn. Factories know that you have invested time and money into price research, product samples and negotiation and? it’s already too late for you to go back and start from scratch. This is their leverage. When a supplier feels confident that they have locked in, they may:

Add unexpected costs during the product process. All of a sudden change their mind on quality inspection. Use cheaper materials as a way to save money. Refuse to take the blame for problems that occur. In all of these cases you may find yourself with your back against a wall with no other options. So please give yourself options.

Step # 6 – Request a supplier audit from the factories. Before you get too far down the rabbit hole you want to verify the company is who they say they are as well as see how they react to formal procedures. Verify the name of the Legal Representative: This person shall sign the PI and Sales agreement. Verify the business license:?This is the company you shall pay and it shall match the company name and address. The receiver (payment beneficiary) shall have exactly the same name as the company name of your supplier. Are their certifications still valid? Confirm whether the product is actually manufactured by this company or subcontracted to another manufacturer. ?Keep in mind that even manufacturers subcontract orders to other (often substandard) factories.

Step # 7 – Plan A Trip to China When you choose to visit a factory, you get to witness first hand who the people are behind the operation and their manufacturing resources, capacity and overall product knowledge. You want to get product feedback from the supplier. Remember that these factories have been making these products long before you ever imagined making them. So use this to your advantage and ask questions. Dive into the product with the product engineers and see what kind of feedback they can give you.

Sidenote: Take this feedback into consideration, but also understand where it is coming from. Their expertise is in manufacturing the product, NOT in the design and marketing of the product. They have different interests and different designs appeal to them. Network with the Lao Ban. Try and get to know the man in charge of the operation. Any factory owner you want to work with should be very open to visiting with you. This will make you a higher priority to the supplier. The more suppliers you visit the more inputs on manufacturing limitations, pricing and product information you are likely to receive. This is why going to an event like the Canton fair is so important. You can sit down with all of the factories in one day instead of traveling from factory to factory over multiple weeks. Negotiate in person.

Step # 8 – Samples Pay for and order initial sample. Approve and/or request changes. Keep the final approved sample in pristine conditions for reference purposes.

Step #9 – Negotiate and Sign a Sales Agreement After you have vetted the factory, developed and approved the samples it’s time to sit down and sign the sales agreement that we talked about in Chapter 9. You want to make sure the factory is willing to stand behind all of their promises.

Step #10 – Place Order and Deposit It’s time to place the order. Remember, on your first order that less is more. Even if you have the money. Again, with manufacturing not being a perfect science there will be things that come up. Hedge your bets and instead of going all in on the first order, trend towards your minimum. At the time of the order, you will make a deposit. In most cases it will be 30% upfront to get production started. If you’re being pushed around and they are requiring something different then please post about it in the forums.

Step #11- Production Management Keep constant and clear communication with the factory throughout the whole process. Check in with them weekly for progress reports and updates on delays. During the second half of the product schedule visit once a week. Either by you or a QC company. Be ready and able to respond to problems quickly. Let’s assume that there was a substantial amount of defect units in the latest batch. To begin with, hopefully you have a Sales Agreement that specifies how this situation should be handled, and since you still need the products, the best thing is simply allowing the supplier to repair or remake the products. It sounds simple ? and if you have applied our strategies up to this point ?then the supplier is likely to agree to a remake or repair. However, most buyers make a major mistake that makes a repair or remake impossible.??They place the order too late and don’t have time for another 30 days of repairs. You have buyers waiting and you may even be about to run out of stock. Many importers end up paying in full for defects, or even dangerous products.

Step #12 – Quality Control Make a list of what you consider to be defects: Both cosmetic and functional defects. Performing Quality Control at multiple times throughout the production process can save you big headaches. Typically you’ll want to do it before the assembly takes place. MUST HAVE QC on your first product run. You will learn the defects as you see them. Keep a list of all the issues that are not acceptable so that a QC company can take this process over down the road.

Step #13 – Shipping Determine the best way to ship your product, air or freight. Work with a shipping agent that can coordinate the customs clearance for you. Need referrals for shipping agents?

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