| Price | | | | the day left in China. This can be used to your |
| The main reason for sourcing direct from China will | | | | advantage if orders are placed late in the day it is |
| inevitably be price. There is however no certainty that | | | | often possible to get proofs and confirmation back first |
| the suppliers marketing directly to end users in Europe | | | | thing in the morning. Of course any further changes will |
| and the US will be offering the best prices as these will | | | | often be delayed by 24 hours. It is not uncommon for |
| be adjusted to fit to the market. Often a broker, with | | | | the longest phase in a production being the |
| better buying power and bigger volumes, will be able to | | | | communicating of what you or your client requires. |
| offer prices equivalent or sometimes better than the | | | | Credit Terms |
| prices a Chinese supplier will offer. In addition as all | | | | Credit is not something that many Chinese firms will |
| trade in Asia is conducted in USD the exchange rate | | | | offer. Even rock solid corporations will be asked for |
| fluctuations can play havoc with costs and an | | | | large deposits and balance before shipment for orders |
| experienced sourcing company will typically hedge | | | | under $10,000 or so. The usual way of paying for |
| against this or at least have some idea of where the | | | | anything that is over a few thousand USD is a letter of |
| exchange rates are heading. There is also the shipping | | | | credit. This is a contract drawn up with a trade finance |
| costs and import duty that is often not factored in to | | | | bank that lays out specifications for the goods and |
| the costs of goods bought overseas. Pricing on some | | | | guarantees to pay the sum agreed on arrival of the |
| goods (such as flash memory products) is incredibly | | | | product in the payee's port of choice. The contract |
| volatile and can literally change during the course of an | | | | can be fairly detailed with not only specifics about |
| order. | | | | quantities, tolerances but technical specifications about |
| Lead Time | | | | the product itself. This is in effect the guarantee for |
| Lead Time is often the prohibitive factor in choosing | | | | both sides that if the goods are to specification the |
| whether to outsource supply to China. A large delivery | | | | agreed sum will be paid. This document will also include |
| that cannot be air freighted will usually be at sea for 30 | | | | the details of insurance. Shipping goods over from the |
| to 40 days and will require up to a week to clear | | | | Far East is not completely risk free - piracy, storms or |
| customs. No good if you need those branded tins for | | | | accidents can result in the sudden loss over-board of |
| an event in 2 weeks time! Local suppliers can help in a | | | | your container of branded electronics. Therefore a |
| number of ways. Firstly a local supplier will sometimes | | | | watertight insurance policy is required by the financial |
| have stock of the raw product and the branding can | | | | institution guaranteeing the bond. |
| be undertaken in the country of delivery. For example | | | | Goods fit for purpose |
| pad or screen printing suppliers are fairly common, | | | | The last thing you want is to receive your shipment to |
| though there will be some difference in the cost of this | | | | find that they are not in some way fit for purpose. For |
| service but as the biggest cost will be the product | | | | example inferior memory chip in flash drives will render |
| itself it should not be a significant increase. An | | | | them unusable or print problems on promotional tins will |
| experienced sourcing company will also be able to cut | | | | mean they need to be redone. Even more serious are |
| down the shipping time if there is no other option. Bulk | | | | safety issues; for example tin products for sale need |
| deals are usually arranged with shippers to negotiate | | | | to be food safe. This means extensive testing is |
| favourable costs and on shipments smaller than a | | | | required to ensure that levels of toxic chemicals and |
| container there are air freight deals that will be | | | | metals are within the permissible limits. Importing goods |
| affordable. Customs clearance by the agent working | | | | that do not meet these requirements (and have the |
| for a company specialising in importing from abroad will | | | | appropriate certification) will mean at the very least |
| typically be far quicker and hitch free than attempting | | | | goods are impounded and in the worst case scenario |
| to do a one off import. | | | | a large fine for contravening these regulations. When |
| Communication / Customer Service | | | | you are working to tight deadlines receiving incorrect |
| Chinese people are very honourable and hard working | | | | goods can be a complete disaster. |
| on the whole. Yes that is a generalisation which is | | | | Summary |
| never a good thing but there is a real culture of work, | | | | Carefully choosing your Far East supplier and making |
| efficiency and willingness in China for example which is | | | | sure they are experience in the kind of order you are |
| less common in Western Europe. However, there is no | | | | placing will go a long way to ensuring a smooth |
| getting away from the fact that English is not the first | | | | production for your branded promotional goods. There |
| language for a company representative from Shenzen | | | | are many advantages undertake the sourcing of |
| (or one of the other major manufacturing areas in | | | | goods in-house if your company has the resources to |
| China).At best they will have had additional tuition in | | | | dedicate to the process. Having said that, working with |
| English but unless your Cantonese (or even better | | | | a good local specialist sourcing company will often not |
| Mandarin) is up to scratch you will find it difficult to | | | | only save you the frustration of dealing with a supplier |
| communicate and frustrations can build up. Cultural | | | | on the other side of the world but often too will end up |
| differences can mean something that appears obvious | | | | saving money in the long run. Choose one that has the |
| to a European is not picked up. There is also a major | | | | credentials and can demonstrate a good knowledge |
| time zone issue in that by the time someone in London | | | | of the products you are sourcing and the |
| arrives at work there are only two or three hours of | | | | manufacturing processes involved. |