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Sourcing Promotional Goods in China – The 5 Things You Need to Know

Price

The main reason for sourcing direct from China will inevitably be price. There is however no certainty that the suppliers marketing directly to end users in Europe and the US will be offering the best prices as these will be adjusted to fit to the market. Often a broker, with better buying power and bigger volumes, will be able to offer prices equivalent or sometimes better than the prices a Chinese supplier will offer. In addition as all trade in Asia is conducted in USD the exchange rate fluctuations can play havoc with costs and an experienced sourcing company will typically hedge against this or at least have some idea of where the exchange rates are heading. There is also the shipping costs and import duty that is often not factored in to the costs of goods bought overseas. Pricing on some goods (such as flash memory products) is incredibly volatile and can literally change during the course of an order.

Lead Time

Lead Time is often the prohibitive factor in choosing whether to outsource supply to China. A large delivery that cannot be air freighted will usually be at sea for 30 to 40 days and will require up to a week to clear customs. No good if you need those branded tins for an event in 2 weeks time! Local suppliers can help in a number of ways. Firstly a local supplier will sometimes have stock of the raw product and the branding can be undertaken in the country of delivery. For example pad or screen printing suppliers are fairly common, though there will be some difference in the cost of this service but as the biggest cost will be the product itself it should not be a significant increase. An experienced sourcing company will also be able to cut down the shipping time if there is no other option. Bulk deals are usually arranged with shippers to negotiate favourable costs and on shipments smaller than a container there are air freight deals that will be affordable. Customs clearance by the agent working for a company specialising in importing from abroad will typically be far quicker and hitch free than attempting to do a one off import.

Communication / Customer Service

Chinese people are very honourable and hard working on the whole. Yes that is a generalisation which is never a good thing but there is a real culture of work, efficiency and willingness in China for example which is less common in Western Europe. However, there is no getting away from the fact that English is not the first language for a company representative from Shenzen (or one of the other major manufacturing areas in China).At best they will have had additional tuition in English but unless your Cantonese (or even better Mandarin) is up to scratch you will find it difficult to communicate and frustrations can build up. Cultural differences can mean something that appears obvious to a European is not picked up. There is also a major time zone issue in that by the time someone in London arrives at work there are only two or three hours of the day left in China. This can be used to your advantage if orders are placed late in the day it is often possible to get proofs and confirmation back first thing in the morning. Of course any further changes will often be delayed by 24 hours. It is not uncommon for the longest phase in a production being the communicating of what you or your client requires.

Credit Terms

Credit is not something that many Chinese firms will offer. Even rock solid corporations will be asked for large deposits and balance before shipment for orders under $10,000 or so. The usual way of paying for anything that is over a few thousand USD is a letter of credit. This is a contract drawn up with a trade finance bank that lays out specifications for the goods and guarantees to pay the sum agreed on arrival of the product in the payee’s port of choice. The contract can be fairly detailed with not only specifics about quantities, tolerances but technical specifications about the product itself. This is in effect the guarantee for both sides that if the goods are to specification the agreed sum will be paid. This document will also include the details of insurance. Shipping goods over from the Far East is not completely risk free – piracy, storms or accidents can result in the sudden loss over-board of your container of branded electronics. Therefore a watertight insurance policy is required by the financial institution guaranteeing the bond.

Goods fit for purpose

The last thing you want is to receive your shipment to find that they are not in some way fit for purpose. For example inferior memory chip in flash drives will render them unusable or print problems on promotional tins will mean they need to be redone. Even more serious are safety issues; for example tin products for sale need to be food safe. This means extensive testing is required to ensure that levels of toxic chemicals and metals are within the permissible limits. Importing goods that do not meet these requirements (and have the appropriate certification) will mean at the very least goods are impounded and in the worst case scenario a large fine for contravening these regulations. When you are working to tight deadlines receiving incorrect goods can be a complete disaster.

Summary

Carefully choosing your Far East supplier and making sure they are experience in the kind of order you are placing will go a long way to ensuring a smooth production for your branded promotional goods. There are many advantages undertake the sourcing of goods in-house if your company has the resources to dedicate to the process. Having said that, working with a good local specialist sourcing company will often not only save you the frustration of dealing with a supplier on the other side of the world but often too will end up saving money in the long run. Choose one that has the credentials and can demonstrate a good knowledge of the products you are sourcing and the manufacturing processes involved.



Source by Jonathan V Moore

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