If you are an Amazon FBA seller, or any seller of online goods, you’ve surely heard people talk about sourcing their products from China. Maybe they’ve even told you it’s cheapest to deal with the factories directly, avoiding any middlemen. Here are several reasons why sourcing from China yourself is a bad idea.
Chinese factories tend to have different rules for local Chinese businesses versus American-based businesses. For instance, when negotiating a price, they may come down in price, but omit the detail that the decrease in price will result in a lower quality manufacturing process or materials. Or, the price may go up at the last minute due to “rising costs” of the materials. Or, the quote was actually for the original bare bones product, not your final product which has a custom logo and packaging. Contracts between US buyers and Chinese factories are often quite vague, and don’t go into the nitty-gritty details of the product. This lack of detail makes it difficult for you to enforce any issues that come up down the road with your product. And, once they have your money, they likely won’t respond to your inquiries.
Other risks include not having eyes on the production and quality control process. Unless you are willing to fly to China to oversee your product’s manufacturing process, the first time you will see your product is when it arrives fully produced months later. It may or may not be to your satisfaction, and there’s not much you can do about it at that point. Another big risk is the factory getting completely shut down mid-production. This results in not only lost time and money, but now you have to start the vetting and negotiating process all over again with a new factory.
If the risks haven’t raised a few red flags for you, the reality of the time it takes to work with a Chinese factory is astounding. The first headache is simply a language barrier. While many account managers do speak English, it is not their native language, and can cause some confusion for both of you. There is also the time difference to deal with – China is 13 hours ahead of our Eastern Standard Time Zone, so most of the day you will be completely off of their workday schedule. You may also receive communications on multiple channels like WeChat, Skype and email, and will need to keep very close track of your correspondence with them.
The other rather large headache is finding the right factory in the first place. You need to know what they specialize in manufacturing, what their reputation is, how they fare pricing-wise, what their turn-around times are, and what shipping methods they use. That can be a full-time job in itself.
There is an easy solution around all of these risks and headaches, and that is to go with a trusted advisor that knows how to do sourcing business in China.