Nowadays,China is one of the largest industrial countries in the world -- almost half of products in the world are made in China and Chinese products are sold all round the world. Besides, most countries have built business ships with China already. However,as foreign businessmen, do you know how to purchase in China? Do you know what to do if you want to buy something from China? Below are five steps about it purchasing in China from your reliable Chinese friend, YAC Chemicals Limited.
1. You Have to Find a Suitable Supplier Firstly.
The purchasers can find a nice sample at a trade show, and then get a good quotation from the company believed to have manufactured the sample and then think their supplier search has ended. Online directories and trade shows are only a starting point. Suppliers pay to be listed or to exhibit, and they are not rigorously screened. Whether the supplier is suitable depends on the orders. If the orders are small, it is usually best to avoid very large manufacturers because they will probably quote high prices and not cares about the orders; smaller factories usually need closer monitoring, especially on the first production run. Before warned: showing a nice factory and then subcontracting production to a smaller workshop is very common and the source of many quality problems.
2.You Should Clearly Define the Expected Product.
How to define an expected product? The key is to write the product expectations into a detailed specification sheet that leaves no room to interpretation and the methods for measuring and testing these specifications, along with the tolerances, should also be included in this document.
If you are developing a new product with a Chinese manufacturer, you should be sure to document the resulting product’s characteristics and production processes as you cannot count on your supplier to give you this information if you later choose to switch to another factory.
3. Wisely Decide Reasonable Payment Terms.
The most common payment method is T/T(Bank Transfer).The standard terms are a 30% deposit before the components are purchased with the remaining 70% to be paid after the supplier faxes the bill of lading to the importer. It can get a bit more complex if a mold or special tooling is necessary during development.
Another popular method is to pay by irrevocable L/C (Letter of Credit). Most serious exporters accept an L/C if you specify reasonable terms. You can send the draft to your supplier for approval before the letter is formally “opened” by your bank. Bank fees are higher than when you pay via T/T, but you are much better protected. You should decide a payment term for new suppliers or for very large orders.
4. Ensure Guaranteed Quality Control in the Factory
One way to make your specification met by the supplier is by going to the factory yourself and monitoring for this or by appointing a third party inspection firm to manage this process for you, and you have to clear that the most common type of quality controls a final random inspection of a statistically valid sample. This statistically valid sample gives professional inspectors quickly and cost effectively draw conclusions about an entire production run.
To take full advantage of QC inspections you should first have defined the product spec sheet, (see section 2 above), which then becomes your inspector’s checklist. Second, your payments (see section 3 above) should be tied to quality approvals. If you pay by T/T, you should not wire the remainder of your payment until your product passes final inspection. If you pay by L/C,the documents required by your bank should include a certificate of quality control issued by your appointed QC firm.
5. Understand the Business Culture in China
As we all know, a common safeguard against opportunism is to build relationships of trust with persons who matter for your business. Unlike in the West, the creation of personal friendship in China is a prerequisite of doing business. In America, contracts, deals and other arrangements are fairly transparent between businesses working together. Not so in China. Never underestimate the importance of existing connections. You need to be dealing with a Chinese person of influence. If that person feels you are trustworthy enough, and if they can get their network of contacts to trust you,there is a chance you will succeed. Asians want to do business with people they trust. But there is no real trust unless a person is in their circle. At first,they don’t know if you will be a good partner. Show respect by keeping some distance. Focus on building the relationship before talking business. Do not go for big profit on your first contract. In China most business gets done over drinks in social settings, as opposed to in America, ｗｈｅｒｅ it often goes done in the boardroom or on the golf course.
Meanwhile, you should also pay attention to some others business habits in China. For example, it is difficult for the Chinese to say’no’ directly. Anything other than a direct ’yes’ could mean ’no’. Be circumspect and reflect on seeming agreements reached. Has an agreement actually been reached? Besides, gift giving is an everyday part of Chinese business culture. Giving and receiving gifts helps to cement relationships.Take gifts with you when visiting and put some thought and effort into the gift selection process.
As an experienced supplier for a wide range of chemical products, YAC Chemicals Limited strives to provide our customers the best products with the best service at the best price. We’re your reliable partner in China!