In your China and overseas manufacturing, there are certain aspects that you have to contend with.

This is the part that’s not pleasant.

Importing isn’t all gloriously bringing a whiz-bang product to market.

To get from point A to point B, there’s negotiations, control and…praying.

The larger, the more steadier the customer, the less they must contend with some of this phenomenon.

You may say they are more privileged in their offshore buying.

Simply because of their size, they get more perks in their manufacturing.

These perks come from their own seemingly limitless pool of resources and their large purchasing power.

On the flip side, the smaller to mid-size customer has to sort of “put up” with things more.

They’re not able to flash PO’s and bank wires and get things changed in a snap.

The old expression is “money talks”.

Not, “please hang on with me for many years while I hope to bring consistent business.”

It doesn’t mean these things are not solvable.

There may be more negotiations involved.

Late nights speaking with a supplier over WeChat trying to solve problems.

Thus, one reason you amplify your control and vigilance over your factory is because of your size.

Even the largest most distinguished customer has to control their manufacturing.

If that’s the case, then how much more should a smaller buyer anticipate the reality of CONTROL. (see diligence, vigilance, availability, close communication with factory).

Things Smaller Buyers have to Put Up with More in their Overseas Manufacturing

Sampling generosity / unlimited revisions:

The supplier isn’t going to liberally load you with samples.

Not only will they not liberally load you with samples, you’ll have to pay for every aspect.

They may charge you for stock pieces.

They’ll charge you for setup fees.

Without a doubt, you’ll be paying the freight for these babies.

When a small buyer asks for freebies in the area of sampling, that’s the same as saying, “I’m not a serious customer”.

There won’t be unlimited revisions of problems.

If you’re a new buyer, suppliers can and do tend to get exasperated and sort of throw their hands up.

Level of importance:

The basic level of how a factory prioritizes a small to mid-size customer is different. Not so much that they won’t take your order, but it’s the noticeable level of importance placed.

A case I saw recently was the factory was willing and able to help a buyer develop a product.

Then the busy season started.

Older, more established customers returned.

The factory wasn’t finished developing this new buyer’s product. Some roadblocks sprang up and things were going slowly.

Once the busy season came, not only did the factory minimize the new customer, they wanted to drop them completely in the middle of developing the new item.

Customization limits:  

Can you do bespoke merchandise from the overseas factories? Yes

Are options, materials, colors, processes limitless? No

Especially for the smaller customer.

To customize material requires investment.

Even if you pay for it, it may not be worth the hassle for the factory to negotiate this with their vendor.

Setting a new production process requires the factory manager to think outside the box.

The order you have on the table may not be worth them stretching what’s already working.

Initiative:  

Larger customers receive better service from the vendor.

Smaller customer needs to remind their factory to provide updates.

That doesn’t mean the smaller company shouldn’t still control and do what’s possible. That means they’ve got to leverage resources at their disposal. In some ways you’ll have to professionally demand needed attention.

This would mean, for example…

  • Client visiting the factory at the proper time.
  • Professionally contacting the factory during key points for photos and updates.
  • Using a competent quality assurance and manufacturing improvement firm to handle what they are unable to handle.

Establish your control parameters with the factory before production starts.

Remind the supplier throughout the order what’s been agreed to.

“Remember, on this date, after this process, we’re to receive production samples / photos, etc..”  – you get my drift.

Active versus passive:

A China factory is still going to have a level of passivity regardless of the customer.

But for the smaller to mid-size customer, the level of passivity is more tangible.

The factory will be in more of a “react” mode than actively doing the right thing.

I call this to-do list minded versus grabbing the proverbial bull by the horns.

What factory will work with them:

There are many excellent factories that supply to world-renown brands.

Then there’s what everyone else has to buy from.

The topnotch factories don’t even have a way for new customers to reach them.

Be careful what you hear in the news.

Not every buyer has the ability, the resources or the connections to pivot from country to country in their manufacturing.

Payment terms:

Last but not least are payment terms.

No factory wants to give small buyers quote unquote favorable terms.

Net 30 or Net 60? That’s for the big players.

A small to mid-size customer can call themselves fortunate if the factory agrees to accept balance upon vessel departure.

A portion of factories won’t release the shipment until the buyer pays the balance.

You may say, “no my factories always said payment after shipment”.

I’d then reply that chances are, you were not always working with factories.

That’s why trade companies exist.