Reprinted from TrustedPeer
Meet the Expert
CEO, SF Global Sourcing
- 20-plus years servicing clients in need of outsourced manufacturing worldwide, including from China, Taiwan, South Korea, Poland, Israel and the U.S.
- Past Chairman of the Electronic Retailing Association and board member of the Europe Electronic Retailing Association.
Session Packages from $500
Your Expert Package Includes:
- All 7 Best Practices
- Pre-Call Discovery Process
- One-on-One Call with Expert
- Session Summary Report
- Post-Session Engagement
Outsourcing of Manufactured Consumer Goods and Promotional Materials
CEO, SF Global Sourcing
Risks & Opportunities
- Doing business in a culture that you're not deeply familiar with can be very tricky given all of the opportunities for misunderstandings.
- You can get ripped off, but then, that's no different than doing business anywhere else.
- Doing business in China requires carefully following specific steps (including quality control) in order to make sure you get what you want, and not everyone is patient and savvy enough to follow those steps.
- The Chinese don't understand the value of a brand the way Americans do, so they don't necessarily see how poor quality can affect a company's brand and reputation. Americans really see the value of protecting their brand with great quality, whereas the Chinese, because everything is government-owned, tend to have more of an attitude of, "Oh, well, if we don't get it just right the the first time, we can still sell it and do better the second time."
- It can be very tricky to convey some of the subjective aspects of what you're looking for in your product. For example, if you want your product to be "softer" than a prototype, then negotiating exactly what "softer" means in a very particular context (and over thousands of miles) can be a challenge. It requires a lot of patience and trial and error.
- Labor is very cheap, so you can get a high volume of units made very inexpensively. This obviously makes a big difference with products that are really labor-intensive, including assembling kits of goods.
- The Chinese are very willing to help with the development of your product. It might take time and a lot of back-and-forth, but they won't charge you much for it.
- If you're distributing your product internationally, China is a great place to do it from because there's such great infrastructure. All of the cargo ships in the world go through Chinese ports.
- The Chinese make everything, so you can buy all of the parts for your product there. This can be particularly advantageous when you are putting together a package of products. For example, if you sell blenders and you want to sell a package that includes not just the blender but a spatula, a DVD, a cookbook, and an apron, you can buy all of the components in China.
Outsourcing of Manufactured Consumer Goods and Promotional Materials: Risks & Opportunities