Focus on those factories that can clearly show production experience
How do you know if a supplier has production experience?
Focus on those factories that can clearly show production experience with your particular product or the production method. When you ask “Show me some samples”, and it takes that factory weeks or months to get you some samples, it probably means that they don’t make that product on a day-to-day basis. So they’re not the real factory!
I remember one time, I asked the supplier who told me they were the factory to give me some samples, and it took two weeks. The reason it took two weeks is they had their friend in America go to Wal-Mart, buy a similar product, ship it back to China—American Wal-Mart—then ship it to me, and said “This is a sample of what we make at our factory.” They’re trying to convince me to place an order with them based on this rough sample that wasn’t a sample from their factory. It was just a prototype of what they “could make”.
I like to deal with factories that say “We make this. Let us give you a sample. We’ll pull a part from the line today, and send it to you tomorrow.” That shows me that they have actual production going at a real factory. Maybe that factory that sent me the sample they bought off the shelves in Wal-Mart, perhaps if I gave them my deposit that would be enough for them to set up a factory. And dreams can come true, they’ll build the factory on my order. Maybe. It has happened. But I don't want to be the guinea pig that they’re building a factory around my order. Too many things can go wrong. So don't be a guinea pig. Confirm the factory actually makes this.
Previous articles from our Middlemen series (production experience) ...
Look for clear information to identify production experience!
Look for clear information about things like operation, number of employees, what type of equipment. When you’re dealing with someone that “says” they’re the factory, you ask them a question like this:
“What type of equipment do you have on the production line? They say, “metal stamping machines.” “When were the metal stamping machines purchased? What they are they? Are they Taiwanese? Japanese? Were they made in China? How many hits can you get in a minute? How many times does the stamping machine go up and down? What type of tonnage? What’s the thickness of the metal that you can use in your machines?” Is the so-called “owner” of the factory is “Hmmm, I need some time to get back to you... I'm not sure.” Most likely they’re a trading company. The owner of the factory will know all those things in detail. “Yes, I purchased this equipment in Taiwan, had to import it. There’s a 30% duty. It was expensive to get it here, but it was well worth it because I can produce 1,000 hits a minute. It’s very efficient.”
More to come soon in our Middlemen series ...
ABL Blog: Sr. Editor and Primary Content Creator: Michael J. Bellamy
Originally from Upstate New York, Mike moved to Asia in 1993 and is a China business advisor to both Fortune 500 companies and small businesses. Recognized as an expert on doing business in China, he has been interviewed by WSJ, CNBC, FT & Bloomberg.
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