What are the best goods to import from China? What is the best way to import from China? Do you want to learn how to buy products from China while avoiding the risk of fraud and poor quality? Then this article is for you.
The biggest risk with importing from China is not getting scammed or receiving a container filled with brick stones. It’s the exposure to quality issues. Regardless of whether you are a businessman based in Germany, Ghana, USA, Canada, Australia, South Africa, Nigeria or Japan; your consumer does care about quality, and your years of hard work building a reputation can be ruined by just one bad shipment.
So what is a quality issue? Well, quality concern is not reserved for people with PhD’s and expensive suits, it concerns every business from the smallest street vendor to global corporations. I will give you a few examples of common quality issues that China importers are faced with.
Common Quality Problems Faced When Importing from China
- Damaged items
- Functional defective items
- Wrong items
- Wrong colour
- Cosmetic defects
- Substandard materials
- Substandard components
- Transportation damages
- Substandard product packing
- Sub Standard export packing
The two main causes of quality issues are:
Table of Content
Cause A – Misunderstanding between the supplier and the importer
Many importers assume that the supplier in China will understand that they “require good quality.” The problem is that there is no standardized definition of “good quality” and the idea of “good quality” differs between different people, companies, countries and continents. The quality of a certain product is defined by the sum of its parts; such as the materials and components used to make the product, etc. I will explain this in a comparison chart of a “high quality” and “low quality” wristwatch.
A Comparison Chart of a High Quality Watch and a Low Quality Watch
|Product Specification||High Quality Watch||Low Quality Watch|
|Movement||Citizen IL22 (Made in Japan)||No name (Made in China)|
|Case Material||Stainless Steel||Zinc alloy|
|Strap||Italian Leather (authentic)||PU Leather (plastic)|
|Water Resistance||5 ATM||None|
- For a business that is into low cost products, the “Low Quality Watch” is of course the product of choice. The problem is that the less you know about your product, the harder it is to ensure that it reaches a certain quality level. Thus the key to avoid disastrous misunderstandings is to: a.) Know your quality requirements and product specifications, b.) Communicate these to the supplier.
- Let’s stick to the wristwatch example; If you don’t know that the Case Material is an important quality factor and don’t specify, to the supplier, that you want a certain material, then the supplier will choose for you!
- You cannot compare a “wrist watch” with a “wrist watch”. Instead you compare product specifications – otherwise you can never be sure whether or not you have been quoted a good price. I am sure you wouldn’t want to end up paying 22.5 dollars for a cheap zinc alloy watch.
Cause B – The supplier is cheating the importer quality
Yes, some Chinese suppliers deliberately cheat importers. Since a product is defined by its product specifications, a supplier can simply use cheap and substandard material and components to increase its own profit margins. The supplier is more likely to cheat importers who make one of the following two mistakes listed below.
Common Mistakes Importers Make When Importing From China
1. You don’t communicate clear product specification requirements. When you leave product specifications “open” you invite the supplier to “fill in the gap” with a material or component that is cheap and low quality. (I.e.You forgot to mention that you want a Stainless Steel case so the supplier shipped a bunch of Zinc alloy watches instead.)
2. Even if you are successful in drafting a detailed list of very precise product specifications, this is not worth anything unless you can make the supplier believe that you will follow up on quality.
This one is simple, always tell your supplier that you will check and inspect for quality control on the products in China before you make the final payment. Even if you think a Quality Inspection is too expensive, you can still deceive your supplier into believing that you will make one.
The most important thing here is that the supplier complies with your quality requirements, something that is more likely to happen if they believe that cheating you is too risky.
My 3 Step Plan for Preventing Quality Issues When Importing from China
Step #1 – Understand your product specifications
Now you understand that product specifications are critical to success, but identifying them is not always easy. However, even a beginner can follow the task list below to break down a product into a list of specifications;
- Review the product descriptions of various suppliers on Alibaba.com
- Review the product description on various English e-commerce websites such as Amazon.com
- Review Wikipedia.com for detailed material information
Anything that describes the following shall be included in your list of product specifications:
- Print / Type of print
- Logo / Logo position / Type of logo print
The more information and documentation you have, the more likely you are to get what you order. I also suggest you consider to create more supplier material such as the following:
- Logo design files
- 3D Designs with dimensions
- 2D Designs with dimensions
- Photocopies of existing products
- Physical reference samples
Step #2 – Draft an Agreement
It’s true that Chinese suppliers are not very concerned with honoring agreements in case of a dispute. Instead, an agreement can be used as a tool to communicate the following to the supplier;
- Your product specifications (What you want your product to look like).
- What you will not accept (What you don’t want your product to look like).
- That the supplier should think twice about cheating you (Because you will send an inspector to the factory before shipping).
The 3 main components mentioned above are useless if you don’t have a good bargaining tool. Going to a Chinese court is expensive and time consuming, so instead I suggest you rely on a much simpler mechanical tool such as a; A 2 stage payment plan;
- Deposit payment (30%) before production
- Balance Payment (70%) after quality inspection and completed production
The key is to withhold the final payment until you have confirmed that the supplier actually made what you asked for! As soon as they got all the money, they won’t be as easy to deal with. Remember that Chinese suppliers have very low profit margins (2 – 4%), if they cannot secure the final payment they make a huge loss.
In other words, you can force them to remake or repair your products if you discover a lot of damaged items during the Quality Control as long as the money is in your hand.
Step #3 – Quality Control
A core part of the plan is to verify the quality of the products before they leave the country. However, it’s equally important to make the supplier know that they have something to lose if they try to cheat you, and that is by telling them well in advance that you will inspect the products in China, before they are shipped.
A Quality Inspection is not expensive and costs around US$250 – $300. If you for some reason cannot afford a Quality Inspection, you still have the following option;
- Keep telling your supplier until the final day of production that you will send an inspector. Yes, it’s deception but for a good cause. As long as the supplier believes that they got something to lose by cheating you, they are a lot less likely to try to pull any tricks on you.
- conclusion, i want you to engrave this on your mind that importing from China is risky and not even my strategy can offer a 100% guarantee for success. But by applying this 3 step plan, you can greatly improve your chances and enjoy less defects, lowered risks and better profit margins.
Author’s Bio: Fredrik Grönkvist is the Co-Founder and Limited Partner of http://www.chinaimportal.com, a Shanghai based information services company who provides startups and small businesses with an online system for managing sourcing and production in China and other Asian countries. Connect with Fredrik Grönkvist on Google+