Bridging the Gap
There are two major barriers to getting a product made, or even quoted, in China:
1. Low purchase quantity. 250 pieces of a $2.00 item, for example, will not justify a factory’s time and expense to set up and run a product. Most manufacturers in China have small profit margins per part; they make their money by producing in volume. In addition, if a factory’s production schedule is filled with large orders, (which, with China’s economy in overdrive, is often the case) they will be even less likely to quote a small order.
At least one third of the new inquiries we receive are from persons wanting a quote for a production run too small for a factory to look at. Although we could find a factory who might agree to quote it, the chances are high that they will place it in the “when we don’t have anything else to do” file, which means a long wait. Even if they do quote the project, there is always the risk that the factory might not pay attention to detail, and provide a poor quality product. You want a factory who’s interested in doing their best to make your product on time, not one that’s barely in the game.
2. Not enough information. Manufacturers need to know all dimensions, tolerances, material callouts, and finish and packaging requirements for the parts they make. Asking them to go off a picture and/or a diagram with few to no specifications is like asking a girl out on a date but not saying when or where you will pick her up. Not providing enough details is risky. Without written tolerances, for example, a factory has the liberty to make your product to the dimensions that works for them. If you’re product is a stuffed doll this will be okay, but if multiple parts are involved and/or the product is meant to assemble to another… or function in a certain manner… now we’re playing Russian roulette with two bullets in the chamber.
What low purchase quantities and less than sufficient information often means is that a customer is not yet ready to go to production with their product line. A little more time spent in developing or engineering the product may be needed, in addition to further market research.
To bridge the gap between the time you’re ready to make a high volume production run and when you’re first developing or marketing your product, it’s best to have a short run production company make a small quantity of parts first. This will help you refine the product and do market research without the risk of running thousands of parts.
If you don’t know of a short run production company, we have options available for you. Email me for more information.
Much of China’s manufacturing base, especially its high tech industries, is located near the eastern coastline. In years past, jobs at the inland provinces paid less than those of companies that were located on the coast of China, which provided an incentive for many to make the move eastward.
Recently, this paradigm has changed. Employers in the inland provinces have adjusted their salaries upwards, leaving manufacturers on the coast, many who are running at full capacity and in need of more help, in a bind. Absent the ability to expand their operations, factories are finding it harder to deliver on time.
When placing orders, I suggest that you allow for additional production time in order to be safe.
“When I decided to have my product manufactured overseas, I started by contacting manufacturers directly via the web. The responses I received were few and far between, and the communication was poor, to say the least. After several months of receiving the run-around from several manufacturers, I had all but given up on my hopes of bringing my idea to market. After some research I came upon the Global Trade Specialists site, and sent off an e-mail inquiring about having my product manufactured overseas. I received an immediate reply, and Mike walked me through every step of the process in a way that made it seem “too easy”. Even though my first order was a small one, the service and attention that I received was above and beyond what I expected. I am still astounded at how easy GTS made the manufacturing process. My only regret is that I did not find Global Trade Specialists in the earlier stages; I look forward to a continuing relationship with GTS.”
John B, owner, supplier/importer of custom tires
You can read more testimonials here.
The Exchange Rate
Yuan to the dollar, as of today: 6.59 to 1
Rate when the Yuan was depegged from the dollar on June 19 of this year: 6.82 to 1
Change: .23 (3.3%)
Note: China strengthened the Yuan .4% this week alone, undoubtedly due to Chinese president Hu Jintao’s visit to the U.S. next week. The exchange rate will surely be a topic of discussion during his visit.
Since 1991, Global Trade Specialists, Inc. has helped companies of all sizes get their products made in China from manufacturers of quality products. We are an American company who works with three trading groups in China with immediate access to thousands of manufacturing companies. We source most products made from metal, plastic, wood, stone, glass or textiles; from prototype to production. Many of our customers are first time importers; we walk you through the entire process.
Read testimonials from some of our customers.
Email us for a free quote.