When you plan to start a business, your first doubt is whether to outsource the product or start your manufacturing plant. If you have funds to invest you can think of opening your factory, but beginners often plan to outsource products.
China is considered the cheapest outsourcing country. This is because the labour cost in China is way too low. However, often people have a perception that products “Made in China” don’t last for long. With this perception, major buyers are sceptical about the products they receive from China manufacturing agents.
The manufacturing industry has undergone significant changes over the past few years. There is such a wide selection of suppliers from around the world that it gets difficult to choose from. Due to this, many of us immediately focus on whether or not to choose a manufacturing agent overseas.
Most China manufacturing agents are available online on Alibaba, Global Source, but their authenticity cannot be guaranteed. Most buyers hire a sourcing agent or prefer to inspect the warehouse on their own. This helps them identify if the manufacturer is capable of handle their requirements.
The success rate increases when you are sure that you have your hands on the right manufacturing agents. This can be assured only after asking certain questions to the supplier before signing a contract. Both sides should be able to enjoy good times and suffer through bad ones. Any healthy relationship ultimately revolves around communication.
Of course, you want your attorneys to carefully review any deal. Legal agreements, however, are for when a business partnership has faltered. Signing a contract is the last resort when everything matches your expectations. This can be done only after verifying whether the Chinese supplier is on par with your expectations.
Here is the list of questions that you may ask your manufacturing agent to ensure their capabilities –
Questions To Ask Manufacturing Agent
What is the MOQ along with the cost?
The term MOQ stands for Minimum Order Amount. It is the smallest quantities of goods or units that China Manufacturing agents will accept as orders. The minimum order quantity (MOQ) can usually be negotiated depending on the materials, colour, size, and other criteria. However, the manufacturer may not work with you if your order is much lower than the standard MOQ.
Another justification for changing the MOQ is the price of raw materials. For instance, the price of certain products increases just before the holidays, resulting in a higher MOQ. Therefore, before the Chinese national holidays, you should confirm the MOQ and thereby the accurate valuation.
What is the lead time and how do you manage any delays in manufacturing?
Time is one of the biggest problems with outsourcing products from overseas. Customers generally lack patience and if they have to wait for a product for a long time, they will stop buying from that Chinese manufacturing agent. They know suppliers are abundant online.
As a business owner, you do your best to please the customers by offering high-quality goods as quickly as possible. In this situation, one must be forced to raise order frequency in addition to wanting to be sure that the China Manufacturing agents will fulfil the order on time, especially during occasions like the Chinese New Year, when most staff will be on leave for a while.
What are the Payment Clauses?
Getting proper details about payment methods and criteria is the key to smooth sailing. Western companies often face language problems with China manufacturing agents. What you convey may not be understandable to them. Hence, in the end, everything that happens is due to the language barrier.
The major problem arises when it is about payment. Therefore, it is wise to get everything sorted in a written document. Many manufacturing agents in China want advance fees before or after you place the order. Or sometimes some manufacturers deny sending the product unless they don’t receive complete payment. Thus, it is wise to get every detail of the payment plan, and method sorted before diving into this field.
Since we know communication is the major barrier with Chinese manufacturing agents, it is wise to bridge the gap by hiring a sourcing agent. However, you cannot trust any sourcing agent blindly. Often many companies claim to be good and reliable sourcing agents, but they end u as scammers who get you vendors and business, but their products are not at par.
Therefore, even when hiring a sourcing agent to relieve yourself from stress, you still need to ask a few questions from these agents to ensure your business is in the right hands –
Questions to Ask Sourcing Agent
Are you specialised in a certain product category?
A good China sourcing agent who is knowledgeable about sourcing electronic goods would differ from one who is specialised in sourcing plastic toys because the examination process is somewhat different. Ideally, you can identify a sourcing agent who is specialised in sourcing the goods that you’re looking for.
Can you provide referrals of customers who have done business with you?
A good sourcing agent will have many satisfied clients and be delighted to provide you with good referrals for contact. Therefore, this will help you identify what this sourcing agent does to inspect the goods or be fantastic with communication. Therefore, ask the sourcing agent if they would be prepared to provide you with a referral or reference customer contact.
Do you do the quality inspection yourself, or will a third party be hired to do it?
The reason you want to bring up this issue is that some sourcing agents only do sourcing, they don’t perform any inspections, so you have to hire a third party to travel outside to do the inspection, which costs extra money and requires additional work. It is better to find out if the sourcing agent performs the inspection or not.
Finding a good sourcing agent is as important as finding a good China manufacturing agent. Do proper research and show patience while choosing an agent. Rash decisions will always lead to heavy losses.