Do you want to save money on your product packaging costs, while streamlining logistics to keep everything running smoothly and on time?

I'm sure you do.

Just like there are already thousands of businesses that import from China making large and sustainable profits.

But as many of you who have tried to import from China will know, getting it right is easier said than done.

Aside from the challenges of nailing your marketing and branding – which isn’t an easy task – there are countless challenges importers need to overcome.

1.  Why Import from China

Why import from China when it’s without a doubt easier to source products from local suppliers?

Here are three reasons why China is still the best option for most products :

Price

Even when factoring in shipping, quality control and import duties, the saving from purchasing from a Chinese manufacturer is anywhere from 30% to 150% (for most products) compared with manufacturing in the West .

Flexibility

Chinese factories are in general more cooperative, set lower minimum order requirements for mass production, and can produce in larger volumes than what you can find locally.

Competitive advantage

China’s labor costs are more expensive than low-middle income countries in South East Asia, but China’s other advantages (developed infrastructure, established component/raw material supply chains, skilled workforce) make up for it.

Apple CEO Tim Cook explains it best:

“There’s a confusion about China. The popular conception is that companies come to China because of low labor cost.

I’m not sure what part of China they go to, but the truth is China stopped being the low labor cost country many years ago. And that is not the reason to come to China from a supply point of view.

The reason is because of the skill, and the quantity of skill in one location and the type of skill it is.”

Sourcing product packaging from China is one of the best ways for companies to lower costs and simplify distribution. However, many organizations shy away from this option because of lack of knowledge about doing business in China and misconceptions about business practices and product quality in their factories.

2.  How to Import from China

Step 1. Create your product specs

Before you get started on product sourcing, you need to sort out your packaging specifications.

Jumping head-first into sourcing without defining your product specifications is the biggest mistake amateur importers make, and it causes all sorts of problems and miscommunications down the line.

Your spec sheet should include at minimum:

• Product description (Name, Type)
• Specific materials for the product
• Product dimensions
• Product colors (Pantone, CMYK) 
• Special finish
• Testing requirements for your market (Food safety certification, FSC, etc…)
• Label specifications and requirements
• Packing requirements
• Quantity
• Currency for the quotation

Remember that whenever you are verifying suppliers and analyzing quotes, you need to be comparing like-for-like in terms of specifications.

Small differences in materials, type of finish, dimensions, can have a massive impact on the price.

Step 2. Sourcing the right supplier to import from China

When you import from China, there are two ways you can source suppliers :

a.     Import from China directly from Chinese suppliers

The three main platforms for product sourcing in China are Alibaba, Global Sources, and Made in China.

While Alibaba and Made in China have thousands of suppliers for each product, many of the best suppliers in terms of price, quality, export experience and lead times do not advertise their business on these platforms.

b.    Tradeshows in China

The best suppliers prefer trade-shows because it attracts serious importers who buy in volume and understand international trade.

c.     Baidu (China’s Google) and Google

Step 3. How to verify your Chinese suppliers?

Before you choose which factory will manufacture the goods you will import from China, it is crucial to perform a quality check on the best suppliers. When verifying if a supplier is right for you, consider the following questions:

Question #1 – Can the factory produce my product? Do they have experience in this product area?  

Chinese factories tend be say yes to most things. So, when you ask a Chinese factory about whether they can manufacture a product to your requirements, rarely will you get an answer of no!

If you have doubts, ask for evidence to back up any claims made by the factory

Question #2 – Are they a trading company or a manufacturer? 

Trading companies are easy to spot. If they sell many goods across different product categoriesor if they are registered as only having between 1 and 50 employees, they are probably a trading company.

Question #3 – Can you communicate effectively with the manufacturer?

If the factory is bad with communication, you probably don’t want to be dealing with them. Imagine when something goes wrong with an order and you are waiting weeks for an explanation!

Question #4 – Where is the factory located? How will this impact lead times and product cost?

China is a massive country. You need to be buying your product from the right regions.

Question #5 – How big is the factory? Can they manage my order volumes?

There’s no point working with a factory that can’t manage your order volumes. They’ll end up outsourcing the production to another factory (often a worse factory).

Likewise, if you are buying in small quantities, don’t try and buy from a huge Chinese factory as you will not be an important customer to them. Expect to have your order pushed to the back of the line when a big order comes along.

Question #6 – Does the factory have the appropriate certifications for my product?

Unless you want to pay for the test to be done on your product, always work with a factory that has your required test certifications.

A word of caution, many factories will fake these documents. If you are unsure, you can email the test reports to which ever firm conducted the test (usually SGS for printed products) and they will confirm if the reports are fake.

Question #7 – What markets does the factory sell into?

Factories that make products for the domestic market, and markets in the Middle East and Africa, tend to produce at lower quality levels.

Question #8 – Are they a legitimate operating entity? Do they have an export license?

You should avoid suppliers that don’t have an export license. Obviously…

Question #9 – Is their pricing competitive?

If their pricing is nowhere near the mark, then unless you can back yourself in to negotiate down to a workable price point, cross them off the list.

Question #10 – What are their lead times for mass production?

There’s often a big variance in production lead times between manufacturers. If quick lead times are important to your business, then factor this into your product sourcing decisions.

Step 4: Visit the best 3 suppliers (if you can)

The single best way to verify if a supplier is suitable when importing from China is to visit their factory.

By visiting the factory, you can eyeball the equipment, the factory’s capacity, the quality of the factory workers, the sample room and the factor’s internal quality control systems.

It also allows you to negotiate pricing directly with the factory boss.

For established businesses looking to import from China, this step is crucial and should not be skipped!

If you can’t afford the time to travel to China, you should plan for a 3rd party to inspect your list of potential suppliers.

Step 5: Request a sample before you take your final decision

At minimum, I suggest arranging samples from the two best suppliers from your shortlist before importing from China.

Be diligent when you are checking samples from your suppliers. Most people don’t take enough care with the sample checking process.

Pay attention to the look, feel, dimensions, function, performance, and packaging of your product.

If the factory can’t match your requirements, then unless you are willing to compromise on your requirements, the factory is probably unsuitable.

A couple of side points though :

-       It’s common to have samples redone and redeveloped in order to reach your desired outcome. Don’t write-off a factory too quickly if the first sample is not perfect.

-       If you are developing a new product and samples are expensive to produce, it might be impractical to arrange samples from 2 suppliers. Instead focus on the best supplier and arrange a sample with them.

3.  Tips for Import from China

Be Comprehensive About Communications

Remember that China is more than half a day ahead of the US and between 6 and 8 hours ahead of Europe; when you’re eating breakfast in New York, we are ready for dinner. This time differential, combined with a potential language barrier, can make clear and timely communication challenging. Sometimes direct, speedy communication is possible, but planning for a 24-hour timeframe in which to provide or receive important information is a good practice.

Focus on finding a print partner that can provide you timely access to the data you need, and effectively communicate with your team. 

Carefully Evaluate Materials and Factories

Pay attention to both the materials the factory intends to use for your product and which factory you choose. The system for describing paper weight can vary depending on the country, for example, so you’ll want to be sure the company understands your request and their product meets expectations. 

While the reputation of poor quality Chinese goods is largely a relic of the past or a cliché from the present, it never hurts to verify exactly what you’re ordering.

The best printing partners will even be able to offer you advice that may further improve your bottom line; perhaps a particular base substrate or finishing option has a dramatically different local price profile compared to domestic production, for example.

Consult with Structural Engineers and Designers for Creative Finishes

Don’t be afraid to take advantage of us and our expertise.

Find out what materials and finishes we have experience with, and have your contact guide you through a re-evaluation of your entire package design from top to bottom.

Finding a factory that employs a structural engineer (like Shen Chuan Group does) is an added bonus. Sometimes structural or artistic changes can be made to product packaging that improve shelf appeal, and other times small adjustments simplify shipping needs.

At sufficient order volumes (which even small and mid-sized organizations can achieve, if their printing partner is able and willing to extend them warehousing and delayed distribution options), almost all finishing options are very cost efficient in China, which can enable the production of some incredible designs.

Pay Attention to Color Consistency

One final challenge to be aware of is color consistency. Getting a final product to stay consistent with its concepts, designs, and samples is a constant challenge in the print industry. This potential pitfall magnifies in scope if your packaging volume requires the services of multiple facilities.

Finding a partner that can help you accurately translate from RGB values to CYMK for printing, monitoring the colors and then ensuring that the factory’s presses are producing as programmed can be a difficult process. The best way to ensure that this will not become an issue for you is to request physical press samples before production begins, and verify that they meet your expectations.

While there are a variety of challenges associated with shifting the production of your packaging to China, in almost all cases the benefits outweigh the costs. 

The Advantages and Disadvantages of Global Supply Chains

Global supply chains have become highly vulnerable to supply chain disruptions.

Businesses that rely heavily on their global supply chains have struggled in recent times. As a result, they are now looking at several options to shorten their supply chain and reduce the dependence on overseas suppliers.

So, do the disadvantages of a global supply chain outweigh its merits?

In this article, we discuss the benefits and risks of managing a global supply chain.

What is a Global Supply Chain?

A global supply chain is an integrated system of processes, people, technology, and data across multiple countries and organizations. It is a complex network of suppliers, manufacturers, warehouses, distributors, shippers, and customers that are all connected to move products and services from one location to another.

The global supply chain is an ever-evolving system that plays an integral role in the success of businesses worldwide. It involves the coordination of various activities, such as sourcing, manufacturing, logistics, distribution, and customer service, to ensure that goods and services are efficiently and cost-effectively delivered to the right place at the right time.

By leveraging the latest technology and data analytics, businesses with global supply chains can optimize processes, reduce costs, and increase customer satisfaction.

Advantages of a Global Supply Chain

There are several advantages to managing a global supply chain. Here are some of the most common benefits:

1. Lower costs: Global supply chains allow businesses to take advantage of lower costs associated with foreign markets. Companies can source materials from countries with cheaper labor and production costs, resulting in more cost-efficient operations.
2. Increased flexibility: Global supply chains provide companies with the flexibility to quickly adjust their operations to meet customer demand. This allows businesses to respond quickly to changes in the market, such as new product releases or a shift in consumer preferences.
3. Improved quality: By leveraging the latest technology and data analytics, global supply chains can ensure higher levels of quality control. This can result in improved customer satisfaction and loyalty.
4. Greater efficiency: Global supply chains are designed to be efficient and streamlined. By optimizing processes and leveraging technology, businesses can reduce waste and increase productivity.
5. Increased market reach: Global supply chains allow businesses to expand their reach into new markets and tap into new sources of revenue.

Disadvantages of a Global Supply Chain

While there are many advantages to managing a global supply chain, there are also several potential risks and disadvantages. Here are some of the most common disadvantages:

1. Complexity: Global supply chains are complex and involve many different stakeholders. This can result in increased costs and delays.
2. Regulatory risks: Global supply chains must comply with numerous regulations and laws in different countries. This can be challenging to manage and can result in costly fines and penalties.
3. Lack of visibility: The global supply chain involves a number of different stakeholders, and it can be difficult to monitor and track the movement of goods and services. This can lead to delays and inefficiencies.
4. Language and cultural barriers: Global supply chains involve stakeholders from different countries, which can lead to language and cultural barriers. This can make it difficult to effectively communicate, resulting in misunderstandings and inefficiencies.
5. Security risks: Global supply chains are vulnerable to security threats, such as cyberattacks, data breaches, and theft. Companies must be prepared to invest in the right technology and processes to ensure the security of their global supply chains.
6. Costly shipping: Shipping costs can be high when dealing with global supply chains, as goods must be transported across long distances.

Strategies for Managing a Global Supply Chain

To successfully manage a global supply chain, companies must have strategies in place to address the potential risks and challenges. Here are some strategies for successfully managing a global supply chain:

1. Leverage technology: Companies should invest in the right technology to ensure that their global supply chains are efficient and secure. This includes investing in automation, data analytics, and real-time tracking.
2. Develop partnerships: Companies should develop strong partnerships with suppliers, manufacturers, and other stakeholders to ensure that all parties are working together to optimize the global supply chain.
3. Monitor and track: Companies should monitor and track the movement of goods and services to ensure that the global supply chain is running smoothly.
4. Communicate effectively: Companies should ensure that all stakeholders are able to effectively communicate to prevent misunderstandings and inefficiencies.
5. Plan ahead: Companies should plan ahead to anticipate and address potential risks such as regulatory compliance and security threats.

Conclusion

In recent years, the global supply chain has become increasingly complex as businesses strive to remain competitive in the global market.

To maximize the advantages and minimize the risks of managing a global supply chain, businesses must be prepared to invest in the right technology and processes. They must also be aware of the potential risks and have strategies in place to mitigate them.