Basic Guide to Importing From China

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Basic Guide to Importing From China

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Basic Guide to Importing From China

  1. 1. Importing From China Wensheng Li, MBA, CPSM, CQA Andrew Rizzo 1/30/2015 1
  2. 2. Agenda • Opportunities and Challenges • How to Get Started • Finding Reliable Suppliers • Strengthening the Supplier Relationship • Minimizing risk • Q & A 1/30/2015 2
  3. 3. Opportunities & Challenges The Success Stories • iPhone & iPod • Nike • Laptops and more The Horror Stories • Toys with lead paint • Unsafe tires • Tainted pet food, toothpaste … 1/30/2015 3
  4. 4. Getting Started • Self assessment – Budget – Import volume projections – International trade expertise – Language skills – Product assessment • Get help! 1/30/2015 4
  5. 5. Product Assessment 1/30/2015 5 Critical Strategic Non-critical Leverage Value Risk
  6. 6. What Strategy to Take? • Indirect – Trading company/Intermediary • Direct – Deal with factory directly • Hybrid 1/30/2015 6
  7. 7. Direct vs. Indirect 1/30/2015 7 Find substitution Direct Partnership Indirect Indirect / Direct Value Risk
  8. 8. Identify Suppliers • Alibaba.com, Globalsources.com, … • Trade shows • Industry clusters • Referrals & contacts 1/30/2015 8
  9. 9. Four Types of Suppliers 1/30/2015 9 Domestic with int’l experience Domestic with no int’l experience Trading company Foreign invested Price
  10. 10. 1/30/2015 10 Yangzi River Delta 1% vs. 18.8% Beijing-Tianjing Hebei Region Pearl River Delta 0.4% vs. 10.2% Industry Clusters National Bureau of Statistics 2006
  11. 11. Evaluate Suppliers • Past performance • Capacity • Time in business • Financial factors • Service • Price (total cost analysis) • International experience (CPSIA, ROHS) 1/30/2015 11
  12. 12. Total Cost Analysis Before transaction Trade show Supplier evaluation Negotiation Extra charges or VAT? During transaction Price Order placement Delivery / Freight Inspection After transaction Rejects Damages Re-work 1/30/2015 12
  13. 13. Minimize Your Risk • Develop a good supplier relationship • Quality control 1/30/2015 13
  14. 14. A Good Supplier Relationship is an Investment in your Success • Face to face meetings • Top management involvement • Timely payment • Incentive program • Get feedback from your supplier • Educate your supplier • Learn to say ‘ni hao’ 1/30/2015 14
  15. 15. Deal With Quality Before production During production After Production 1/30/2015 15 Detailed specifications Production sample Packaging details Contract Foot on factory floor Inline inspection Subcontracting?? 3 Party Quality Control Inspection Cha Bu Duo??
  16. 16. Completing The Transaction • Freight • Payment • Customs clearance 1/30/2015 16
  17. 17. Conclusion • It’s easy to find a supplier but it takes effort to find a good supplier. • Do your home work and plan well. • There is no substitution for face to face meeting. • Quality is ultimately buyers’ responsibility. 1/30/2015 17
  18. 18. 1/30/2015 18 Contact: Wensheng Li www.linkedin.com/in/wenshengli

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