Freelance translator/interpreter from English to Chinese, self-employed business guide, helper, technician, engineer, inspector in Shenzhen, China
Friday, May 11, 2012
Business coordinator/guide/consultant/agent in Shenzhen China
What are the business models in China?
Here are some information provided by a local consultant who is very experienced in international trade.
There are many suppliers on Alibaba, however you don’t know whether there are manufacturers or not, maybe they are traders, you just don’t know, how do you tell a manufacturer from a trader?
Here is a simple tip, look at their address, if it is located in the city area such as Futian, Luohu and Nanshan district, and they don’t have any other detailed address, most of the time, they are just traders, as the factories can’t be located in the urban area, sometimes some suppliers claim that they are manufacturers and even put both their office and factory address on the website, however their factory addresses are either not detailed, or do not exist at all, you can’t find it at all.
So you might want to tell your friends that they are liars, you can do that, however, I would say this is a very popular business model in China, as you know it is quite expensive to run a factory with those production lines, SMT machines, injection machines and employment of so many people, and it is not so easy to fulfill the capability of a factory unless you can give them some very big orders such as 30K to 100K sets per month. Because of reasons listed, the factories will try to get orders from different sources, such as the local traders. And the traders need to partnership with these factories too, in fact, they act as the factories’ sales departments.
Some people want to be self-employed, because they don’t want to work in any company, so they set up a company with a HSBC bank account, and they pay to be a member on Alibaba, from where they can get a lot of inquiries, and they claim that they are the manufacturers which they are not but partnership with them.
Saturday, March 31, 2012
Why do you have to find the manufacturers?
Some overseas buyers always want to find the manufacturers, they don't want to go through those trading companies, they think if they deal with the manufacturers directly, they can save money. However, in some cases, you will lose money and get worse services if you deal with the manufacturers directly. If you really want to deal with the manufacturers, and you also don't want to go through the trading companies, why don't you hire a trading agent who know your language and manufacturing process. This is a good website for you to find a trading agent as most of the freelance interpreters here speak good English, and they know the international trading process, they can be your business guides and consultants.
1. Some big manufacturers will have their marketing and sales team, they attend all the big trade shows, they don't advertise so much online, because they think the serious and big buyers will attend the trade shows as well, the customers that they get from the internet are mostly small "fishes", and they don't treat these small fishes very well, sometimes they just ignore their emails, if you are a small fish, when you place the orders to them, the delivery time can be very long.
2, Small to Medium size of factories and the trading companies like to advertise a lot online, they spend 2 to 10 thousands USD on Alibaba, Made-in-China and Global Sources, just to be members, and spend time and human resource to update their product and answer inquiries.
3. Some small manufacturers can't afford to be a member on these international website, they spend 400USD to 1000USD on the local Alibaba, and they can't afford to hire someone who speak English, they do not have an export license, so they have problem in selling product overseas directly, they have to reply on the trading companies.
You might remember the German philosopher Hegel's saying, trading companies have their reasons to exist, and sometimes they are very professional, they provide very good services, they are good for certain types of customers, they get paid just because they add value to your transation.
Saturday, December 31, 2011
Business Negotiation
How do you negotiate with your China suppliers?

First of all you need to know your supplier’s status or capability, you might want to ask the following questions:
1, how many employee do you hire, and ask them to give you details on the numbers of labors, technician, engineers, sales and management people.
2, how big does your factory cover, they will tell you in square meters.
3, what is your monthly production capability, they will probably ask for your order quantity, then you will need to ask what is your deliver lead.
4, what is your complaint rate or defective rate, and what is your warranty policy.
5, what is your MOQ (Minimum Order Quantity)? If I purchase more, what is the discount?
6, How good is your product quality, can I send someone to do inspection before container loading? If you would like to hire someone to do the inspection, no matter what kind of inspector will conduct the inspection, as long as they know that someone will do inspection, the factory needs to make sure the products pass the standards.
7, what is your payment terms, can I pay you with 100% L/C at sight? They will prefer to do T/T for the fist 3 transaction.
8, what is the percentage of your domestic market sales, what countries are your oversea markets? Do you have customers in our country.
9, Based on the condition above, what is the cost per unit?
Secondly, you need to make sure that their month capability fits your order quantity, this is very important.
Copy from http://www.interpretershenzhen.com/business-negotiation