More from the GLobal Sources Trade Show in Hong Kong
More questions from the Global Sources Q&A sessions in Hong Kong this week.How do you know in if you are working with a trading company and what value do they really provide?1. Your relationship with any middle man should work to get you the best possible quality product. For example, as a production manager, If I ship to you and you don’t like it—I eat it. It is in my financial best interest to ship you only approved/quality products. This is an invaluable service that you will not get from a factory, a buyer or anyone else (other than you doing the local work yourself).2. Your trading company should tell you up front who they are, who pays them and what their relationships with the various factories are. You should never have to wonder if you are working with a trading company if you thought you were working directly with a factory.If you are paying for introductions only, it may be be of much value. Unless, of course, you can't come here yourself.A couple of oft forgotten things that will affect your price in China.1. QC and testing will/should take about 3% of the price of the product.2. Shipping will average about 25% to 30% of landed costs (assumes sea, not air freight).Some Common Issues with Chinese Factories, via BV.1. 75% of Chinese factories have issues with correct wage payments and overtime payments. This gets bigger each year as the international community gets more and more involved in the production process.2. 15% of Chinese factories with child labor; usually 13-15 years old on “part time” work. Relatively speaking, this is not as big a problem in China as is the unpaid overtime issue.