Here at China Plains and in my career, I've met a lot of different companies that want to buy wholesale, (or as I will call it from now on, outsource) from China directly. The ones that get the most benefit from it usually have a few things in common. One of those is being right-sized. Let's call it the Goldilocks scenario:

1. Too Small: If you're starting your business out of your garage, you do not have the time or money resources to work with a China factory directly. Most likely, you do not have the resources to hire a company like China Plains to do it for you either. Furthermore, you're probably not buying product in large enough volume, to achieve low per-unit transportation costs. You can order 100 lamps from a China for cheaper price than you can in the US. But transportation can run in the $5-10 range, per lamp! At lamps, this number would drop to $1-$2. In this case, try to find a domestic wholesaler. Make sure they back their quality by offering free or nearly-free returns. 

2. Too Large: Very large companies, on the other hand, have entire departments or even a China-based office to do their outsourcing. They have in-house resources to make sure they're dealing with reputable factories. More importantly, they have a process to ensure these factories make the product with the right specifications and features, and have adequate QC in place. If your a Fortune 1000 company, you won't need a company like China Plains to do your outsourcing for you. However, we may be able to help with strategic consulting under our Relationship Management services. 

3. Just Right!: If you're in between these sized companies, then you have the resources to make sure your importing partner does a medium to long term project necessary find the best factories, at the best price, and that your product is constructed correctly the first time, with quality assurance procedures that ensure each shipment meets your quality requirements. You are probably ordering at a large enough order volume (1000+ units, $10,000+ order volumes & revenue) to achieve lower transportation costs. Most likely, your company has been doing all or part of the manufacturing and assembly in house. Possibly you are working with a US-based 3rd party for final assembly. Maybe you are already buying direct with China factories for some or all of your components. Perhaps you also have heavily customized parts, or only a single current supplier that can supply those with the specifications you need to make your product work reliably. In all these cases, a good outsourcing partner can offer effective management consulting of your outsourcing process. They can understand your products, find reliable suppliers, and understand the QA processes needed to make sure your product is made correctly. 

Find out more about our services on Outsourcing Management and Product Sourcing, or Contact Us for more information if an outsourcing partner is the right option for you. 

What a good China Wholesaler (referred to as an outsourcing partner from here) can do for you, is to thoroughly understand your products and components. Their representative should have face-to-face meetings with you and your engineers/manufacturing team to ensure this. They should look at any engineering drawings or concept sketches you have. They should ask about any safety requirements your product has (UL specifications, ROHS, IMDS listings, etc). 

A good outsourcing partner will present several factory options to supply your product. Some factories may offer lower MOQs, while others offer lower price. You should have choices to find the right balance for your company. Your outsourcing partner should be able to describe the production methods needed to produce your products. Is it a metal stamped or CNC machined part? Plastic Injection or Extruded? Or Blow-molded? You may not know the answer, but your outsourcing partner needs to know the answer to find the type of factories that specialize in the correct manufacturing process. Our page here explains some of these common manufacturing processes. 

Otherwise, they will probably reach out to a trading company. Intermediaries mean you are not communicating the exact specs of your product with the engineers and managers who actually oversee the production line. It's a recipe for you to pay for and receive a lot of inventory that you can't use. On this point, your outsourcing partner should be willing to let you know who the factory is, their address, and the factory's contact info. They should be able to tell you the registered amount of capital the factory has. This is an amount reported to the Chinese government when any Chinese company incorporates or reorganizes. 

An outsourcing partner will be able to tell you their Quality Assurance procedures. There is more to this than just ensuring inspections are done at the factory. First, they should be hiring an independent 3rd party Inspection company to do a sampling inspection. Second, if the product is customized in any way, an overall factory inspection should be done before any payment for orders are sent. Even if it's a standard, off-the-shelf part, having an overall factory inspection can help prevent receiving unusable inventory. Third, they should insist on a prototype and sample process of your products before any orders are initiated. You may have to pay fees for this process, as many Chinese factories charge for this. Again, this is much more important if its a customized and unique product. 

Other Quality Assurance procedures can include payment terms that ensure the factory won't receive some or all of the payment until the shipment product passes inspection. They should also explain how the designated shipment method and a speedy customs clearance will ensure your product is not damaged enroute. Just having product insurance provided by a transportation carrier is NOT enough! Finally, your outsourcing partner should have had regular calls with not only the factory's sales rep, but also their engineers, and at least one call with the factory owner. Face-to-face meetings are even better, and both of these means there is good communication, and that the factory is reputable. 

Finally, your outsourcing partner should not be rushing a project. To outsource customized parts such as a simple, 2"x2" metal stamped component, requires time. At least 15 days to do a prototype, 20-40 days to make a mold/tooling, and 10 more days to make samples and have them delivered to you. Standard parts won't need prototyping or tooling, but definitely need samples to ensure the China factories product is the same as your current product. Production lead times can be as short as 10 days, but could take up to 40 days if there are many orders ahead of yours. Transport by air will take at least 2 weeks, as export & import customs clearance, and staging at the airport warehouse takes more time than the actual flight. Ocean Transportation from a Chinese factory dock to your dock will take about 20 days if you're located on the US west coast, 30 days for the US east coast, or 40+ days for inland US destinations. 

You can find out more about how Outsourcing Management works here.