Importing From China

Wensheng Li, MBA, CPSM, CQA

Andrew Rizzo

Agenda

• Opportunities and Challenges • How to Get Started• Finding Reliable Suppliers• Strengthening the Supplier Relationship• Minimizing risk • Q & A

Opportunities & ChallengesThe Success Stories• iPhone & iPod• Nike• Laptops and more

The Horror Stories• Toys with lead paint• Unsafe tires• Tainted pet food, toothpaste …

Getting Started

• Self assessment– Budget– Import volume projections– International trade expertise– Language skills– Product assessment

• Get help!

Product Assessment

Critical Strategic

Non-critical Leverage

Value

Ris

k

What Strategy to Take?

• Indirect– Trading company/Intermediary

• Direct– Deal with factory directly

• Hybrid

Direct vs. Indirect

Find substitution Direct

Partnership

Indirect Indirect / Direct

Value

Ris

k

Identify Suppliers

• Alibaba.com, Globalsources.com, …• Trade shows• Industry clusters• Referrals & contacts

Four Types of Suppliers

Domestic with int’l experience

Domestic withno int’l experience

Trading company

Foreign invested

Price

Yangzi River Delta1% vs. 18.8%

Beijing-Tianjing Hebei Region

Pearl River Delta0.4% vs. 10.2%

Industry Clusters

National Bureau of Statistics 2006

Evaluate Suppliers

• Past performance• Capacity• Time in business • Financial factors• Service• Price (total cost analysis)• International experience (CPSIA, ROHS)

Total Cost Analysis

Before transaction

Trade showSupplier evaluation

Negotiation

Extra charges or VAT?

During transaction

Price

Order placement

Delivery / Freight

Inspection

After transaction

Rejects

Damages

Re-work

Minimize Your Risk

• Develop a good supplier relationship• Quality control

A Good Supplier Relationshipis 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’

Deal With Quality

Before production

During production

After Production

Detailed specificationsProduction samplePackaging detailsContract

Foot on factory floor Inline inspectionSubcontracting??3 Party Quality Control

InspectionCha Bu Duo??

Completing The Transaction

• Freight• Payment• Customs clearance

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.

谢谢 !Contact: Wensheng Li

www.linkedin.com/in/wenshengli