China Trade Shows Part 2: What to ask the suppliers you meet
By Peter Zapf
VP Community Development, Global Sources
Part 1 discussed easy it is to visit Hong Kong which is where Global Sources holds its China Sourcing Fairs. Part 2 covers what you can expect to see when attending one of these shows, along with points you may consider discussing with the suppliers.
China Trade Shows
If you need to source products from China and want to meet suppliers face-to-face, the best way to do this is at China trade shows. Global Sources hosts China Sourcing Fairs every April and October, with four shows coming up this October. Three China Souring Fair shows will be held October 12-15, 2007 including:
- Electronics & Components with Consumer Electronics, Digital Entertainment, In-car electronics, Computer & Networking, WiFi & VoIP Products, Health & Personal Care Electronics, Security & Safety, Electronic Components, Power Supplies & much more.
- Fashion Accessories show will have (hand bags, fashion jewelry, belts, hats, footwear, sunglasses) and
- UnderWear & Swimwear show with under wear, swimwear and models.
The next China Sourcing Fair will be held 20-23 October 2007, the:
- Gifts and Home Products with gifts, premiums, kitchen & household products, home décor, glassware, basketware, garden & outdoor products, stationery, sports & leisure
Each set of show dates will have several thousand booths of suppliers exhibiting their products. You’ll be able to walk the show floor, stopping at every booth that has products you’re interested in. You can touch, feel and look at the products, and also ask the suppliers all the questions you have in order to qualify whether they are right for you.
Preparing for the show: know your requirements
If you’re looking to source a specific product (rather than browsing for ideas) prepare by writing all your requirements before going to the show, especially your product requirements. Use this as a source of questions you’ll ask the suppliers you speak with. Getting these documented also provides you a source of information to include as an attachment to the purchase order or contract you ultimately place with the supplier.
Questions to consider asking the suppliers
You see an interesting product, now what? Being face-to-face with the supplier, you’ve now got an excellent opportunity to find out if this is the supplier that will meet your requirements. Whether at a China trade show, or another trade shows, areas you’ll want to discuss with the supplier include:
- Price: What is the price, FOB Hong Kong (this means the supplier pays to get the goods to the Hong Kong port). Often the supplier will tell you the price per unit if you order 1 container worth of the product. This may be more than you need.
- Quantity: What is your minimum order quantity or can I start with a smaller trial order? A smaller order quantity will result in a higher price per unit.
- Payment terms: Pretty common is 30% at time of placing the order and 70% when the product ships from the supplier, but this can be negotiable.
- Lead time: How long does it take from when I place the purchase order until you have the goods delivered to the Hong Kong port? There are sometimes delays, so don’t bet your business on an on-time delivery.
- Customization: Can you customize to my needs? Are OEM services available?
- Packaging Requirements: How do you want your products packaged? Do you wants special artwork on either the inner or outer cartons? Is an instruction manual required?
- References: Do you have customers in the U.S. and how long have you been exporting to them? Can you tell me who they are? It is helpful if the supplier has experience exporting to your market; although it’s ultimately the importer’s responsibility, the supplier will be more familiar with any issues that may exist for a particular product.
- Certification/Regulatory Approvals: Do you have the necessary certifications or regulatory approval for this product in my country? Is it current? Again, as the importer, it is your responsibility (not the suppliers’) to make sure all legal requirements are met. Do your homework on this one.
- Quality Assurance / Quality Control: How do you ensure Quality? What steps do you take to ensure the quality of the product? What experience do you have with third party quality assurance? Can I provide specific product inspection criteria? In addition to talking about inspections at the end of the process, you may listen to see if the supplier also talks about continuous improvement of manufacturing processes in order to reduce future quality problems.
- Production updates / Quality Monitoring: Can you, the importer, get regular updates on the status of production, including photos of raw materials, components or parts, etc. If you want such updates, include them as terms and conditions in your purchase order and go over the terms and conditions one by one with the supplier.
- Factory or Trading company: You want to know which the supplier is; each has advantages, but if you want a product or packaging changed or the quality control process changed, a trading company may have less ability to control these changes. If you want smaller quantities or someone to interface with the manufacturer on your behalf, a trading company can be very helpful. In general, the wider the range of products displayed at the show, the more likely the company is a trading company.
- Visiting the factory: If you find one or two suppliers that you are really interested in, you may ask to visit their factory. This will likely entail a trip into mainland China, where English is not widely spoken, so plan this well. Among other things, U.S. citizens do need a Visa to enter China (although not Hong Kong).
- Export License: Mainland Chinese companies can only export if they have an export license. Sometimes the factory doesn’t, and they go through an import/export company in order to export. This can somewhat complicate the transaction by adding another party; ask the supplier how he’ll handle this.
Placing your order
You can, in fact, place an order while at the show. Many global buyers come to China trade shows and meet with the suppliers they’ve been doing business with for many years, placing their entire season’s orders at the booth on the show floor. Someone new to sourcing from China probably doesn’t want to take this big a step; instead he’ll likely start by requesting several suppliers send samples after the show (often paying for the samples and their shipping). If the samples meet your requirements, you can start with a small trial order. The trial order mitigates the risk of a big order not meeting your needs. You may also consider hiring a third party inspection company to inspect product after it has been manufactured but before it ships.
Do also take advantage of the buyers that are at the show – talk to the buyers in the booth of the supplier you’re visiting and see which ones have done business with that supplier and get their feedback. Talk to other buyers at the show to learn more about importing from China. This networking itself is a free educational opportunity and can be invaluable.
Valuable information on how to source products via conferences
In addition to meeting with the suppliers, the China Sourcing Fair shows a free conference program Buying From China: What New Buyers Need to Know. See the China Sourcing Fairs web site for details on times and dates. Getting started is half the battle and these conference sessions may help you get moving in the right direction.
Year round sourcing
If you’re not able to go to Hong Kong for the China Sourcing Fair in October or April, you can also use the Global Sources website (www.globalsources.com) year-round to find suppliers, many of whom are also at the shows. The Global Sources online directory lists a wide range of products from china manufacturers and suppliers, including ATVs, digital photo frames and hand bags – all from companies Global Sources has physically visited three or more times to verify they are real companies. Alternatively, if dealing with suppliers and the import process seems daunting, you go online and purchase small lots of product direct from China on the Global Sources Direct web site.
Although it’s not difficult to get started importing, importing is a serious matter. As the importer, you are responsible for ensuring that products you import into your country meet your countries regulations, in addition to your own product requirements. If you need more information about importing into the U.S. you can prepare by checking out the U.S. Customs website or check on the World Customs Organization site under customs web sites for information from other country’s customs departments.
Whether through trade shows, online web sites, or magazines, there are plenty of resources that can help you get started with the import process. You start the process of expanding your China supplier base by registering to attend the next China Sourcing Fairs.