When it comes to outsourcing, many businesses turn to China for their help. China is the most sought after manufacturing hub due to its state-of-art technology and low labour costs. Depending on the nature of your business, you can either opt for an Original Design Manufacturer (ODM) or an Original Equipment Manufacturer (OEM).
ODM v/s OEM Manufacturers
If this is your first time working with Chinese suppliers, there might be a lot of questions in your mind. There are certain criteria that you need to keep in mind when it comes to choosing suppliers in China. First and foremost is your budget. Second, are you looking for suppliers to make custom products from China? If yes, there where do I find them?
OEM refers to companies whose products are used as components in the products of other companies. ODM, on the other hand, refers to companies that design and manufacture their products, which are then sold to other companies who re-brand and market them as their own.
It is natural to get confused between ODM and OEM manufacturers when it comes to sourcing your products. So, what is the difference between the two, and which one is right for you? The major difference lies in product development.
If you are hard-pressed on budget, you can opt for ODM wherein you can create new product designs, thus saving you from investing a bomb for research and development. OEM suppliers are much more suited for companies that are working on existing product designs or concepts.
Now, that you are clear on which manufacturers to get hold of for your custom products from China, the next step is where to find credible ones. Well, there are many online sourcing resources such as Alibaba or Made in China that offer a list of genuine Chinese manufacturers to choose from.
If you feel that you would not do justice in finding the right suppliers for your products, you can always hire sourcing agents to do the homework for you. These people, through their networks, will get to the best suppliers as per your requirements. Also, since they are fluent in Mandarin, they can help you get good discounts on your projects.
If you are still wondering why to depend on china for your sourcing needs, then the below reasons are sure to help make up your mind:
- China has a huge supplier base in various geographical areas
- They have suppliers for all types of industries
- They are popular for their CAD designs and technologies
- You can be assured of good quality products at reduced costs
- You can work with reduced MOQ if you opt for ODM suppliers
Working with Credible Chinese Manufacturers
Chinese manufacturers for your products can either be trading companies or a factory. There is a thin line of difference between the two. It is always better to research both these companies and decide on the one that best suits your requirement.
Trading companies do not produce the products. Instead, they source from a variety of factories and sell to other companies. The benefit of working with these companies is that you will be able to get good-quality products provided you work with credible companies.
The downside to this is that they will charge you a higher rate after adding their margin. These companies are good if you are looking at a small volume of products.
A factory is a place that manufactures a variety of products. They have the essential equipment and tools to design the product and warehouses to store them. Of course, these might not apply to all factories.
When compared to trading companies, you have more control over your products as you are dealing directly with the factory. The downside to this is, many factories have a standard MOQ, which might not be feasible for some businesses.
Searching for manufacturers for your custom products from China can be overwhelming. Here is where sourcing agents can make the job easier for you. Depending on the sourcing agent you hire and how much you pay them, they will also look into quality control and help in clearing customs for your products.
Now, before you jump the gun and go searching for Chinese manufacturers, you need to ramp up your game and be clear with your strategy. The below pointers might be of help:
- Ensure that you are clear on your product specifications, dimensions, materials to be used, and design
- Be educated about the Chinese market and the latest trends
- Studying the Chinese business culture will help you build a rapport with the manufacturers
- Take your time visiting various factories and warehouses to get an insight into their work environments
- Do not take the manufacturers at face value. Make use of your negotiation skills
- Be sure to ask for samples or references of their works
- Ask for the necessary certifications or licenses
In addition to online sourcing platforms, you can even find reliable Chinese manufacturers through trade shows and exhibitions. The Canton Fair is one of the most comprehensive trade shows in China wherein you can meet genuine manufacturers face-to-face and learn about the services they offer.
When it comes to signing the dotted line on the contract, ensure to have it vetted by Chinese lawyers. Ensure that the contract has all the terms and conditions, along with your product requirements and payment terms in it.
Chinese manufacturers might not be comfortable working with foreign companies. Here is where your sourcing agent can help make them feel comfortable and help in building trust here. If you are unsure about the quality of your custom products from China, you can always give them small orders to work on.
If you are satisfied with the quality, then you can gradually increase the MOQ which in turn will help in improving the bond between you and your manufacturers.
Working with the right Chinese manufacturers can be a cumbersome process as it requires time and patience from your side. Equipped with the right knowledge and what you are looking for in your manufacturers can help make the task easier without compromising on the quality of your products.