China is an exciting tale. For those of us who have observed it for a long time, it is a tremendous success story of human endeavor. It is improbable too: thirty years ago no-one could have predicted such steady and spectacular economic rise. In fact, as far as I know, no one did predict it. And yet, here it is: It has delivered the kind of rags-to-riches story that makes us dream, multiplied again and again in endless, different variations.
For CPG’s customer base of buyers, China presents a great sourcing opportunity. And this for a very good set of reasons: the large majority of Chinese exporters are private companies run by sharp businessmen who are willing to compete hard for your business. They tap into a large pool of inexpensive, intelligent, hard-working people and lean on a sophisticated network of suppliers and a strong infrastructure of transportation, telecommunications and ports that enable them to outbid suppliers from other countries.
The price/quality ratio you can get from China is difficult to beat. And it is going to stay that way for a long time. But just because it is so, does not mean that sourcing from China is easy.
Some people ask me” “What is the difference between “Sourcing” and “Buying”?” My explanation is that, even though in general terms these two words mean the same thing, I prefer “Sourcing”. “Buying” is simply an exchange of money for goods, whereas “sourcing” is a commercial process. Think of it in terms of a river: the source is the beginning of it, just like it is the very beginning of your supply chain.
Taking care of that beginning is important. The work a buyer puts into preparation saves time, effort, money and aggravation down the line. It is especially important to prepare well if you intend to source direct from a factory, as opposed to buying from people who make life easier such as importers, distributors or trading companies. Buying direct from a factory does not only give one a better cost structure, it also gives better control over the product, its quality, packaging and those pesky details that make the difference between good and great.
We at CPG, believe that it is essential for anyone sourcing from China to have an experienced sourcing team in the country. What that team should do for you is covered in a different section of this website, but essentially they should:
- Understand your product in great detail
- Understand your sourcing objectives
- Have the experience and the know-how to execute your plans
Consider this: a good buyer’s agent (do yourself a favor: don’t hire a seller’s agent) can provide much more than an excellent cultural bridge to the factory. They are a key professional sourcing component of your supply chain. They provide you with assurance that your program will develop well; they help ensure that quality matches your requirements; as a team, they are happy to serve and are never sick, or absent; since they live and breathe sourcing in China, they are innovative and creative, they find solutions to problems you did not know existed; and a good agent provides an unbeatable cost to service ratio.
CPG is a people’s business. We owe our success to our people, to their dedication and the quality of their service, to their insight and their invention. We owe our quality to their patience, their understanding and the interface they have with your people and with the people in the factories, in the laboratories, in the shipping business.
We at CPG want to be the premier sourcing service providers in China. This is the kind of ambition that drives us, that makes our life exciting and fun. And our people deliver on this objective every day. We serve with pride big and small companies alike and each happy customer is another stepping stone towards our goal.
We have done this for a long time and we have done it for a large variety of products and industries. China has changed a lot since when we started in 1978. But the rate of change has slowed more in recent years. This means that China is maturing, that most of the systems are in place, that one can plan ahead. Our experience has helped us stay ahead of the curve in the past. It prepares us well for growth during the coming years.
One more thing: many have asked me if it is appropriate for small companies to source direct in China. It is true that it is much easier to source in China if you have large programs. Such programs get the attention of factories and large numbers reduce costs. Years ago small buyers would have fared poorly in China. But times have changed, the world has shrunk and even small buyers can buy direct in China - and considerably reduce their first costs in doing so. China sourcing is a place for beginnings, and at the beginning, all of us were small. So China today can handle small companies – and maybe accelerate their growth. We at CPG are happy to serve big and small companies alike.
If you are reading this, I am going to make the assumption that you are an intelligent business person. The kind that likes to plan, prepare and think ahead. The kind that thinks preparation is the mother of opportunity and prevention is better than cure. If you are that person, then welcome! China is for you. You will do well here.
-Michael De Clercq, President