Click on a question below to go directly to the corresponding answer:
- Can CPG help me with my buying program?
- What products are ideal for sourcing in China?
- What volume of business is required for importing from China?
- What savings can I expect from sourcing in China?
- What is the best approach to China sourcing?
- What is the direct approach?
- What is the agent approach?
- What is a full service provider?
- What happens if defective merchandise arrives at my warehouse?
- How do I avoid defective goods and poor quality after I place my order?
- Should I still consider China as a source if I am concerned about China’s reputation for unreliable products?
- How do you charge for your services?
- Why should I pay for samples when I can get free samples from Alibaba or another B2B website?
- What is the difference between CPG and vendors on B2B websites such as Alibaba?
- How does CPG secure the best available price?
- What does CPG do for its customers?
- How many clients/customers do you have?
- What size companies do you work with?
Q: Can CPG help me with my buying program?
A: Yes, CPG has a wide range of sourcing related services. CPG services are especially valuable for (a) established import companies who have existing purchasing programs and a lot of experience in China sourcing and who seek better control over their sources; (b) importers who use agents and who prefer to deal directly with factories and (c) new importers who have a clear understanding of their needs. The services are designed to provide direct access to the most competitive Chinese manufacturers and manage the follow-up of orders placed.
Q: What products are ideal for sourcing in China?
A: Products that have:
– High Labor Content
– High quality/labor ratio
– Sufficient value to justify shipping costs
Q: What volume of business is required for importing from China?
A: Sufficient volume to justify the effort. Obviously the larger the volume, the more it makes sense to buy direct from China since the savings are compounded. But in some cases you may even consider small orders. How small of an order is worth importing depends on a number of factors.
– Freight: For small orders this will be a significant cost.
(Example: Less than a container load for sea freight will cost more than a full container.)
– Mold costs: A small order may not be justified if there are large fixed costs.
– Cooperation: Factories prefer large orders and may not be willing to work with small orders and if they are, their pricing will generally be higher.
Q: What savings can I expect from sourcing in China?
A: Savings usually depend on the product but generally savings are:
– Production costs: 20% to 50% savings
– Tooling costs: Over 50% savings
– Every intermediary step: 10% to 15% savings per step
Q: What is the best approach to China sourcing
A: The best approach to sourcing in China depends on your specific needs. There are three approaches one should consider:
– The direct approach
– The agent approach
– The full service provider
Q: What is the direct approach?
A: The direct approach is to have one’s own staff on site supervising production directly with the factory. This is the best way to insure that your standards are understood and your quality control concerns are implemented. This approach requires having your own sourcing and quality control operations in China with Chinese speakers that can communicate directly with the factories.
Q: What is the agent approach?
A: An agent will have offices in the USA, in China or in Hong Kong and can easily communicate in English. They will be a specialist in the product that you seek and will have established relationships with various Chinese manufacturers in that product family. Their expertise facilitates your sourcing program. However, their allegiance is primarily to the factories and not to you, the buyer. If a factory fails to meet your specifications, an agent cannot easily change factories.
Q: What is a full service provider?
A: A full service provider is a service company representing the buyer in China and providing services based on their needs. The service provider should have the following attributes:
– Experienced staff in the USA to understand your needs
– Offices in the same time zone as yours (such as in the USA) as well as in China (not just in Hong Kong)
– Native Chinese sourcing specialists in China
– Access to hundreds of factories and allegiances to none of them
– A quality assurance program
– Logistics support for shipping, customs clearance, and warehousing
– An understanding of trade finance to facilitate payment terms
– Good communications capabilities both in English and Chinese
– Ability to quote landed prices if required
Q: What happens if defective merchandise arrives at my warehouse?
A: If this happens, you will find it very difficult to get your money back under the direct approach because it means the goods went through your own quality control and passed. With an agent or a full service provider, you generally have recourse and can get a credit on future orders to remedy the situation.
Q: How do I avoid defective goods and poor quality after I place my order?
A: The key to avoid poor quality and defective products is prevention.
Implementing the following will guarantee success every time:
(a) You understand your own quality needs down to the smallest details
(b) The factory fully understands your quality criteria and is willing, able and experienced to deliver goods as per your requirements.
(c) You have a quality control program in place that is followed through by all parties involved.
Q: Should I still consider China as a source if I am concerned about China’s reputation for unreliable products?
A: Of course you should. There is no such thing as “China” as a source. Instead you have a large number of Chinese factories, many of which are run by entrepreneurs who want your continuing business. Make sure your quality concerns are clear and understood by all parties and make sure there is supervision in the process. Then you will get the quality that you ordered.
Q: How do you charge for your services?
A: We act on your behalf in China to secure your goals, objectives and protect your interests. We are considered consultants and provide services and strategy to make your project a success.
We charge fees in different ways depending on our customer’s needs and requirements:
– For preliminary sourcing projects, we charge a specific, mutually agreeable fee for a well-defined job.
– For sourcing programs, we charge a monthly commitment fee which is deductible from a commission. The fee depends on the resources we need to allocate to the project, the commission amount depends on the complexity of the job.
– For supply chain management: We charge for time spent on our customer’s behalf based on a pre-agreed upon schedule of activities and fees.
Q: Why should I pay for samples when I can get free samples from Alibaba or another B2B website?
A: When paying for a sample through CPG, you are paying the direct cost of the sample to the factory. CPG never profits from a sample cost.
Agents on Alibaba/B2B websites often provide free samples at first, but you will surely be paying much more than the sample’s cost when placing an order.
Q: What is the difference between CPG and vendors on B2B websites such as Alibaba?
A: The difference between CPG and vendors from Alibaba is that:
– Does not mark up the pricing
– Works for your interests, not those of the factory
– Is not a reseller nor do we represent any factory
– Represents you in dealing with the factory
– Gives you direct access to Chinese manufacturers
– Makes sure that you get the best price/quality ratio for your product
– Makes sure that you have a choice of factories pre-qualified through CPG’s quality control
– Determines quality based on your specifications, not the factories.
Vendors on Alibaba and other B2B websites:
– Often mark up the products from the factory to make a profit.
– Often will not divulge factory information to force you to continue to buy through them.
– Often solely rely on a factory’s quality control for your order.
– Provide no guarantees that the quality of the products they are selling you will match the quality of the sample you provided.
– May provide poor service and follow-up after the order is paid for.
Q: How does CPG secure the best available price?
A: CPG has a network of hundreds of factories which we have had experience working with in the past as well as new competitive and qualified factories. Thus we get the factories to compete for your business by offering up the best price while still maintaining the quality standard.
Q: What does CPG do for its customers?
A: At CPG we firmly believe that to be successful doing business in China you must have someone on the ground managing your China sourcing. We make sure that the product you are buying is exactly what you want, manufactured and packaged to your specifications and shipped on time. That is the service we provide to our clients. The cost-savings of buying direct from a Chinese factory, do not compensate for the risks of paying for the wrong merchandise or receiving goods with major delays.
We make sure your needs are met in a way that would be impossible unless you went to China, visited factories firsthand and locally established your own sourcing program.
Q: How many clients/customers do you have?
A: We have about 50 clients at this time. References are available on request.
See our testimonial page.
Q: What size companies do you work with?
A: We work with companies of all sizes, from entrepreneurs and SMEs to Fortune 500 companies. We like to work with companies with a good growth potential.