Tuesday, August 2, 2011

Finding a Factory

Importers often comment how they are “interested in finding a factory”.   If you are buying promotional products / ad specialty items, are you sure this is your best bet?

It’s an often played-out scenario; the Western buyer tells the eager (and perhaps capable) trade company they are looking for a factory.  It’s like they are Ponce de León, looking for the Fountain of Youth.  In some Indiana Jones-style fashion, they are going to hack through brush with their machetes, scale hazardous peaks and cross the roughest terrain.  At the end of the trek, they encounter this shining factory in the middle of an oasis.

This factory is clean, has cheap prices, certified, approved, has cheap prices, willing, welcoming, fluent in English, has cheap prices, years of doing business in your market (except of course never with your competition)…and did I mention they have cheap prices?

Oh…and their range of capabilities, they can produce in this oasis;  anything from baseball caps, to plastic injected accessories, to tote bags, to ball pen sets, to metallic gifts – all under one roof!

Needless to say, this is a make-believe scenario.  There is no factory that produces that range of items and offers such advantages.  As with any long-term business strategy, especially in China, it takes considerable effort to lay the foundation.  Develop your relationships with factories, no doubt, but relationship development takes time and research.  Most importers (especially distributors) in the promotional product industry are not in a position to invest the necessary chunks of their life into this development.     

Many factories once knowing you are in the promotional product business, hesitate to really solidify the relationship.  The nature of the promotional product beast is; as an importer you are serving your end-user, whether directly or indirectly and the end-user(s) constantly are moving on to different production.  One year they produced backpacks, this year they are doing a wine glass drink set.  It’s constant change and one buyer doesn’t get the opportunity to establish a solid history with one factory.  Here is a brainstorm list of why, from China, wholesale vendors or trade companies better serve the importer. (whatever you want to call them; I’m adverse to the labeling and would prefer we just say “supplier”)
  • You import too large a range of production.  It’s not efficient on your part to find a factory for each project.  Either find a niche area in certain product ranges or collaborate with a solid company to supply your whole gambit. 
  • The factory does not want to work with you.  You demand low price and excellent quality.  In China they call that “Wanting the horse to eat, but you don’t want to feed him”.  You also don’t order enough from this one factory for them to deal with the headaches you give them over your “lofty” expectations.
  • Since you don’t order large volumes of each style of item, the factory is not going care as much about the overall picture as a solid supplier will care.
  • Remember to the actual factory, you are never as big as you think you are. The factory is like a big machine; they’ll accept the order and will quickly want to spit it out, quality being secondary or a way distant third place.  
  • A solid supplier that has a good factory network will control your China business more effectively than you will do from abroad. A solid supplier will watch out every step from sampling, to port delivery; while keeping their eyes on the delivery time. 
If the factory thinks you are too small, they will outsource you to another facility or bump you in the production line.  YES, factories also will outsource you to another facility. 

But there is also a large share of quality companies that you can position for a solid pivot point for your overall production program.

While saying “You Want to Find a Factory” or “I Only Work Factory Direct”, sounds romantic, sounds adventurous, it sounds like you got a leg-up on your competition and get more price breaks than Wal-Mart. 

But, as soon as the factory decides you are not important, and starts playing one of the multitude of games they can play, you’ll wish you had a solid vendor watching your back.

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