How do I find manufacturers in China? BANK ON DAVE replies

I want to start a business that most likely requires the products, which will be plastic, to be manufactured in China or elsewhere in the Far East.

How do I go about finding and then vetting manufacturers?

Dave Fishwick, This Is Money’s company doctor, replies: When dealing with a company abroad, start by being very careful and do as much research as possible.

Learn about their culture and even try to learn a bit of their language if possible. It will help you a lot and make a huge difference in closing deals!

As you may know, one of my many companies sells buses, and I have many clients who travel from Spain to buy my minibuses for their hotels and resorts.

I also import coach seats to build my coaches from Spain and Italy.

One day a Spanish couple who owned a hotel chain came and wanted to buy some buses and mini-coaches from me.

They spoke perfect English until we got to the price; at that point they negotiated a price in Spanish amongst themselves and then offered me a price in English.

This has happened several times in the past with foreign customers.

I thought it would be hugely beneficial if I could understand their language so I would know exactly what their opinion was about my prices and their true opinion about the product and cost.

I decided to take action and took Spanish classes twice a week for two years. Now I can speak, read and write Spanish which has been a huge advantage.

To find suppliers in China and elsewhere, look online at a platform like Alibaba, which can put you in touch with thousands of suppliers. Some of them will be willing to supply relatively small minimum order quantities.

Still, I wouldn’t recommend it for complex or custom products or if you buy in larger quantities and on a regular basis.

I recommend that you visit potential suppliers at trade shows yourself and perhaps also visit the factory where you intend to buy.

If that doesn’t sound like something you want or you don’t have the time for it, you can hire a quality control and inspection company to contact the supplier and inspect the products before shipping.

Sometimes they have English-speaking staff – often British expats – who can bridge distance and language barriers for you.

However, English is spoken in the larger cities in China and certainly by representatives at trade fairs.

But, as I said before, a little understanding of the language and culture of the country you want to send large sums of money to can be a huge advantage.

Do not go for the cheapest quote to deliver the product if you are not sure whether the supplier is able to deliver the quality you expect. You may find the most affordable quotes come from smaller companies.

Personally, however, I have found that it is better to have a consistent supply of quality products from large established suppliers who have built up a good reputation for providing similar products.

I’ve mainly focused on China here, as it is by far the largest supplier of manufactured goods.

The next largest manufacturer of plastic products is Germany and then the US. You will find that it is much easier to get manufactured goods from China than elsewhere in Asia.

Bank on Dave: Our business doctor

China is currently having some domestic issues and sourcing products from there is becoming increasingly controversial for several reasons. But at the moment it is still the production country par excellence.

Some large companies are starting to shift their focus to other countries to manufacture their products, but this is not going to happen overnight, and large companies have a lot of resources available to do this. The rest of us are better off waiting for other countries to become more established suppliers.

It’s not just the cost of the product that you need to consider. The cost of shipping from smaller producing countries is likely to be higher, which will add to the unit cost of the products.

An alternative you should look into is to have the products manufactured right here in the UK.

There are plenty of companies that can produce plastic products here, and the cost difference may not be as big as you think when you factor in shipping costs.

The advantages of making them here, depending on what exactly you are looking for, are rapid prototyping and production time.

You can also have smaller product runs and of course you would have the added value to the product by being able to market your products as if they were made in the UK.

Find a good competitor selling similar products and approach their business in a journalistic manner. Talk to previous sellers, suppliers, distributors and customers. You quickly learn what is essential.

Treat a new business like a research process and you will do well.

Good luck! (Buena Surte!)