Prices that are quoted to you during your meetings with suppliers at the Trade Fairs are for information only and will not reflect the cost for your specific requirements. Be sure you inform each supplier about your requirements early in a conversation. This enables them to calculate the cost more accurately.
What is a Specific Requirement?
A specific requirement could be a more complex sales packaging. For example a window box that is more expensive.
Another specific requirement could be an instruction manual in several languages that are often needed for Europe. Importers from EC countries sometimes request up to 12 languages in their instruction manual, which is more expensive than only 1 or 2 languages.
Another requirement often requested by Hypermarkets and Supermarkets is an additional semi transparent PP strip. This prevents customers from opening the sales packaging during shopping and removing part of the contents. Depending on the size of the sales packaging, two or more of these PP strips maybe needed.
For electrical products, the plug is a substantial cost factor. The British BS plug is more expensive than the US plug.
The length of the electric cable is another cost factor. If your toaster must have a cable length of 1.50 meters, it will cost you more than one that is only 0.75 meters long.
Quality Requirements
Your quality requirements are a very important cost factor. The requested quality standard is defined by your requested Acceptable Quality Level (AQL) that sets the limits for the satisfactory process average.
Usually you have 3 defect categories
1. Critical defect
2. Major defect
3. Minor defect
Here I provide only a short overview because this subject is thoroughly covered in my other eBook How to Assure Quality of Imports From China.
If a critical defect is discovered during a Final Random Inspection, the whole lot will be automatically rejected and must be re-worked or re-produced.
Allowed Major defects range mostly from Major 1.0 – Major 2.5 but that depends on the products. Hi-tech products such as consumer electronics or small/large electrical home appliances range between Major 1.0 – Major 1.5.
Allowed Minor defects range mostly from Minor 2.5 – Minor 4.0 but that also depends on the products. Hi-tech products such as consumer electronics or small/large electrical home appliances range between Minor 2.5 – Minor 4.0.
License and Royalty Fees
Other important cost factors are license and royalty fees that have to be negotiated with certain suppliers. DVD players/recorders, MP3 Players etc. are some examples.
If you or the factory do not pay these fees and you get caught after importing the goods, it will be very expensive and could even ruin your company.
You should realize by now that you need to know all the details before discussing or negotiating prices with any supplier during your visit at the Trade Fair.