After returning from your business trip to China, you will be very busy evaluating the huge amount of information collected during the trip. As suggested before, you will have a much easier task if you used a notebook computer and can print all information at once. If you sent daily reports, your job becomes even easier because most of your information has already been processed by your staff or colleagues during your trip.
As you have learned already, timing is important. Therefore, your company must track progress of the samples to make sure they ship on time. According to my experience, most samples will be delayed in one way or another. There are several reasons for it but one of the main reasons is that nobody really likes to handle samples because it is not productive and therefore this job is often passed to someone at the lower end of the factory hierarchy.
The factory managers may have promised you to deliver the samples at a certain date but they are not making them and have to wait until their sample production staff completes them. You are well advised to monitor progress closely otherwise, you may not be able to recover from the delay. The one who cries the loudest will be heard first.
Without approved samples, you cannot place orders, confirm orders with customers, or begin a sales promotion. In other words, you will lose turnover and the chance to sell products at maximum profit margin. Unfortunately, this step in the product creation chain is frequently underestimated. Now that you are aware of it, get your sample act together.
Beginning the Evaluation
Since you still have not made final a decision about placing your orders, the way your samples are handled by the factory should give you another indication how your production orders would be executed later.
Only after all the samples arrive can you start the evaluation. Check whether the samples meet every specific requirement, e.g. are the colors correct, is the size as requested, and did you receive the correct number of products and samples. Depending how complex the products being imported are, you may elect having the samples evaluated by your own QC department or a special authorized lab.
The numerous recent cases of lead paint tainted toys gives you an idea of what you are in for if you neglect your responsibility for thorough sample evaluation. Household items are easier to check than more sophisticated electrical home appliances or consumer electronics products. Always bear in mind that the submitted samples represent the standard that will be used during mass production.
After the Evaluation
With the sample evaluations in hand, you are ready to decide which factory gets your orders. Evaluating each sample by exactly the same criteria makes this decision easier than if the criteria is changed during the evaluation. If you must change the criteria during mid evaluation, be sure to go back and reevaluate earlier samples.
At this stage, you have several key data points to make your decisions easier:
- Price quote
- Sample performance
- Factory performance
- Your impression of factory management during your visit
- Result from your factory evaluation tour
If a price discrepancy remains between your target prices and the quoted prices it will be relatively easy to convince the selected factories to improve their quote. This should become your standard practice because some factories do not quote the very best price at the first meeting. After visiting China, it is probably fine calling the factory manager to negotiate a better price by phone because it is faster and you have met him in person. Given a good reason why you need a better price, he will seldom refuse to negotiate.
Remember to be fair and inform the other factories that you will not be placing any orders with them. Keep in mind you may decide to place a future order with them and want to be on good business terms.
Factory performance can change very quickly for the better or for the worse. A change of management can sometimes do wonders. Never take for granted that a factory will maintain the same level of performance as you experienced during a previous visit. That means you must not say: “Been there, have seen it all” and take no further action. Doing business with China is a constant evaluation process and only the one that understands the game stays on top.