September has arrived. For many companies, it’s the “business new year”. It’s the month to launch new initiatives, start new ideas and do everything possible to boost your business by selling new products or rethinking your pricing strategy in search of greater competitiveness. This is why you may decide to import products from China.
When a company prepares to embark on international purchases for the first time, it is quite “normal” to have a number of doubts and fears. However, as sourcing professionals, we can assure you that, the vast majority of time, fear is due to a lack of planning.
Companies often think that if their competition is importing products, simply anyone can do this. This is a somewhat risky statement. Although the phenomenon of importing and international purchasing is widespread, a good sourcing strategy and clear foresight are needed in order to import successfully. For this reason, we have prepared a list of the 10 questions that every company should ask itself before importing to ensure it is truly ready to embark on the path of international purchases.
1. Do I know the characteristics of the product to be imported?
The answer to this question may seem obvious, but be careful, because it is something that must be defined – on paper – with care and attention! When the decision of which product or products to import has been made, a document must be drawn up to define the exact characteristics of the item to be manufactured; its size, color, weight, logo or packaging.
Furthermore, all these details should be clarified before starting manufacture so that any possible setbacks are avoided. Making changes during the manufacturing process is never a good idea and can alter the expected outcome.
2. How many products will I import?
Depending on whether it is a new product; something never sold before, or if we already have it in our catalog, but we simply change the supplier, making accurate forecasts is more or less possible.
If we are dealing with a well-known product, there is a history of data that will help us in our forecast. If it is a new product, we will have to create a strong marketing and commercial plan in order to estimate the necessary stock supply figure as closely as possible.
Although it is usually better to have a sufficient supply of products in the warehouse than to risk running out of stock, it must be remembered that low turnover is often counterproductive.
3. Do I have to adjust to a price per product or will I adapt the sale price based on cost?
This is a somewhat complicated question that can be answered with “it depends”. In reality the answer is interrelated to other questions, such as the previous one and, of course, with the pricing strategy that we plan to use.
The greater the quantity of imported products, the lower the price per unit. However, not all companies are willing to make large investments without first testing if a product is accepted in the market.
4. How will I make my product stand out from the competition?
Start from the belief that manufacturing products in the same country as the competition does not, under any circumstances, mean that both must be identical or that we have to avoid personalizing the product.
This is an important point to clarify because we often come across companies that are afraid to import from China for fear of not being able to differentiate their product from other companies in the sector.
A large part of the identity of our products will be driven by the level of detail that we define when we establish the characteristics of the product. Above and beyond that, a good marketing strategy teaches us that the added value of our brand goes far beyond the product itself. Factors such as customer service, after-sales service or warranty extension can be applied to any product as an added value to it.
5. Does my product need additional material, such as an instruction manual?
In addition to the characteristics of the product, it is important to consider whether additional materials are needed for the sale such as an instruction manual. If so, the services of a professional translator will be needed.
In this case, it is important to coordinate the times in the orders to receive both goods in a similar time frame.
6. How long can I wait for the product to arrive?
Importing products from China has many advantages, but speed is generally not one of them, and we must take this into account so as not to run out of stock or have similar problems.
It is also important to know if the waiting times are similar to usual waiting times for an import from Asia or, on the contrary, if it is as a result of some kind of setback such as problems with quality standards or customs.
7. When do I have to start promoting my product?
In direct relation to the previous point, order waiting time is a factor to take into account when planning marketing campaigns. These should not be launched too early as the consumer could forget the product nor too late.
Of course, the type of product and its price also influences its promotion. Launch campaigns are totally different for a product that creates a “feeling of necessity” than for a product that could be considered an “impulse purchase”.
8. Do I have a team with adequate international trade training?
One of the most pertinent points when considering exporting is who will manage the purchases? Do I need help from an external purchasing consultant?
It is important to be aware that, although our company has a purchasing department, the import process in countries such as China requires a certain experience and a high level of specialization in conducting business with Asian countries. It may be the case that we have well-trained staff who have never managed international purchases from countries like China, so we have to assess whether we want to leave this responsibility in their hands or we would prefer to use external help from a specialized sourcing partner.
9. How will I find the right supplier?
The selection of suppliers is one of the most frequent problems in importing from China. In fact, it is the decision that can either lead to resounding success or to trigger a series of problems that make the whole process complicated.
Ignorance of the large Chinese market leads many companies to omit completing appropriate market research that provides information on the competitiveness of the chosen supplier. When the wrong manufacturer is chosen, problems can quickly arise.
10. Do I have a list of contingencies and possible solutions?
Having a prior list of contingencies and possible solutions or we could say, “a plan B” or even “a plan C” is what will undoubtedly make the difference between a smooth and successful importation process and one that can trigger a really bad experience with its consequent losses.
Knowing the stages of international purchases in depth allows us to anticipate possible problems and plan a solution in advance.
If you are not completely clear about these 10 answers then DO seek professional help
At this point, it is clear that there are many factors to consider when importing from China, and that not all companies are completely ready for it; especially when it comes to their first international purchase experience.
In this sense, and as in any other business field, it is vital to know that having the support of a specialized purchasing consultant provides peace of mind and a surprise free import process.
The purchasing agent (or sourcing partner) accompanies you throughout the process; from the choice of suppliers, to the entire manufacturing process through to monitoring transport and delivery. Your experience is key, because, in practice, it reinforces the success rate.
After more than 15 years working in the field of importing from China to many different countries in Europe, we at S3 Group know that a professional purchasing consultant is essential for any company to import industrial products in a simple and reliable way. We cannot guarantee that problems will not arise during importation, but we can assure you that we have solutions so that our client’s import process is a resounding success.