Any business involves risk and, on many occasions, so does any new action that we are about to take. That is why many companies, faced with their first international purchase, are afraid of the possible risks of importing from China, or any other Asian country.
As sourcing experts, we cannot disprove this belief, but we do feel obliged to clarify it: an import may involve risks, as with many other aspects of business, but with the right information and preparation, the difficulties are greatly reduced.
As with many other aspects, the key to avoiding problems when importing is, most of the time, to know in which aspects we can have problems with our production or purchase, so let’s see what the most common risks are when importing from China or other Asian countries.
Supplier selection
This is undoubtedly one of the worst risks, as a bad choice of supplier can trigger many different problems, from poor product quality, inappropriate design to delivery problems.
It is essential to know the capacity and experience of the supplier before closing our first deal. It should be clear that specialisation is a plus, so it is best to make sure that the chosen manufacturer has already worked on products similar to ours in the past.
The choice of suppliers to manufacture products in Asia is so important that there are still many companies that decide to outsource this part of the process. In fact, at S3 Group, the search and selection of suppliers is still one of the services we offer the most.
Cultural and linguistic differences, a greater risk than it might seem
In Western business we tend to think that by mastering English we can solve any situation, but this statement does not apply to China or other Asian countries, where they are deeply rooted in their customs and languages.
The importance of having a local person, who knows not only the language but also the customs, to help us in the import process can be fundamental.
Poor communication can lead to great risks for our imports, such as poor product design.
Product quality risks
It is extremely risky to outsource production and not carry out monitoring and quality controls. It is not just a matter of checking that the product being manufactured corresponds to what we have ordered, but also of checking that the materials are suitable, that it is free of defects and, of course, that its characteristics will allow it to comply with the certificates and permits required for its sale.
Quality controls in the manufacture of products are fundamental in any type of goods we are producing. However, the first time we work with a supplier, this monitoring becomes even more necessary, especially when it comes to electronic products, which require the European CE mark and other certifications in order to be marketed without problems.
Transport and logistics risks
The final phase of importing is not risk-free. In fact, in many cases, all stages of production seem to go smoothly, but when it comes to shipping the products to the destination country, problems start to arise.
Difficulties with the reception of the products are often caused by poor forecasting of the waiting time. It must be taken into account that transport from Asian countries to our company is not as fast as we would like, and on certain occasions, and if the dates have been miscalculated, this can cause problems for the purchasing company in terms of stock breakage.
In addition to the long waiting times, in many cases, there are also the risks that our imports may run at customs. If the product does not meet the necessary requirements, its transport can be completely blocked and, in addition, unforeseen costs are often incurred due to the payment of customs duties.
Avoid risks with a sourcing partner!
Experience is the key to success. It’s not just about avoiding risks, it’s about knowing how to deal with them should they occur.
From selecting the right supplier, to checking the quality of products or managing their transport: any part (or all!) of the production process can be at risk of problems when the sourcing strategy is not the right one.
That’s why, at S3 Group, we have been working for over 15 years with highly qualified teams in all the countries involved in the sourcing process, and we are used to dealing with the risks of any kind of import.