Sinotech president Michael Bloom is producing a series of videos called Sinotech Reveals Secrets of China Sourcing. The first video addresses the risks associated with sourcing products to China. Sinotech works with brushless DC motor manufacturers and has 25 years of experience sourcing custom-engineered products to Chinese factories. While there are many risks involved with sourcing products to China, the benefits – namely, inexpensive costs – outweigh them. Bloom states that successful sourcing is about mitigating these risks.
The following are some of the top risks regarding China sourcing:
Quality: The greatest risk, poor quality, can shut down production, endanger consumers, cause major financial losses and poison professional relationships.
Factory selection: Using the wrong Chinese factory can guarantee your failure. Some factories tend to overstate capabilities in experience, staff and equipment.
Negotiation: Achieving the lowest price involves analysis, interpersonal skills and cultural understanding. While negotiating a low price can save you money, there are times when too low of a price can backfire.
Logistics: These types of risks include damaged products, delivery delays and unexpected costs.
Intellectual property: Theft of intellectual property – your ideas – can run rampant. However, patent laws in China are improving.
Payment: The way you pay for products can increase your financial loss. Trust and banking methods that hedge the risks are the keys to mitigating this type of hazard.
General commercial risks: Such risks include defective products, corrective actions, management changes or a factory running out of excess capacity.
Political: These can include internal turmoil such as labor strikes or the demand for higher wages. Political risks deal with China’s relationship with the U.S. and the world in regards to topics such as the use and manipulation of strategic resources.
Sinotech is a full-service provider offering BLDC motor controller design, motor components, magnets, assemblies, optical encoders, motors and metal, rubber and plastic parts. With offices in Tianjin, Shenzhen and Shanghai, Sinotech handpicks factories that meet the specific needs of its clients and supervises production. This process ensures quality control and practical strategies for success, as well as cost and time savings. Learn more about how working with Sinotech beats doing business directly with a factory or through a broker.