How to find a manufacturing company in China
Selecting a manufacturer is one of the most important decisions you must make if you’re going to sell a product. “The major and initial issue in choosing a Chinese manufacturer is determining whether the manufacturer is ‘real’ or not,” says attorney Steve Dickinson who specializes in helping foreign companies that conduct business in China. He advises anyone wanting to open business or outsource services in China to be wary of certain companies. “Chinese companies are masters of disguise. They use the Internet and sourcing websites to make themselves look much better than they are. But they can also hide the reality even on site. So you have to develop an efficient system for breaking through the façade to get to reality as quickly as possible,” he explains.
First, start by creating a database of every potential supplier you can find. Initial research generates a list of 50-100 potential suppliers using web directories. Networking and word of mouth have also been excellent sources of suppliers.
Second, assume the vendor is a middleman until proven otherwise, not the other way around.
Third, avoid factories that refuse to list the name or location of the production facility- they probably don’t own the PRC factory and are a middleman of some sort. Instead, focus on those factories that can clearly show production experience with your particular product or production method.
Fourth, be aware that polished English skills do not reflect production skills.
Finally, visit the factory to assess quality, skills, and machinery. On the ground, many factories are nothing like they represent themselves to be online and in printed materials. That’s why this step is so critical. It may also help to have a local representative or consultant in order to avoid company misrepresentation. Some companies are like theaters. They show you a happy busy workplace, but as soon as the buyer leaves, it goes back to a standstill. Do not fall into the trap of going to lunch or dinner with the factory people that fall into the obvious reject list. On the other hand, if the good factories invite you to lunch or dinner, take the time to go. Good factories are rare and you should work immediately to build a relationship.
Perhaps we can add the following precautions to the aforementioned:
Experience is an important criterion when choosing a manufacturer. They should be experienced or specialized in the product they fabricate. If a factory has never made a similar item, move on to the next factory.
Location is paramount as well. Believe it or not, where a factory is located can have a major impact on a project. Taxes are just one reason why. All goods produced in China are assessed a Value Added Tax (VAT), a percentage of which is rebated to the factory once its goods are exported. But that rebate rate varies from province to province. So, in theory, a product can cost 10% more just because you made it in the wrong province.
Production Capacity must be taken into consideration when choosing a manufacturer. Production needs can go from a few hundred pieces to millions of pieces in just a few weeks, so rate factories on their ability to scale production quickly.
Take each of these factors into consideration when choosing a factory for your product, and your odds of making the right choice will greatly increase.