China manufacturing is very diverse and complex but at MyShipper we are experts with over 15 years experience so we will give you some information to help. The greatest challenge businesses face when importing from China is finding the best factory for their goods. Business owners must understand the type of factory they are purchasing from before placing an order. The risks are intellectual property theft, long delays, poor quality goods, and even in the worst case scenario, the factories going bankrupt and you lose your deposit.
There are 5 different types of factories in China so we will identify them to give you more information and to outline our expertise at MyShipper.
Small China Run Businesses
Low Price – Best Value – Lower Quality – Higher Risk
These factories are 100% owned and operated by Chinese and often provide the lowest price but also the lowest quality that doesn’t meet Australian standards. They often have poor management, minimal quality control procedures and will cut corners to keep the price low.
These factories are often used by Ebay and Gumtree sellers as they are the only factories that provide the prices needed to compete. By buying cheaper goods that are lower quality, it also means you will have to lower your selling price in Australia.
At MyShipper we tend to stay away from these factories as we prefer to build quality brands that sell for a premium in Australia. These factories require hands-on management and oversight to even consider.
Large China Run Businesses
Low/Medium Price – Low/High Quality – Low/Medium Risk
These companies usually began as small factories and through shrewd management and investment, they have evolved into reputable organisations.
These factories produce high standard goods and have quality control systems in place. Although management is Chinese, they manufacture Australian standard goods with careful oversight from an agent in China. English speaking staff work at the factories and the premises is generally of a decent standard with decades’ of experience under their belt supplying large volumes to western markets.
Strict oversight, tight contracts, regular factory inspections and quality control before dispatch are essential though.
High Price – High Quality – Low Risk
Wholly owned foreign enterprises are factories set up by foreign companies to reduce overheads while having control over their intellectual property. They are a higher cost but offer the finest quality in China. It is normally hard to buy from them as they have exclusive deals in place.
State Owned Enterprises
Variable Price – Variable Quality – High Risk
State Owned Enterprises are factories owned and controlled by the government. They are inefficiently run and most make a loss every year. MyShipper rarely deals with these manufacturers because they rarely suit our client’s needs.
Foreign Direct Invested Enterprises
Medium Price – High Quality – Low Risk
Foreign Direct Invested Enterprises are factories that have investments from foreign companies. They produce high standard products but are more expensive than Chinese-run factories. MyShipper likes dealing with these types of factories as they have good quality control and management. They are hard to gain access to though and normally only deal in large orders. As MyShipper have a large customer base and often order from these types of factories, we are able to push the smaller orders through as regularly do business with them. To get the best price you need to order in bulk really as they have large contracts with international companies so it is harder to negotiate a deal on a smaller order.
MyShipper minimises your risk by always doing due diligence on every factory we work with and we carry out an onsite factory inspection before we even arrange a sample. MyShiipper has to check certificates, quality of machinery, cleanliness, safety, working conditions, materials used, products recently produced, current contracts with large corporations, testing for harmful chemicals, management procedures and staff training before we can approve a factory. We endeavour to produce Australian standard products at China wholesale prices delivered to your and quality guaranteed.