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10 Aug 2010

A Typical Visit to a Small Chinese Factory

by Carey Chambers, dragonbn.com

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This morning I accompanied a buying agent on a visit to a small factory in Shanghai. I'm posting this article to give those new to Chinese manufacturing a general sense of what it's like dealing with a small factory in China, so they'll know what to expect when they make their first visit.

In this case, the buyer needed various plastic packaging products, so he sourced a few potential suppliers using Alibaba. After exchanging emails, sending out specifications, and receiving quotes, he arranged to visit four factories that seemed most promising.

Today's visit was to a factory in Shanghai. Shanghai is not necessarily the best location for a small factory since rent is high and the minimum wage for factory workers is higher than in other regions at 1120RMB or about US$165 per month. However, it is convenient for buyers and for shipping.

At 9am a driver provided by the factory picked us up at our hotel. Chinese factories of all sizes will typically send a driver to pick up and drop off potential clients for a pre-arranged meeting. The driver didn't speak English, which is also typical.

Upon arriving at the factory, we met with the business development manager, the factory manager and several other key staff. The meeting was held in an office that featured samples of all their products. Only the business development manager spoke English.

During the friendly meeting, details related to the potential deal were discussed, such as factory capabilities, design alternatives, eco and social responsibilities, and price. Also, samples were exchanged.

After the meeting, we went for a quick tour of the factory, considering factors such as cleanliness, equipment, organization and so forth.

After the tour, the business development manager offered to take us to lunch, which of course we accepted. Again, this is typical, and gives both parties a chance to get to know each other better and start relationship-building outside of the workplace over some tasty Chinese food.

Note that, in this case, the buying agent had previously met the factory boss. In his view, a face-to-face meeting with the boss is critical to help him judge whether he can have confidence in this factory.


Comments

 


Carey Chambers | posted over 1 year ago

Sean, in this case the agent was a friend of mine and wasn't receiving a commission from the factory. It was genuinely in his best interest to find the best factory. But you raise an excellent point that people need to be aware of. Thanks for the comment.

Sean Morris | posted over 1 year ago

Carey,

I think this is all very true. However also keep in mind, there is a 90% chance that the buying agent is not only being paid for their services by the buyer, but is also taking a commission from the factory.

I think its important people know there is a very high probability of this! In fact the buying agent doesn't even have to ask for commission from factories. It is assumed and is common practice to give commission.

It is very important to find the right partner that you can be sure you can TRUST.


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