I am telling this story based on many years of experience working with overseas buyers, especially small buyers. When they start up their business in their home countries, they always tend to order very small quantity of products to test their markets. They also like to work with big factories with good reputation in China. Is it always good idea to work with big and famous companies in China? Is big company suitable for small buyers to test the water? The following typical problems will make you think twice before you make your decision.
1) MOQ; small buyers obviously won't be able to order a lot at first. Big company has to worry about their production cost when they could take your order which is less than their MOQ. Every Chinese companies will welcome any orders regardless of quantity because they think the quantity will increase in the near future,or they just don't want to lose customers to their competitors. We all know that to build up the trust and to increase orders will take time. And big company will run out of patience real soon and increase MOQ in the end.
2) Unit Price: big company doesn't gain a big edge over rivals by offering a low unit price. They need big orders to cover their fixed cost and expense for daily business operations. Therefore, Small buyers will expect the slightly high unit price from big company.
3) Delivery time: it happened to one of my customers recently. This so-called big company delayed the order for more than two months because they experienced the difficulties of recruit workers and delivery other big orders on time. Small buyers are not in their priority. They rather keep the big buyers happy. It sounds ridiculous but true.
4) Order Requirements: Small buyers always can't order whatever they want. Big company have their requirements for small orders. Taking wedding/evening gowns for an example, big company will have limitations for certain fabrics and colors. It doesn't work if you just want to order few gowns for different colors. It definitely doesn't work in small buyers' favor.
5) Flexibility: Big company is in the driver's seat in terms of FOB, shipping method and payment terms.
I by no means want to say everything working with big company is negative. But you have to think carefully before you want to work with them, otherwise, troubles and misunderstandings will be inevitable. The last but not least, I wish you the best of luck in your business in China.
on 2012-06-22 05:28:00 Tags: small buyers, big company,purchasing assistant, guangzhou interpreter,business assistant
