Need to Manufacture in China? Here is Your Biggest Challenge

by | Dec 10, 2016 | Sourcing

Congratulations! If you are interested in manufacturing in China or Asia then you have successfully created a product that consumers will (hopefully) purchase, so you need a lot of units.

If you’re not 100% sure how to proceed then this article is for you. We want to shed a little light on the other side of the world so that you can see what you will be getting into.

It goes without saying that the main benefit of manufacturing in Asia is a cheaper cost to produce your product. Beyond that, there are many pros and cons, but no benefits are as hard-hitting as the cost reductions.

Your #1 challenge to manufacturing in China/Asia

The many challenges of manufacturing in Asia include a longer supply chain, the volatility of the economy, and lack of direct oversight. There are more, but according to Greg Shugar, co-founder of Thread Experiment, far and away the biggest challenge is finding the right factory to work with: “The #1 reason why people don’t manufacture overseas seems to be that it’s just not easy to find a factory.”

If you have never tried to find a factory in China, then you may wonder how it could be so hard. After all, there are tens of thousands of factories!

We agree with Greg’s assessment, but we would clarify that it’s not finding a factory that’s hard, it’s choosing one. A real-life example of this difficulty is explained by Charm And Luck founder and business consultant, Christine Syquia:

One of the most important decisions a new company with a product to sell will make is selecting a manufacturer… Before we came to work with these artisans, we certainly had to sift through many shoddy factories and unscrupulous businessmen.  We did not have any real contacts in the manufacturing side of the industry so we had to do all of our initial research online.”

Christine and her business partner found a prospective factory online, and then she made the costly decision to fly to China and inspect the product:

I distinctly remember taking the train from Hong Kong into China by myself.  Standing at the Hong Kong station, I waited for an announcement of the track for the train to Guangzhou. But they never announced the track in English, so I just followed all the Americans and European businessmen and took a leap of faith that I was on the right train… Luckily, I arrived safe and sound and the business meeting was fine… except that the product was horribly produced!”

After a harrowing, expensive journey to visit her factory, Christine found the product to be nothing like what she had been expecting.

Simplifying the search: sourcing agents

In this article, Original Grain founder Ryan Beltran recommends getting a sourcing agent to help avoid a situation like Christine’s:

“If you’re really serious about doing this without going to China, your best bet is to get in touch with someone on the ground there who knows what they’re doing. I have a couple American friends who do nothing but sourcing for a living. Getting in touch with someone like that will ensure that you enter the process with your eyes wide open.”

After you find a good factory, your new part-time job will be ensuring they maintain your quality standards – unless you get some help. Greg Shugar explains:

“…With any factory – overseas or domestic – it will be important to stay on top of quality control because mistakes happen and shortcuts are made no matter where the factory is located. I used an agent when manufacturing in China who was responsible for ensuring the quality and accuracy of the manufacturing of our goods along the process. You may want to do the same. The cost is minimal and the benefits are priceless.”

Where to go from here

If you think working with an Asian factory is best for you, we wish you well! Here are some resources from Insight Quality to provide further guidance (be sure to contact us, as well):

Thanks for reading! Do you have any questions about the article? Is there something else you’d like to add? Leave a comment below and we will get back to you.

Andy Church

Founder & CEO, Insight Quality Services


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