Get expert advice
e.g. What is the best way to market my cleaning business on the Internet?
Ask question
Questions

How important is it for Australians to actually physically travel to Asia to get a sense of developments there?

What do you miss out on if you don't go? read more

Asked by:
Jason Lim at Asia Recon
Hi Lisa! I would say it is critical for Australians to physically visit Asia to truly understand it. Although Asia is very mufti-cultural with many ethnic Asians here, things are still very different in Asia and things vary a lot from country to country. Like learning a language, the more you immerse yourself in a foreign environment, the easier it is to pick up the language. You don't even have to try as hard because, you lean by just being there. No amount of reading, watching videos or even talking to people about Asia but still in Australia, will be as good as seeing things first hand. That's why I believe in taking Australian entrepreneurs to Asia with Asia Recon to experience how locals live, what they do, what they use etc. Going to Asia will help prove or disprove your assumptions about Asia. I've come across people in Australia who think a certain way because they heard about it and they take it as fact, but actually they are completely wrong. For example, I was at a start-up event and one Australian entrepreneur thought social media doesn't exist in China, when in fact it's probably being used more there, than in Australia.
Please login or sign up to answer.
Questions

What were your experiences with wholesale buying from India or China?

Hi Savvies, I wanted to know if any of you have bought from China or India wholesale, and what... read more

Asked by:
Ling Lee Director at Japanese Sword Auctions Australia
Neil SteggallPartner at Wardour Capital Partners
One of our long term clients buys from China on a frequent basis and in relatively small orders. They have built an excellent long term relationship with an independent local buying agent who places orders, supervises quality and shipping (usually by mail) and advises on new products emerging. This is both cost effective and efficient
Neil SteggallPartner at Wardour Capital Partners
One of our long term clients buys from China on a frequent basis and in relatively small orders. They have built an excellent long term relationship with an independent local buying agent who places orders, supervises quality and shipping (usually by mail) and advises on new products emerging. This is both cost effective and efficient
Please login or sign up to answer.
Import and Export

If you’re not high value-adding, you’re adding nothing

We are all looking for high value-added products even if we don’t want to admit it. I’m not... read more

Added by:
Steve Bryant Industry leadership at QMI Solutions
Please login or sign up to comment.
Steve BryantIndustry leadership at QMI Solutions
Thanks Phil and Ling. It is the important perennial question for any business owner - "how can you add value for your customer?" I think history has shown how low-cost competitors, such as; Japan, Taiwan, India and China (to name only a few) have passed the mantle over time onto the next low-cost competitor. When a country's wealth increases, so does the desire of the population to have higher living standards meaning It is essentially unsustainable in the long-term to remain a low-cost competitor. Listening to customers and prospective customers about what they need, is a fundamental first step to understanding how your business can create value. Continue to do this to outsmart the low-cost competitors and you're well on your way.
Ling LeeDirector at Japanese Sword Auctions Australia
Thanks for the great article Steve! Makes me think about weighing up the benefits of value adding and non value adding manufacturing processes.
Import and Export

Offshoring, near-shoring, re-shoring: ip security in offshore manufacturing (an australian perspective)

In recent years Near-shoring and Re-shoring have become popular buzz words in the manufacturing... read more

Added by:
Brian Le Mon Owner at GBOS
Please login or sign up to comment.
Ling LeeDirector at Japanese Sword Auctions Australia
Wow! Thanks for the really detailed article!
Questions

Is the growing trend of offshore manufacturing good or bad for Australian SMEs?

A survey of SME Association of Australia members shows 17% cite offshore manufacturing as a key... read more

Asked by:
Ilga Horvat Operations Manager at Hornet Import and Export Group Pty Ltd
Steve BryantIndustry leadership at QMI Solutions
Hi Ilga. My company specialises in helping manufacturers adopt new technologies and practices to be more competitive. We've seen successes and failures in off-shoring manufacturing. The successful manufacturers are those that are familiar with the market as they know the intrinsic value of proximity to market and/or of the value of innovation in the supply chain. Manufacturing in low-cost locations just because it is cheap is fraught with danger and risk. Manufacturing in locations that are close to market or offering an innovative supply chain is less so. According to a new BCG report, there has even been a drift away from China as a global manufacturing heavyweight now towards Mexico, which offers low-cost and proximity to the US market. Unfortunately, Australia is the least cost competitive manufacturer across the 25 top manufacturers, but the area for opportunity is consumer electronics and precision medical manufacture.
Brian MallyonOwner at Luckypole Limited
Hi Ilga, For all the people that say off shore manufacturing is bad and that it would be better to bring it back, you never actually hear of anyone who would be prepared to ditch their current job and salary for a chance of working on a factory production line. Manufacturing is not where the money is made. Take any product and look at each component of getting it from the factory to the end consumer. Factory makes a small amount and the much larger slice of the pie goes to the logistics company, the company that advertises the product, the brand owner and the retailer. All theses are effectively service industries and that's where the higher incomes are. It's only in relatively recent history that small Australian businesses have started venturing overseas themselves to buy their products. Previously they just bought from local wholesalers who offered limited stock in limited colours at sometimes considerably marked up prices. If you are a small business with limited capacity for a three+ month turnaround of products and quantities are only small, it may still be better for you to buy locally. But I think any business needs to be constantly looking at their model for supply of products, and looking at the options available, even to just see what are the best options for the business on an individual basis. It's also not that long ago that buying offshore meant buying large quantities. That is not always the case now and there is more scope to buy in smaller lots, but whether you have the expertise and ability,and whether it will be worthwhile will still depend on individual circumstances.            
Please login or sign up to answer.
Import and Export

Who is really to blame for your offshoring failures?

Offshore manufacturing has become the only option for many Australian industries competing in the... read more

Added by:
Brian Le Mon Owner at GBOS
Please login or sign up to comment.
Be the first to comment
Import and Export

What do horse blankets, wind turbines and Brazilian beach bats have in common?

They're all things Hornet have imported from China, that's what! People are always asking what... read more

Added by:
Ilga Horvat Operations Manager at Hornet Import and Export Group Pty Ltd
Please login or sign up to comment.
Ilga HorvatOperations Manager at Hornet Import and Export Group Pty Ltd
Thanks for the comments, Neil and Ling. One of the things I love about Hornet is the wide range of things we get to do, and I wanted to share that feeling!
Neil SteggallPartner at Wardour Capital Partners
Great article Ilga. Thanks
Import and Export

Information Overload

Transferring manufacture to an offshore company is an interesting venture to say the least. Often... read more

Added by:
Brian Le Mon Owner at GBOS
Please login or sign up to comment.
Phil JoelDirector at SavvySME
Good advice Brian. I think this applies to most situations when you're bringing on a new business partner. Of corse, it is tricker when your business partner is on the other side of the world and hence need good management to ensure that it goes smoothly.
Import and Export

Zen and the art of offshore manufacturing

Many company representatives find themselves more than a little taken aback the first time they... read more

Added by:
Brian Le Mon Owner at GBOS
Please login or sign up to comment.
Be the first to comment
Import and Export

P.M. Pupperty.

Manufacturing with on offshore vendor introduces a myriad of complexities into the equation. Some... read more

Added by:
Brian Le Mon Owner at GBOS
Please login or sign up to comment.
John BelchamberOwner & Senior Consultant at Invoke Results
Another good article with very useful tips in it Brian, thank you for sharing.
Import and Export

Nothing like the Sample.

Sampling is a vital part of manufacturing. You want to see if the manufacturer is in fact... read more

Added by:
Brian Le Mon Owner at GBOS
Please login or sign up to comment.
Be the first to comment
Import and Export

Minimum Order Quantities - 'it depends'

All factories have a minimum order quantity.  If you want to order more, there’s no problem, but if... read more

Added by:
Ilga Horvat Operations Manager at Hornet Import and Export Group Pty Ltd
Please login or sign up to comment.
Be the first to comment
Import and Export

Relationship advice for offshore manufacturing

Long distance relationships are hard. You wonder what they are doing, lie awake at night... read more

Added by:
Brian Le Mon Owner at GBOS
Please login or sign up to comment.
Be the first to comment
Import and Export

To Sea or not to Sea....

The cost to actually get your product from an offshore manufacturer into your warehouse  can... read more

Added by:
Brian Le Mon Owner at GBOS
Please login or sign up to comment.
Phil KhorFounder at SavvySME
Awesome article Brian, thanks for sharing. This example of LCL shipping consideration shows that we can't always rely on our first instinct but on the experience of others around us. Thanks for being part of the community and bringing your experience to the table.
Import and Export

So you're thinking of importing from China?

Good on you!  We all know China's a huge country with thousands of factories making everything from... read more

Added by:
Ilga Horvat Operations Manager at Hornet Import and Export Group Pty Ltd
Please login or sign up to comment.
Ilga HorvatOperations Manager at Hornet Import and Export Group Pty Ltd
Thanks for the comments everyone! I'm loving being a 'popular' article too! :) Brian, great explanation of how trading companies and agents are not necessarily more expensive. And like you, we have native Chinese speakers who can make things happen. Tim, one point about your comment 'with Alibaba you can see what is available'. That's true, but what if you know what you want and it isn't available. Many of our clients get what we call custom manufacture - they know what they want and we help them find a factory to make it exactly how they want it. So they get something unique. The brand managers in particular love this - for gift packaging, branded giveaways and so on.
Brian MallyonOwner at Luckypole Limited
Hi Tim, Thanks. The analogy is more to try and point out that having a pre conceived idea does not always offer the best option. I own a trading company, so of course I am biased, but there are certainly occasions when using my services is not the best or cheapest option. Generally, yes, for a few low cost purchases doing it yourself is a good option. But if I am to be honest, I see Aliexpress as being quite expensive, although no doubt cheaper than many of your local options, and a benefit is that you have more security over your money in payment terms. I know I generally write a lot, but I like to offer examples when I make a statement to at least try and show I have some practical experience of what I am talking about. I am currently doing a small order of a product for a customer in Ireland. It is an order for 1,500 pieces of a product worth about USD 0.30 each + my margin, which is bugger all in this instance, but it is for a good customer. (So the value of this order is only small) I looked up over 20 potential suppliers on Alibaba and the suppliers either were too expensive, or would not make my quantity. I also looked at suppliers not included on Alibaba or any of the main B2b websites. Their products so far have exceeded the expectation of my customer, are cheaper than what my customer got quoted, including my add ons, and the service has been excellent. But, and this is quite a big but, I have a Chinese speaker sitting next to me who has controlled all this process. I couldn't do it myself as the people we are dealing with speak very little English. Plus there are also other options where you can look at even smaller quantities. More than happy to speak about this stuff more if you like to know more about all this. In my details is a link to a website where I offer some advice on dealing in China. Feel free to have a look around in the 'forum" section. This website has nothing to do with my trading business and is purely about offering advice or answering questions.
Import and Export

Have you really thought out your Offshoring decision?

Simply by taking a quick look through our website you will find that a key competency of GBOS is... read more

Added by:
Brian Le Mon Owner at GBOS
Please login or sign up to comment.
Be the first to comment
Import and Export

Lowering Costs - Product Sourcing from Overseas

Most small businesses are doing it tough. This is not only due to worldwide economic conditions,... read more

Added by:
Brian Mallyon Owner at Luckypole Limited
Please login or sign up to comment.
Be the first to comment
Import and Export

5 tips for sourcing imports from China using Alibaba.com

My first proper online business was selling false lashes online. These are the little strips of... read more

Added by:
Wendy Huang Full Time Blogger and YouTuber at A Custom Blog in 4 Minutes
Please login or sign up to comment.
Jolio Fadan
Great write up. Though we can also consider getting online courses about import business if we really want to know more about importing process.
Brian MallyonOwner at Luckypole Limited
Some very good and valid points in this article. If I may, I would also like to add some comments that may assist any potential buyers when looking to buy goods from Asia, predominantly China. 1. It is true that a "gold" supplier (with badge showing number of years they have been a gold supplier) provides a pretty good indication that a supplier is legitimate. It should be remembered that these "gold" supplier notations are applied because the supplier has paid money for it, not because it is based on quality. Some comments to explain this further:- a) For most suppliers there is very little information about the quality of the products or services the company will provide. In all my years sourcing product from China, I have rarely had a problem with illegitimate suppliers, more so the problems have arisen after placing an order with a supplier. They can be minor or large, but as a buyer you need to be constantly alert on the progress of any order. Quite often, you cannot expect the same levels of service you would get locally, so you have to balance the potential cost savings you may get and compare that to the work required in getting the deal done. b) As someone who started in this business before Alibaba was even around, there are other outlets that can offer options for your purchasing. I know of many good factories that are not even listed on Alibaba. It may be the biggest, but it should be remembered that Alibaba is essentially a platform to put a list of suppliers in one place to make it easier to find a supplier of a particular product, so is not really what you would call a sourcing platform. My company was once a gold member, but the five grand a year I paid wasn't worth it for the return I got, so we cancelled it. So not being on Alibaba and not being a gold member is not necessarily a reason to avoid a supplier, but I also do accept it is one thing to consider. c) At the initial stages of any business relationship, a Chinese supplier will be looking at the short term nature of the business deal. You may be thinking long term, they are more than likely looking to maximize their profit from the first deal. Remember they are getting many requests and a lot of those are just people shopping around, so they will not always value the long term potential at the outset. Quite often saying things like" I want a small order to test the quality and build it as my business grows", is often translated to " I want a small order, and you probably won't see me again if I cannot sell this." d) Avoid anyone in China selling branded products. That iphone, or branded polo shirt, may be made in China, but it is almost guaranteed to be fake. Brand owners generally have very strict agreements in place with manufacturers, and that does not involve the maker being able to sell these goods directly to anyone they like. 2. Yes, it is very important to select quite a few suppliers. Even when I have suppliers of a product I have used before, and will likely use them again, I nearly always get additional supplier product details to be able to make comparisons. a) If you have been using a good supplier and know their product and service quality, sometimes even paying them more is a better option that having to go through the process of vetting new suppliers. b) I do however disagree with the comment about not having an idea about what you can afford. It is the responsibility to the buyer to have an idea of the product information and the associated costs. This to me is one of the main areas where there are problems. Buyers don't know what something costs, they therefore select the cheapest option when talking to suppliers. Problem is that generally the cheapest option is cheap for a reason, which may be product quality or service quality. c) On Alibaba they will generally show a price range of a product on the main product listing pages. Buyers should bear in mind that these prices listed are often not the real prices so should not make any judgment based on these. (Suppliers call this a marketing tactic to entice potential buyers, I call it a flat out lie.) d) Quite often when asking for quotes, information will be missing. Follow up until you have received everything, otherwise you may find some nasty surprises when it comes to the real amount needed to be paid. e) As for communication, you need to remember that English is often not the first language for most suppliers. Not only that, but sometimes an email can be easily understood, whereas talking is incomprehensible. So everything needs to be stated clearly and the shorter the communication the better. 3. Yes, most definitely sampling is important to make sure of the quality. I would even add that, to add some comfort it can be worth considering to have a third party do an inspection of the goods. In the majority of cases for relatively large orders, the payment process is 30% deposit, followed by 70% final payment before the goods are shipped. This inspection can be done before making the final payment as a way of offering some further peace of mind. generally this will cost around USD200-300 currently for an inspection done to AQL (international) standards. 4. For logistics, and with larger orders, shipping by sea is probably the most economical method. (It is handy to look up "incoterms" to know what the different terms mean.) Quite often a buyer will leave the shipping to the supplier (CFR/ CIF), but I would nearly always recommend against this and to arrange shipping on an FOB basis, which means arranging it yourself through your own forwarding company. This is because the cost per CBM can vary significantly with other charges potentially making your costs a lot higher if not done correctly. (Personally, I always arrange several quotes from different suppliers, as I would with my product supplier, just to get a good comparison.) So for example, the supplier may use the shipper with the cheapest shipment rate, but the buyer is stuck with inflated port charges at the destination. Finally, obviously one of the major reasons (probably the major one) that people look to go overseas when sourcing/buying products is the cost. Unfortunately this often leads down the path of looking for the cheapest option. Taking the very cheapest option looks good at the start, but often it is the cheapest option for a reason, which is generally product quality. So a buyer really needs to try and make that judgment call between getting the product at a reasonable price and ensuring the quality is to their satisfaction. Asia is a place of great potential for cost savings, but greed can sometimes outweigh those potential benefits. So I hope some of my comments may have added a little more to help people in their thinking on this subject.