Direct purchasing from China has gained
increasing significance to international importers as
they seek to control their costs while still offering
low-cost merchandise. China's importance has grown
enormously in recent years due to significant gains in
management and quality. And the Chinese have been
extremely successful. It’s hard to ignore the sourcing trends. Everywhere one looks it’s all about purchasing from China. In 2005, the US exported about $42 billion dollars worth of goods from China. At the same time, however, it imported more than $240 billion dollars worth of products and supplies from China. Sourcing China has gained prominence due to presence of American Trading companies like Streamline Alliance who believe that China will play a major role in low cost high quality product export and thus have established their base in China mainland and Hong Kong. In recent years, many a multinational company have reduced their production volume by directly Purchasing From China. Instead of placing orders to Hong Kong, they are now placing orders to China. Some of them even set up their own establishment in China to enforce their purchasing strategy, as well as to reduce their overheads and purchasing costs. Purchasing from China seems to be a trend in United States though European nations are still to catch up with the "China Sourcing" phenomena. The reasons for China’s success are fairly obvious. They include, but are not limited to:
- Low overheads & labor rates
- Large indigenous population
- Huge industrial base
- Supportive government
| - Stable economy
- Good communications
- Growing infrastructure
- Entrepreneurial spirit
| There are obviously great benefits to China buying, but there are also many risks and drawbacks. How can you benefit by
Purchasing from China while avoiding the pitfalls? There are only two ways: finding a Chinese supplier directly or going through a Procurement Specialist.  Going Direct
Going the direct route has many difficulties. Besides language and cultural barriers there are simple issues of experience and proximity. Locating the perfect supplier is only the first step. Monitoring, quality control, and on-time delivery are all equally important and none of them can be handled effectively long distance. Thus, in most cases, unless a company is planning to hire knowledgeable staff and set up a China-based procurement function, the direct approach is a tricky proposition at best. Third Parties Third party agencies can be very beneficial at facilitating your China purchasing initiatives. However, many agents lack true Mainland China experience and tend to depend upon long chains of tenuous relationships to accomplish their tasks. This means that their service isn’t ideal and it’s likely more expensive due to the number of
middle people. A good third party agent possesses the following attributes: - Offices in the US and China
- Native and Chinese specialists in China
- Specialists that can assist with the entire sourcing function including
- Engineering new items
- Identifying and qualifying suppliers
- Negotiating lower prices
- Ensuring quality control and assurance
- Logistics management that can assist with importing into the US
- Legal recourse in the US
- Guarantees for work
With all these characteristics, a third party agent can become more than simply a way to get products and supplies from China, it can become an effective China-based representative for your company with none of the costs and problems associated with office set-up and maintenance.
With all these characteristics, a third party agent can become more than simply a way to get products and supplies from China, it can become an effective China-based representative for your company with none of the costs and problems associated with office set-up and maintenance. Streamline Alliance, Inc. is just such an organization. Please contact us today for more information or a quote at market@stream-max.com
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