Outsourcing Production to China

[Angelo0]

Hi, we are an Italian firm which makes and markets designer bags. We have made the decision to outsource our production and focus more on our core competences of Designing and marketing. China is where we would like to outsource our production to. Now our question is how can we find a reliable partner? Which ofcourse won’t make counterfeit copies of our bags.

[randall_flagg]

Even if your partner in China won't copy your product, other producers might very well do so as soon as they get a hand on one of your items.

[roddy]

Get onto sourcing sites such as alibaba.com, find supplier making similar products and get in touch with them. I'm no expert, but that's what I'd do.

[BilLH]

Outsourcing is a good way to cut costs, but it also brings additional risks of which you should be aware. Like you mentioned they can counterfeit your products, but also take in mind the conditions in the factory where these will be produced. Quality of the product can also become an issue due to which some of the bags should not be sold. It means you would have to invest more into quality control.

[simonlaing]

Using Alibaba.com you can find the small players.

Going to a fair you might find some bigger ones.

The big issue won't be finding a supplier which you can do easily it will be monitoring the quality for which you should hire a firm to check the quality of the production and the reputation of the supplier.

www.chinalawblog.com has many good posts about these issues.

In doing business most small operators won't want to do a letter of credit as the banks here charge a lot for them and they take time. Usually they use TT or bank transfer 30% up front 70% on delivery. After the 2nd or 3rd order you can ask for terms where you pay for the products a month after your receive them.

Also around the 3rd time you have to watch out for quality fade, where the Chinese companies will substitute poor quality materials to save money and cut costs. (Why taking the very lowest cost bid is not always the best).

To deal with this you should employ a quality control firm or go your self to China and take items off the line and test them before production, during production and at the end of production.

Expect the issues to come up and then you will be prepared.

Good luck,

Simon:)

[Angelo0]

Thanks so much for your replies, I had a look at alibaba.com but from there I can still not tell if these companies are trustwhorty or not. Can someone share his/her experience about alibaba.com? I know it is one of the big b2b websites out there.

[gougou]

If you are not happy with the information you can find online, you have the choice between coming to China yourself or getting a consulting company to help you find a suitable supplier.

I work for a consulting company myself, and during a supplier search we visit every company we are recommending at least once during the process, as there just is no way to get a reliable impression from their web page.

As for not having problems with counterfeits, I'd emphasize what simonlaing already said in a different context: don't pick the cheapest...

[peekay]

For handbags your company should consider sources other than China as well, such as Thailand or even Indonesia. I know someone who works with European designers just for this purpose, let me know if you want her contact info, might be worth having a chat with her. I believe she even lived in Italy for awhile and fluent in Italian, which helps.

[JaneF]

Did you make a deadline when you should have this partner?

Like Peekay mentioned you should also look at other options then China, but the procedure is more or less the same I guess.

[Angelo0]

Well our production employees will work for us till June 2009. So within a few months we should have this strategic partnership.

Management feels comfortable with outsourcing to China. Certainly cheap doesn't mean that quality is always on the mind of the partner. We certainly do need a high quality standard otherwise we won't sell the bags.

@Gougou could you tell me more about the process you normally use for selecting a sourcing partner?

[zerolife]

I can't say for bags but for computer & electronics, in particular software, pretty much everything on these B2B sites (alibaba, ec21, made-in-china) are counterfeit. yes, i know it from my job.

if I were you, I wouldn't trust these guys.