Posts Tagged ‘China Sourcing – Blog’

New Life and China Sourcing

Posted by avela on December 13, 2011  |   13 Comments »

Usually I am writing detailed blogs about China Sourcing. But not this time. It is time to take a break from China Sourcing and celebrate life. One of the perks of being in China for over 10 years now is having the privilege of participating, in a small way, in the lives of my staff and friends in China. As I sift through all the memories of factory tours, difficult negotiations and solving a miriod of issues associated with each case, the things I remember the most from my 39 trips to China so far, are the personal memories. And what strikes me today as I write, is watching the children my close friends in China grow up. It is startling sometimes to see such big changes when I swoop in from the US 4 times a year.

Ray (old partner), Ema and Sarah Yuan.

Sarah Yuan making fun of me.

I am reading a story to Sarah and Michael.

Nancy (VP of Operations) and her 4 month old son.

BIG 4 month old boy who needs an English name.

Elaine (in finance) and her daughter. (no english name yet)

Elaine’s daughter at 2 years.

 

China Sourcing and Protecting Intellectual Property- Part Two

Posted by avela on December 13, 2011  |   4 Comments »

                                                      China Sourcing: My personal experience.

Go-Dome™ The Worlds Finest Portable Planetarium

 

To sum up part one briefly, China has a conundrum when it comes to intellectual property. On the one hand, they are the world masters at copying or knocking off. There is a cultural argument, or some might call it an excuse, that it in the tradition of Confucianism, it is considered an honor for your idea to be copied. And copying can even be rationalized as patriotic, as that it keeps Chinese employed. But as China transitions from low cost provider to the high tech leader they are determined to become, they are creating intellectual property that needs protecting world wide, including China. So the dynamic is changing, but still, rampant copying or knocking-off is occurring. This is a reality and the best way to deal with it is to divide and conquer so to speak. In other words, your China sourcing plan should include having different components made in different factories in different locations and the packaging and assembly in yet another location.

Go-Dome™, China Sourcing and Intelectual Property.

OK, that catches you up on part one of China Sourcing and intellectual property. Now on to a personal example. I also have another company called Go-Dome™. Go-Dome™ manufactures the world’s finest inflatable portable planetariums. We sell through distributors around the world. And most of what we provide is made in China as you might imagine. The dome cloth, the Go-Dome™ itself and the Newtonian™2 spherical projection cases are all made in different places in different locations. So the above mentioned scheme is critical to securing our place as the finest inflatable portable planetariums in the world.

From China Sourcing to selling in China.

And now I am actually selling Go-Dome™s in China this year. To do this, I have developed a relationship with a Chinese distributor. So it is even more critical to protect my intellectual property now. Since I have started this effort, a Chinese company has knocked me off. So I guess I should be flattered. It validates that China is a good market. But the big difference is that although my Chinese competitor knocked me off, it is a poor copy and gives me distinction in China. We are the BMW of inflatable planetariums in China and China loves quality. It is never a bad thing to have a competitor to be judged against. And as long as we keep improving and innovating, we will always be number one in the Chinese market. I can feel good about that because China is a huge emerging market. I am proud that this China sourcing story of my American company, Go-Dome™ is not only sourced and protected in China, but is also selling to the Chinese market.

China Sourcing and Protecting Intellectual Property- Part One

Posted by avela on April 21, 2011  |   88 Comments »

China Sourcing seems precarious.

 

China has a reputation for knocking off or copying products. This reputation is well deserved. If you look at it from a neutral point of view, it is kind of amazing. I say amazing because, not only are the accuracy of knock-offs impressive, but the speed of copying a product is breathtaking. On one hand this is a good thing if it is your product  and you are trying to source it in China. However this uncanny skill is not so good if you are thinking about a factory copying your product without your permission and penetrating your market.

China Sourcing with perspective.

China Sourcing and Intellectual Property

But let’s take a step back. Usually, most knock-offs are commissioned by competitors outside of China and not initiated by the Chinese. And most of these knock-offs are introduced in third world markets and not head to head with, say a US or German market, because our markets are very difficult to enter. I know there are lots of high profile examples that seem to indicate otherwise, but I am talking about the majority of knock-offs I see.  I am not excusing this practice either mind you. It is not good. But it is a reality. So it begs the question, what to do about it?

One more China sourcing diversion before we talk about solutions. I am going to make a bold statement. Chinese people are are  extraordinarily honest and honorable. Considering China sourcing issues I just talked about, how can I make such a statement? Here is how. China is not a nation of laws. If you think about it, China has only recently become a world player in the industrial age. And the laws and judicial infrastructure are not in place compared to the west. Just imagine how businesses in the US would behave if we were not a nation of laws. It boggles my mind when I think about it. So I am amazed at just how well behaved the Chinese are considering these factors. And that the integrity of the people and the culture. On a side note, this is why relationships are so important in China. It is difficult to take someone to court over a dispute so both parties must get to know each other and trust must be earned.

What to do about China Sourcing while protecting your Intellectual Property.

Well, if you want to manufacture a product in China while minimizing being copied, the most straight forward solution is to have components of your finished product produced in different factories and assembly and packaging in yet a separate factory or even back home, wherever that may be. This way, no one company sees the whole picture or understands the function of your product. Also you should trademark, patent and copyright your products in China. The irony is that as China strives to evolve from the low cost provider to more sophisticated manufacturing, it is starting to produce its own intellectual property that needs to be protected not only world wide, but from the Chinese themselves. So patent, copyright and trademark laws are starting to be enforced in China out of necessity. I have seen dramatic change just over the past few years. (For more information, read this from the WSJ – “Is China Finally Getting Tough on Piracy?)

In part two of this blog, I will give you a personal example of a product I source in China for world distribution and what I have done to protect my Intellectual Property. (Hint: China Sourcing, Go on the offensive.)

Being safe is risky: How China Sourcing helps manage risk.

Posted by avela on February 28, 2011  |   77 Comments »

On the surface, China Sourcing sounds risky. Working half way around the world, with a completely different culture and system, with  a very difficult language, sets off flags in many a CEOs mind. But we all know that if you are stagnant and not expanding you are at risk in today’sbusiness environment. We also know that China in not only the quality manufacturer to the world, but now the second largest market. So where is China in your business plan? I said it before; China is either a place to cut your manufacturing or distribution cost, an emerging market or a direct competitor. Sometimes all three.

Chinese Symbols meaning "Risk".

The China Sourcing factor:

So if you are not factoring China Sourcing in your business plan, there is a good chance that you are putting your company at risk by playing it safe. China Sourcing companies like Avela Corporation can help you develop your China strategy, but regardless of how you approach China, you need help. Some see risk as a four letter word but, I equate risk with positive outcomes like opportunity, stability and growth. And the safe way to manage risk is through your business plan.

China Sourcing missteps:

Many companies realize that they need to be in China and spend a lot capital making missteps along the way. I hear too many stories of someone who “knows a guy” in China who can help me with my China Sourcing. These stories always start off well, with some success. But too may times end badly. Or countless stories of developing internet relationships that result in bad outcomes. Business in China is about finding the right fit and building a relationship. And knowing a guy or working through the internet is how I define risky business.

My over all point is that you need to include China in your business plans, and when you are ready to act, get professional help. Experts hire consultants, athletes have coaches and seasoned travelers hire guides. So do the safe thing and take a risk. And if you are considering China Sourcing in your business planning, manage the risk by getting help. Contact Gary at Avela for your China Sourcing business strategy.

China Sourcing and Accountability.

Posted by avela on November 15, 2010  |   70 Comments »

Nancy Li, Gary Young and the factory manager

Accountability: The Key to China Sourcing

I am asked quite often; “How can you guarantee that my order from China will be perfect?” I usually say that we have procedures and a process to work through quality issues. We have a whole list of things to do including the development of check lists, photos and video confirmation, and third party materials testing — just to name a few. But I don’t talk too much about what we are doing behind the scenes to increase accountability on the China and client sides. It dawns on me that maybe I should be bragging (just a little) about our accountability effort and how it saves time, money and benefits all three parties (our client, the factory in China and us- Avela Corporation).

And just like my last blog (I am not the hammer and you are not the nail) about negotiating by relationship and not through leverage, relationships play a large part in achieving accountability. An investment in relationship is an investment in accountability. When you have a real relationship, both parties do not want to let the other down. And that fosters accountability. But there are more layers to accountability than just having the clarity and good communication from a good relationship. Anther layer is commitment. Nothing sings louder than showing a Chinese factory that you are committed to your business, your product’s quality and to their success. No commitment is a template for failure in China.

China Sourcing is about the details…

And of course you have heard of the old business axiom, “What gets measured gets done“. Chinese factories respect this concept, so the more specific and detailed you are about your product and how it is made, the more accountable they will be. It shows that you care and are serious. In other words, if you provide every detail they need to succeed, you are not one of those “high maintenance” clients. Yes, they have similar stories of high maintenance and tell me that getting good information from a client is like pulling teeth.

Naturally, accountability is a two way street, so they will ask you about your responsiveness to problems and willingness to listen and consider their advise as they parse the issues involved in creating your product. When you show accountability, you get accountability. This leads me to one of my favorite phrases, “No plan survives its collision with reality” by the author of Fierce Conversations- Susan Scott. For me, that means we need to allow time, financial investment and patience to achieve a real success in China.

You need an experienced liaison for your China sourcing project

And as the sourcing liaison between our clients and the China factory, we perform these efforts as second nature now. But it was not always this way. It took us time to learn to foster accountability through the language and cultural and even the social political differences that exist. And I am thinking I need to appreciate my team more for how accountable they are and say thank you more often.

China Sourcing Agent : Avela Corporation is an experienced China sourcing agent which will assist your company in manufacturing project in China.


 

I am not the Hammer and you are not the Nail- Relationship Sourcing in China

Posted by avela on October 16, 2010  |   77 Comments »

I am the Hammer- image by Gary Young

Relationship Sourcing in China

There are tons of articles and books on the do’s and don’t of etiquette and culture in China. Everyone who wants to do business in China should have this basic understanding. But once you are past these formalities and want to develop a long term relationship, the foundation I like to build on is “I am not the hammer and you are not the nail”

Sourcing in China – When I Started My Business….

10 years ago when I started my China sourcing business, I saw China as a cheap place to produce goods for my clients. And my job was to get the lowest price possible at an acceptable quality. Sounds reasonable right? I was the hammer and they were the nail. I was a relentless negotiator. And this worked fine for awhile. I had found success. But as my business matured and I was looking for repeat orders and not event driven, one time deals, it became apparent that I needed to build relationships and my hammer/nail strategy was not working. In fact, it was not long before I found out I was not even getting the lowest price I thought I was. How could that be? I was getting bids from multiple sources and pitting them against each other. What I found was that these manufacturers were used to guys like me and knew exactly how to work me. I was the nail and they were the hammer.

Sourcing in China Requires Being a Good Listener?

So I took the time to stop negotiating and start asking questions and being a good listener. And what I heard was that these manufacturers wanted the same things but we were not listening to each other. We both wanted relationships. But in China you need to invest in the relationship. The fact that you are the buyer does not hold as much weight as you might think.

So what does that relationship investment look like? First the Chinese manufacturers want commitment. They would like to know that you are ready to give as well as take. They want to understand your long term goals so they can begin thinking about how they can contribute to a mutual future. They want to connect with you on a more emotional level to see what kind of person you really are. They want to build trust over time. And the thing that struck me the most was how I had ben missing the point all along. Stability and relationship were factors in not only the price but quality as well. As I changed my tact and became attentive to stability and relationship, I found out that price and quality took care of themselves.

I am not saying you still don’t negotiate price. You absolutely do. But you do it in a more sophisticated way. And you do have to watch quality closely, but when trust is part of that equation, communication and goals become aligned. When goals become aligned, greater accountability follows. And instead of a hammer/nail relationship you have an investment in your future in China. Contact Gary for your sourcing in china needs.

Transparency and the Why in my China Sourcing Business

Posted by avela on September 7, 2010  |   73 Comments »

So what does business transparency have to do with China Sourcing?

I will get to that in a minute, but let me set the stage.

Transparency and China Sourcing – Gary Young

As the transparency movement drives businesses to be more open about their products and services, it is becoming routine to expect full disclosure on the who, what, when, where and how our products and services are offered. It has gone way beyond “features and benefits”, and now with instant tools like FaceBook and Twitter, just to name a few, we are at the instantaneous mercy of the fingertips of our customers. There are whole new sets of questions being asked about our corporate cultures, how we treat vendors, employees and customers and even what our corporate values are as it pertains to our local environments and the world as a whole.

China Sourcing: Transparency Drives the Market…

From the consumer’s perspective, “Why are we in business” has more to to do with making life better and doing no harm than some of the seemingly more practical answers of the past, i.e,  making money, creating jobs and providing opportunity. Those things are great, but not what people are tweeting about. And we are judged on these transparency driven questions as much if not more than our features and benefits these days. And the thing is, we have got to get it right as someone is always watching.

Sound scary? Not really. It just sounds different and the good news is that it is driving a more responsive and responsible business culture. Now back to China.

Providing Value to Your China Sourcing Project with Transparency…

In my business, transparency has been part of our business model for almost 10 years. As a service oriented business, we have always made all information we find on behalf of our customers available. It always seemed to make sense to me. The goal has been success for our clients and there is no way we can possibly know everything about every client business we serve. So we need to partner with our clients to make sure great decisions are made on their behalf. When I first started, most people said that I needed to protect my sources, that customers would go around me if they find out critical information. I always believed that if we were structured to offer value through transparency we would be stronger for it. This has turned out to be the keystone of our business. And yes, we get asked about sweat shops, child labor and other socially responsible questions. These types of things are factored into everything we do in China. And the interesting thing is that these movements and ideals are permeating China too despite things you might read. I see it first hand. It is starting slow, but gaining momentum.

China Sourcing Transparency: What are your thoughts about the transparency movement? What are you doing about it?

Enhanced by Zemanta

A Ship in Port is Safe vs China Sourcing

Posted by avela on July 23, 2010  |   29 Comments »

I try to never miss my monthly Vistageâ„¢ 812 CEO group meeting. (http://www.vistage.com) We learn so much that I can implement in my China sourcing business and it provides me food for thought. Our chair Robin Stanaland always creates a poster with an  inspirational quote that captures that month’s meeting. Here is this month’s quote. “A ship in port is safe, but that is not what ships are built for. Sail out to sea and do new things.” – Admiral Grace Hopper:

Container loading in Shanghai China

Are you setting sail or looking for safe harbor?

It reminded me of the reason I got into sourcing in China, but more importantly it relates to todays economy and what CEOs are planning to deal with this uncertain future we all face. Many are setting out to sea and chartering courses to places like China, India, Mexico and Brazil.

Another great quote that relate to this comes to mind;  ”If you don’t know where you are going, any road will get you there”. I suppose that works for ocean courses over seas as well as the open road. As it relates to sourcing in China, it leaves us with a not so small question. Are you at sea or in port?

In planning for the future in uncertain times, you need to set sail and, need a good course. But change is hard and safe harbor feels good. At least temporarily. Eventually changes is a inevitable and can feel painful. But it does not have to be that way when you create a plan. I believe that China, for most business is a place to source products and services or a vast untapped market or a competitor that requires study. Maybe all three. There should be a place in everyone’s business plan that address China in some way.

Speaking of plans, there was a recent Vistageâ„¢ Pole: “CEOs foresee profit, job growth”  that speaks to this, where Nineteen percent say they are doing business in China. Another 1 percent say they plan to start doing business there in the next 12 months. These leaders are plotting courses and setting sail. China can be rewarding on may levels, but the sea to success can be treacherous. Make sure you get help. Do not try to navigate these waters without an experienced captain and crew to guide you.

Admiral Gary Young

Feet on the Ground in China

Posted by avela on May 26, 2010  |   9 Comments »

I believe that there are a few basic principles that are essential to having success sourcing in China. They are showing up, having patience and having feet on the ground. Actually there are a few more that are just as important as these three staples, but let’s save them for another time. I want to focus today on “feet on the ground”. This could mean a lot of things.

[youtube 2-qiauT6CAY 450 320]

Answer.com defines it as operating in “a sensible, realistic, or practical manner” and although not our exact meaning, this is universally good advise. But as it relates to sourcing products and services in China, our meaning is a bit more literal. We have feet on the ground. We have people in China. We have an established presence. This does not mean “I know a guy” or “we have contacts” in China.  So what are the advantages of feet on the ground? Here are just five.

  1. As a representative office, we do not have to lurk in the shadows, operating illegally in China as people who operate below the government radar do. This adds a layer of transparency and cuts down on corruption as direct transactions are more in your control. Operating in the shadows also means a lot of complications and missed opportunities as well. And typically, “contacts” disappear as other opportunities present themselves, leaving you back at square one in China.
  2. With feet on the ground in China, you instantly establish credibility and confidence with Chinese managers and business owners that you want to source products and services with. They know you are more likely to have sustainable business if you have proper representation in China. An obvious upside to relationship confidence is that you will get cheaper pricing more quickly.
  3. Being represented in China helps eliminate communication errors. Our staff has been sourcing products and services in China for over nine years, with systems in place to prevent miscommunications and false starts. This is seen as a great advantage for both our clients and Chinese companies as both sides are all to aware that communication is the most difficult part maintaining a good business relationship.
  4. With feet on the ground, you can mobilize faster, find more qualifies sources to choose from and head off issues while they are still manageable. This is so important that I am sure it will find its way to being a blog topic in the future.
  5. My favorite, that I have eluded to in the past is; to figure out what you do best, do those things and find other people to do the other things. We at Avela do those other things.

It has taken years to develop the systems, procedures and contacts to be an established company with feet on the ground in China. It is hard but rewarding work. It is what we do best. If what you do best is manage your business and have a need to source products and services in China, may I suggest you find a company that has feet on the ground in China to do those other things.

Ready for a Conference Call?
713.807.7900
© 2013 Avela Corporation
Corporate Headquarters
4500 Caroline St.
Houston, Texas 77004

Email the CEO
young@avela.com

The Avela Process


Website Management by