This is a brief overview of the potential of doing business with China.
Many more updates to follow.
A coder who can do business with China will be good for this country. It’s not hard to influence more into thinking like this. The government would be happy for charity influencers to think like this. SMEs are good for people – they move this country forward. I will and train others to be SMEs. Cut back on the welfare state.
One you chosen a product:
Minimum order quantity (MOQ) is that it is often very flexible. For many of the products imports, which have costs ranging from £8-£80, suppliers tend to specify MOQs around 50-200 units each. Generally, you can simply ignore this. In the vast majority of cases, if a supplier specifies a MOQ of 100 units and you send them an order with 50 units asking them for their banking information to send the 30% deposit, I never hear them complain. If you can meet 50% of their MOQ requirement (and possibly as low as 25%) chances are you will experience the same.
So many people get caught up in negotiating on price that they often overlook other things they can negotiate:
- Cost of freight
- Freight terms
- Payment terms
When Martin went to China in 1993
Guangdong province was a was chaotic, a total mess the undeveloped world at its worst. Architecture non-existent – a huge bloody mess. Half made roads, half finished buildings, land being cleared. Guangdong was like a huge construction site. 2 years later Martin returned there was not one familiar site. There were universities, brand-new expressways, bridges, factories, warehouses, lots of brand-new luxury cars, no sign whatsoever of the juxtaposition of eras that had fascinated him 2 years previous.
Guangdong became the workshop of the world. Full of factories, many Hong-Kong owned producing making ultra-cheap, mass produced high quality goods. Influencing the world by producing business and wealth creators. This is how and where China’s economic transformation started.
Now Guangdong, less than two decades after the first volcanic eruption, is turning over a new page in its history. It can no longer sustain its old comparative advantage. Labour has become too expensive, too demanding, the expectations of its people transformed. The most dramatic illustration of this came in May-June 2010 when a wave of strikes broke out which resulted in huge wage increases at Foxconn, a Taiwanese-owned firm and the worlds largest electronic contract manufacture employing 270,000 at its Shenzhen complex, at Honda and many other companies.
Guangdong’s factories are no longer able to compete with those in China’s interior provinces, where wages are much lower. In 2007 alone, no less than 1,000 shoe factories closed. Martin went in 1993 he returned in 1995. In 12 years the rise and fall of Guangdong was phenomena unfolding.
China is so economically viable because the age of their workforce. In the south the manufacturing heartland – the age of the workforce has driven the cost of the labour to unprecedented levels. Women leave school leave villages in their millions to go & make good quality products. At low prices this demographic will change by the time. Drawing I did on the excellent iOS Numbers on mobile phone.
Median age will increase from 30 to 45 this will will raise the labour costs.
Now, is a good time to be involved. Relationships with suppliers will build rapport and goodwill on price rises will be in your favour.
At present, China comparative advantage lies primarily in low-end manufacturing, where it is able to exploit the huge supply of cheap unskilled labour and thereby produce at rock-bottom prices – or “China Prices” as the new global benchmark has become known
Lots of e-bay sellers only use Alibaba. They become frustrated and have unanswered emails, Visit them and write kind, thoughtful emails, generate endearment.