China Sourcing

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China Sourcing Solution

Advantage China^TM specializes in China sourcing business, providing B2B services for customers interested in China sourcing, China procuring, China manufacturing, operating or opening an entity in China.

Our Sourcing Advantage

Having China sourcing for many years, our experienced staff speaks English, Chinese and many Chinese dialects. We not only thoroughly understand China's regulation, tax, and corporate system but also their business culture. We deploy many staff on the ground and have access to specialists who will put your concerns first and address them professionally.

Working Together

We will analyze your issues with confidence. If we believe your matter is unlikely to achieve the results you desire or that others would represent you better, we will advise you as such.

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For China Sourcing Contact us:

Corporate Office

World Trade Center

Shanghai Office

China Warehouse

Sourcing from China

Choosing the right path

Perhaps the easiest way for a company to source in China is to link up with an existing supplier's operations there. This allows for Chinese production prices at a familiar level of quality control and delivery. Companies that are understaffed or on a tight budget can turn to China sourcing agents. Outside help on China sourcing ranges from matchmaking to consulting on logistics and quality control. According to McKinsey Quarterly, procurement agents' fees in China sourcing range from 3 to 12 percent of the purchase price, depending on the level of service.

Execution and Operation

Maintaining quality controls, as well as communication channels, is key to successfully sourcing in China.

How do you structure the relationship with your China sourcing partner? Some companies use a full-service China sourcing agent and others set up a PRC representative office to manage China sourcing operations. Companies with longer planning horizons, more management heft, and a commitment to the Chinese market may choose to set up a wholly foreign-owned enterprise (WFOE), a more popular means of entry than the joint venture. Some companies acquire a PRC firm to jumpstart their WFOE formation.

No matter what route you take, maintaining high product quality will be challenging. For critical components with a low tolerance for error, having an employee on the ground to monitor the manufacturing process is indispensable. For other goods, regular onsite inspections, random product sampling, and periodic holistic evaluation of supplier operations generally suffice. Quality maintenance, delivery performance, inventory, and cost savings should all be reviewed regularly. If there are breaches, the PRC supplier must have a non-negotiable timeline for returning to the standards.

Strong communications systems are critical to supply chain management. According to our experiences, the order-to-delivery lag can be as short as twelve days but can run up to eight weeks. If demand changes unpredictably or there is no capacity for excess inventory, good communication between China sourcing suppliers and US clients becomes crucial. Good online technology also encourages local operations to coordinate buying efforts and thus maximize the cost savings that Chinese procurement brings.

Pros & Cons for China Sourcing Options

Think strategically and consider long-term plans before you pick your path.

1. Source selective components using a China sourcing agent
PROS: Easy to set up
CONS: Low-cost savings; little awareness of Chinese markets

2. Source products through a representative office in China
PROS: Hands-on approach and development of local expertise lets you sleep easier at night.

CONS: Increased management demands

3. Establish a global procurement center
PROS: Maximize savings internationally; build deep relationships with PRC suppliers
CONS: Requires good enterprise and communication systems within the company

4. Set up a joint venture or wholly foreign-owned operation
PROS: Production with rapid response; better positioned to capitalize manufacturing enterprise in China on growing PRC strengths
CONS: Large fixed investment

5. Create a full manufacturing, distribution, and sales network
PROS: In some industries, China is the major growth market
CONS: CEO or board decision; must have long-term investment and exit plans

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