Benefits of visiting manufacturing premises of your Suppliers

E-commerce for a lot of us has been totally life-changing and hopefully never taken for granted. But at times the human element goes missing and disappears in the e-commerce space. We sometimes get so immersed in our little E-com businesses and start thinking this is how business is done in the real world.

However, on the other side of that computer/laptop/phone is also a human being just like us hence making those human connections/relationships can and should never be underestimated.

Always a good idea not to judge a book by its cover.

In the long run, authenticity does seem to always play itself out, be it in any business space or industry. Often what we see from the outside, will quite likely make us perceive that would be the same from the inside. But as they say, never judge a book by its cover.

A supplier with an amazing and well-made Alibaba Page & Website can highly influence our decision in wanting to do business with that particular supplier. An Alibaba page with great pictures, product descriptions, and gold status will at the very least wake up our curiosity buds and push us into looking what exactly that supplier has to offer.

Also, when we meet suppliers at their Exhibition booths and see all their products displayed there, it helps us see what quality level their products are at. But at times the samples displayed at these exhibitions by some suppliers are of a higher quality than those of their actual manufactured products.

The look and quality of the samples displayed at a booth are also significantly enhanced by all the lighting and decoration around the supplier’s booth. A few also continue to adopt the old school tactic of using an attractive salesperson or models (both local and foreign) in getting buyers attention to their booths. We can compare it somewhat to superhero movies, which look amazing on-screen and often take our breath away. But the process in making those superhero movies is often not very glamorous and there are a lot of trials and errors involved to arrive at the finished product on screen.

So similarly, the process in making any product is often filled with its challenges and realities. It’s always a good idea to see what’s going on the other side of the fence to have a better understanding and a more wholesome perspective of things. No harm in learning how the product is made, what are the processes involved, and more importantly if the supplier is someone you could potentially do long term business with.

No doubt flying halfway across the world is not always going to be possible in terms of money, time , and energy. Though it costs initially, these things are worth it from long-term investment point of view.

Ideally, you making these trips to visit your suppliers is better but going forward you can always find some reliable companies & people who can help you with the process of auditing new suppliers, paying visits to your regular suppliers and maintaining one on one touch with suppliers. Having boots on the ground at all times will keep most suppliers on their toes when doing business with you.

Below are some of the more specific benefits of visiting your suppliers manufacturing premises :

  1. To find out if the supplier is an actual manufacturer or trading Company

    First things first, a visit to any supplier will let you know if you are dealing with an actual manufacturer or a trading company. Once that doubt is clear you can focus on the main tasks. In the Chinese business culture, it’s still very common for suppliers to say they are manufacturing the product even if they are not. Many of these suppliers who are essentially trading companies still believe (though maybe rightly so) that they will lose a lot of business if they openly show themselves as a trading company. Now, of course, there is nothing wrong in working with a trading company, especially if they have managed to meet your target prices, quality requirements and been professional throughout the process. So through your visit, you will have established if the supplier is a manufacturer or trading company.

    If they are a trading company, your first impression about this company would not be very good as you would naturally feel this company might not be very trustworthy to work in the future because they hide their real identity even before the first deal. However, it’s up to you if you wish to continue doing business with this company or not. Some of these trading companies are financially strong and can provide a quite competitive pricing without compromising on the quality and overall service.
  2. Get an understanding of the manufacturing process of a product(s)

    One of the first things you will likely notice during your visit to a supplier is whether or not your supplier is manufacturing the product you need and which process is being outsourced to other manufacturers. You need to see if the manufacturer has its mold making machines, injection mold machines, and printing machines.

    Also, if a supplier has all these machines and infrastructure one can safely assume that this supplier is quite strong financially and this could help you get better payment terms from them in the future. Nearly for all products you need a mold and some sort of printing on them. This will help you know how much control can your primary Manufacturer have over the quality of the product.

    You can see which process is being done in house and which process is outsourced to another supplier. Why is this important? Well, these are some of the factors which can highly influence the cost of the product, how much quality control a supplier has over that product, maintaining consistency in quality, delivery times, and after-sales service.

    If your product requires significant customization then working with a supplier who has the capability & technology in their manufacturing premises is most ideal. The process of product development becomes easier and faster and fewer things getting intercommunicated because fewer manufacturers will be involved in the whole process. Though of course, you would also need to have confidence in them and make sure your current supplier is capable of doing all this in their factory without compromising on the quality of the product and delivery times. A good manufacturer will know what are their strengths and which manufacturing processes to outsource.

    The quality of the product can be significantly enhanced if some part of the production process is outsourced to a nearby manufacturer who is specializing in that manufacturing process. Also if you have found a manufacturer who can make the complete product in their factory, these suppliers can give you very good pricing as they are not involving other suppliers in the manufacturing process and the production time too can be shorter from these suppliers.
  3. Relationship building exercise and making that Human Connection

    Building Relationship and trust with your supplier (Called Guanxi in Chinese business culture) makes the whole process simply becomes more Human and real. You may not speak the language and the supplier’s sales team might not be fluent in speaking English but sharing a meal, drink or Chinese tea can make you feel more comfortable in doing business with that supplier.

    Also, many suppliers themselves would feel the same way and could try supporting you in many ways in the future. As a buyer, it will also give you some confidence to know if the supplier you will be dealing with is someone you can feel comfortable, enjoy and trust to do potential big business for the future.

    This is just one of the tools to make your business grow, but it’s always best to be alert and professional during this time. One should not let these things cloud your decision-making ability and practicality. Some suppliers even try to take advantage of these situations by over-promising and then later under-delivering, especially after drinking some Chinese Alcohol (Baijiu). These drinks have up to a 52% alcohol level and hence are not recommended for you to drink.
  4. Opportunity to negotiate better pricing and payment terms

    You can negotiate better prices and payment terms when you visit your suppliers personally. Most of the suppliers see this as a very positive intent and hence give you the best pricing and terms possible from their side.

    Usually, the money and time you spent in visiting your supplier will be covered by the supplier giving you more favorable pricing for your product. There is, of course, no guarantee for this but if you go in with a positive attitude and intentions, then more often than not the other person will pick up those vibes and try supporting in return to the best of their capabilities.

    For example, if you were dealing with your supplier on 30% + 70% payment terms, then potentially after your visit, you could get payment terms like 10% or 15% deposit and the balance after the inspection and before the shipment. Also, once you do business with a particular supplier for a few years, they even can support you by giving you some credit, where you give a deposit of 10% and pay the balance after 60 to 120 days after the shipment.

    Now, these kinds of payment terms are naturally influenced by several factors, such as your reputation, order quantities, your financial strength, the supplier’s financial strength, and their company policies. However, on the whole, it can be a win-win situation for both parties in the long run.
  5. Re-emphasize the importance of quality, improve quality and your projects will be given more importance

    By understanding how your product is manufactured and how much work/ labor goes into making a product, it could help you as a buyer to sell your product more confidently, market it more properly and increase your sales. So, during your visit to your manufacturer, you can see how exactly your product is being made and how you could enhance the quality of a product by you giving some of your suggestions to the manufacturer.

    Also, if you have been seeing some bad reviews of an existing product on Amazon and it’s a product you wish to sell yourself now, then during a visit to the manufacturer you can come up with a solution to those quality issues with the manufactures engineering team. Besides, with you being physically present there, the supplier will take you much more seriously and genuinely try to help by giving more of their time and resources on your project.
  6. A great chance to be inspired and come up with new product ideas & solutions.

    Often the salesperson you may be dealing with would be handling several other accounts hence they may not have the time and energy in offering you their other products over the internet hence a visit could potentially open new doors for your business. So, by visiting a supplier it allows you to see what other products your supplier is making and this, in turn, could help you come up with new product ideas for your product line or for even come up with a customized product idea.

    Just being in the sample/showroom of the supplier can greatly inspire you to come up with ideas! It could also help you come up with some bundling product ideas for an existing product you are selling. Not only that but you can also understand if the manufacturer is specialized in the specific product category that you want expand into. Working with a manufacturer matching your future product goals/categories is always ideal.

    It’s also best not to show too many emotions initially even if you feel that manufacturer could turn out to be good in the future. Yes, it is always better to keep your cards close to your chest. This will help you stay more level headed during your visit and also give you the clarity and presence of mind to observe other things.

    When you are at a manufacturer's premises, do make the effort to also see if the supplier has all the valid certifications for your product, and if they are displaying a competitor’s products openly. If yes, then you can quite safely assume that they might do the same for your products in the future. All these things can guide you in your decision-making process and know if this is a supplier you would want to do business in the long run or not.
  7. Visit your supplier’s competitors and other nearby manufacturers and markets

    Visiting your manufacturer allows you to visit other nearby suppliers so that you can compare the quality and pricing of your product. Normally in China, manufacturers of specific products can be situated in a specific city or province. So, these won't be very time consuming and expensive trips.

    By visiting other nearby suppliers, you may get some other product ideas, an opportunity to understand why is there a price difference between suppliers and how different manufacturers work for the same product. Also, by doing this you keep all the manufacturers on their toes as they will see you are aware of their competitors and thus the current china market price of their products.

    You will likely have a deeper understanding of the whole situation. In the long run, this will help you talk more professionally to your suppliers by you having a deeper understanding of product manufacturing and the supply chain in general.

    You will eventually learn to ask your suppliers better questions and filter out suppliers which don’t meet your requirements. In the future this could help you attract more professional and suitable suppliers to work with as suppliers too want to work with knowledgeable and experienced buyers. On top of this, you can visit local markets in China such as the Yiwu Market where you can get a lot of new product ideas and meet a lot of other manufacturers.
  8. Physically experience the suppliers working culture and conditions.

    You get to see how is the business module set up by your supplier. You will know -
    • If they are organized, clean,
    • How are the labors treated
    • Are working conditions safe
    • How is their company's culture and happiness levels
    Many buyers have their values and internal compass and wish to work with people who share the same values and principles. Also, maybe your current product brand is leaning towards being Eco- friendly and hence you want your suppliers also to have ethical manufacturing processes and working conditions.
  9. Gives you leverage on you insisting for faster production & delivery times.

    Being present at your supplier's manufacturing premises also gives you an opportunity and some leverage to emphasize on the importance of not having too long or delayed delivery times for your orders. Some suppliers have to be reminded constantly about shipping your goods on time. Sometimes you need to explain them in laymen terms how crucial this aspect is if your business has to grow.

    You need to let the supplier know that they too will be winning more business and potentially larger orders if they ship your goods on the agreed time. Normally an average delivery time for a supplier after they receive a deposit from you is 30 days, but once you meet your suppliers this could go down to 25 or even 20 days. This could give you a huge advantage over the competition and also you will not run out of stock.

    Most suppliers will treat you as a serious buyer, when you spend your time, effort, and money on your visit. Therefore, more likely they will give more priority and emphasis to your current and future projects.

So basically, once you are at a suppliers manufacturing premises, you get a sense of the potential business you can do with that particular supplier. Often, it’s the undercurrent vibes you will get from everything surrounding you to help you know if you should do long-term big business with supplier.

It feels so much better and safer to have met the company whom you will be sending payments to in the several hundreds of thousands shortly. Initially, the whole trip could be a little overwhelming, especially when visiting several suppliers or markets.

Of course, you don’t have to make decisions on the spot and it’s always best to enjoy & learn during the whole experience. Not to mention, you will make the long-term relationships during the trip. Once back home you can evaluate everything with your team so to make the best decisions for your business.

We are bringing here together years of experience in dealing with Chinese market.

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