I just want to get your personal opinion on this matter.

Of course when you ask any buyer, they all want the best quality and cheapest price. In most cases this translate as cheap wins.

Buyers most often go to the cheapest supplier, so the supplier who quotes low and quietly cuts corners on quality is the one who wins. Honest suppliers who prefer to quote higher and offer a better quality product lose out. The supplier who obfuscates catches orders first--and most often.

We standard firm on our commitment to quality and suffered terribly for 2 years. Today, We OEM for some of the leading brands and all our clients are long term clients and those who did not purchase from us are now returning and become loyal clients.

Looking back, if we had cut corners like other we all probably could have retired and living comfortably by now. But i do not regret that we have stuck by our guns.

In an article by Paul Midler published in Forbes.

"Quality fade is a major problem in China. However, the reason why this is happening is not so much so Chinese manufacturers can rake in big margins, it is so they can survive. Many Chinese manufacturers have no margin whatsoever. With currency revaluation, massive competition, tax reform and the end of VAT rebates, huge numbers of Chinese manufacturers are operating at a loss. They are doing the quality fade in a desperate attempt to stay alive for a few more months or years. China is in a desperate situation of pursuit of the absolutely lowest price. China's manufacturers cannot continue this race to the bottom and continue to survive. At some point, they will need to shift to higher quality goods at a higher margin. "

Let me know your thoughts and comments

Quoting from [Remus]:

I just want to get your personal opinion on this matter.

Of course when you ask any buyer, they all want the best quality and cheapest price. In most cases this translate as cheap wins.

Buyers most often go to the cheapest supplier, so the supplier who quotes low and quietly cuts corners on quality is the one who wins. Honest suppliers who prefer to quote higher and offer a better quality product lose out. The supplier who obfuscates catches orders first--and most often.

We standard firm on our commitment to quality and suffered terribly for 2 years. Today, We OEM for some of the leading brands and all our clients are long term clients and those who did not purchase from us are now returning and become loyal clients.

Looking back, if we had cut corners like other we all probably could have retired and living comfortably by now. But i do not regret that we have stuck by our guns.

In an article by Paul Midler published in Forbes.

"Quality fade is a major problem in China. However, the reason why this is happening is not so much so Chinese manufacturers can rake in big margins, it is so they can survive. Many Chinese manufacturers have no margin whatsoever. With currency revaluation, massive competition, tax reform and the end of VAT rebates, huge numbers of Chinese manufacturers are operating at a loss. They are doing the quality fade in a desperate attempt to stay alive for a few more months or years. China is in a desperate situation of pursuit of the absolutely lowest price. China's manufacturers cannot continue this race to the bottom and continue to survive. At some point, they will need to shift to higher quality goods at a higher margin. "

Let me know your thoughts and comments

Hi, that's a goodtopic. I  hope  more buyers can share their opinions.

Quoting from [Remus]:

I just want to get your personal opinion on this matter.

Of course when you ask any buyer, they all want the best quality and cheapest price. In most cases this translate as cheap wins.

Buyers most often go to the cheapest supplier, so the supplier who quotes low and quietly cuts corners on quality is the one who wins. Honest suppliers who prefer to quote higher and offer a better quality product lose out. The supplier who obfuscates catches orders first--and most often.

We standard firm on our commitment to quality and suffered terribly for 2 years. Today, We OEM for some of the leading brands and all our clients are long term clients and those who did not purchase from us are now returning and become loyal clients.

Looking back, if we had cut corners like other we all probably could have retired and living comfortably by now. But i do not regret that we have stuck by our guns.

In an article by Paul Midler published in Forbes.

"Quality fade is a major problem in China. However, the reason why this is happening is not so much so Chinese manufacturers can rake in big margins, it is so they can survive. Many Chinese manufacturers have no margin whatsoever. With currency revaluation, massive competition, tax reform and the end of VAT rebates, huge numbers of Chinese manufacturers are operating at a loss. They are doing the quality fade in a desperate attempt to stay alive for a few more months or years. China is in a desperate situation of pursuit of the absolutely lowest price. China's manufacturers cannot continue this race to the bottom and continue to survive. At some point, they will need to shift to higher quality goods at a higher margin. "

Let me know your thoughts and comments

I think your philosophy really depends on the type of goods you are manufacturing.


For products which have a long "shell life" i understand the demand for making quality a big issue but i don't see this principle being accepted across the board, for all goods.

Quoting from [Remus]:

I just want to get your personal opinion on this matter.

Of course when you ask any buyer, they all want the best quality and cheapest price. In most cases this translate as cheap wins.

Buyers most often go to the cheapest supplier, so the supplier who quotes low and quietly cuts corners on quality is the one who wins. Honest suppliers who prefer to quote higher and offer a better quality product lose out. The supplier who obfuscates catches orders first--and most often.

We standard firm on our commitment to quality and suffered terribly for 2 years. Today, We OEM for some of the leading brands and all our clients are long term clients and those who did not purchase from us are now returning and become loyal clients.

Looking back, if we had cut corners like other we all probably could have retired and living comfortably by now. But i do not regret that we have stuck by our guns.

In an article by Paul Midler published in Forbes.

"Quality fade is a major problem in China. However, the reason why this is happening is not so much so Chinese manufacturers can rake in big margins, it is so they can survive. Many Chinese manufacturers have no margin whatsoever. With currency revaluation, massive competition, tax reform and the end of VAT rebates, huge numbers of Chinese manufacturers are operating at a loss. They are doing the quality fade in a desperate attempt to stay alive for a few more months or years. China is in a desperate situation of pursuit of the absolutely lowest price. China's manufacturers cannot continue this race to the bottom and continue to survive. At some point, they will need to shift to higher quality goods at a higher margin. "

Let me know your thoughts and comments

Well, personally think that it depends on your products though. I'm a buyer for cloths/textiles and price are main part of my buying decision, but still it's not everything. I would always try to get the best prices, and not compromise on the quality.

If suppliers could not get it done at the targeted price, then they should have let us know upfront rather than agree on everything and then cut-back on the quality later on. It might be their ways of survive but it won't take them long.

China is one of the countries that buyers turn to for cheap prices. That is the reputation of the country and that is what buyers expect when they come here to buy.

It is true that buyers often do themselves no favors by always pushing prices. It is natural to expect that factories will cut corners to meet the prices and that is invariably true in many cases. But to place all of the responsibility for low price on the customer is a way for suppliers to shirk their own responsibilities here and thereby perpetuate the chain of low price, low price….

There are four main points that I would like to make here:

1.       Low price does not automatically have to mean low quality – Suggest to a Chinese supplier that low price does not have to mean low quality and 99% will disagree with you. It is the 1% that agree that are the ones you want to do business with!!  Suppliers that think and communicate with their customers can find ways to reduce price without reducing quality. Changing raw materials in consultation with the customer, changing product sizes up or down to make better usage of raw materials, changing hardware, changing finishes, changing packaging, working on getting better container loadings for products – these are all things that help bring prices down without reducing quality. Most suppliers in China are so ingrained with the concept that low price has to mean low quality and that comes to the detriment of their bottom line.

2.       What is quality? Ask ten Chinese suppliers why their prices are higher than the other guy and they will all answer the same way, “Our quality is better”. Now ask them how their quality is better than the other guy and almost none of them can give you a clear answer why the product they are making is worth more than the guy down the road. Bear in mind that no supplier says that their own quality is crap, they all say that their quality is the best – yet almost none of them have an understanding of what makes their product quality better.  Pushed for an answer the supplier will invariably suggest that they use higher quality raw materials!! Really, but the other prices are based upon exactly the same raw materials. Perhaps the supplier offering the cheaper price is just able to buy his raw materials better than you!!

If a supplier really wants to justify a higher price on quality grounds then the supplier really needs to educate the customer as to why the customer is better off paying more for their product. You can’t just claim that your quality is better and then expect the customer to accept that and then pay more. More importantly though is that IF you are going to claim that your quality is better then you well better ensure that your quality is faultless. You will not get a second order if your quality turns out to be less than what other factories are offering for a cheaper price.

3.       Sales people have no knowledge of their products! This is not always true but is true in far too many cases. Foreign buyers are not stupid – well this is not always true but true most of the time! So assuming that they are not stupid and that they understand the product that they are buying then the supplier’s sales person should be able to clearly articulate the selling points of the factory. In most cases sales people in factories are young and relatively transient. Even long termers are more interested in getting and processing orders than understanding the product as there are other people in the factory that understand the product. The problem for most foreign buyers is that they don’t have access to those other people in the factory to discuss product due to language barriers. So you end up with a situation where there is no ‘meeting of the minds’. The customer wants a certain price but is willing to accept certain changes in return for that cheaper price. The factory manager is willing and able to make changes to meet a price. The problem is that the sales person does not understand this and does not communicate it effectively – so the factory manager thinks the customer wants the factory item and rock-bottom prices, while the customer mistakenly thinks that product and price don’t match up.

4.       You can’t compare apples with oranges. A further problem is a situation whereby the customer is expecting one quality level and the factory is pricing for a different quality level. This often comes about when customers and suppliers do not communicate clearly. Far too often Chinese suppliers send out prices with only a vague description of what the product is. This is a huge mistake in my mind. If you are making furniture don’t just tell the customer that it is made from metal and gl *, tell them the size of the tube, the thickness of the metal sheet, whether the glass is safety tempered glass or not etc. Of course the price for a coffee table made from 18x18mm tube, 1.0mm thick, and with standard 8mm glass will be MUCH cheaper than the same coffee table made from 25x25mm tube, 1.2mm thick, and with 10mm safety tempered glass!!! But if you don’t tell the customer what your product is made from clearly then it is possible that your quotation will be considered too high because the quotation from other factories are much lower. Different products, different price! Apples and oranges are not the same thing.

So sales people in Chinese factories I really recommend that you spend time discussing product and price together with customer. Listen to what the customer wants. Ask relevant questions. And then give a modified price and most importantly of all state clearly what your price is based upon!

Quoting from [Egernia]:

3.       Sales people have no knowledge of their products! This is not always true but is true in far too many cases. Foreign buyers are not stupid – well this is not always true but true most of the time! So assuming that they are not stupid and that they understand the product that they are buying then the supplier’s sales person should be able to clearly articulate the selling points of the factory. In most cases sales people in factories are young and relatively transient. Even long termers are more interested in getting and processing orders than understanding the product as there are other people in the factory that understand the product. The problem for most foreign buyers is that they don’t have access to those other people in the factory to discuss product due to language barriers. So you end up with a situation where there is no ‘meeting of the minds’. The customer wants a certain price but is willing to accept certain changes in return for that cheaper price. The factory manager is willing and able to make changes to meet a price. The problem is that the sales person does not understand this and does not communicate it effectively – so the factory manager thinks the customer wants the factory item and rock-bottom prices, while the customer mistakenly thinks that product and price don’t match up.

4.       You can’t compare apples with oranges. A further problem is a situation whereby the customer is expecting one quality level and the factory is pricing for a different quality level. This often comes about when customers and suppliers do not communicate clearly. Far too often Chinese suppliers send out prices with only a vague description of what the product is. This is a huge mistake in my mind. If you are making furniture don’t just tell the customer that it is made from metal and gl *, tell them the size of the tube, the thickness of the metal sheet, whether the glass is safety tempered glass or not etc. Of course the price for a coffee table made from 18x18mm tube, 1.0mm thick, and with standard 8mm glass will be MUCH cheaper than the same coffee table made from 25x25mm tube, 1.2mm thick, and with 10mm safety tempered glass!!! But if you don’t tell the customer what your product is made from clearly then it is possible that your quotation will be considered too high because the quotation from other factories are much lower. Different products, different price! Apples and oranges are not the same thing.

So sales people in Chinese factories I really recommend that you spend time discussing product and price together with customer. Listen to what the customer wants. Ask relevant questions. And then give a modified price and most importantly of all state clearly what your price is based upon!

G'Day Mate,

I am in tune with you thoughts.

We always ask lots of questions and consult with client. Every aspect and at every stage our clients are fully aware of each activities. To a point where we are transparent on the costing and what margin we make with our clients. This is all well and good once you've gotten yourself acquainted with the clients. However if they are only at a prospect stage you don't even get that luxury of communication.

Quoting from [Remus]:

Good communication can resolve most if not all issues. But you only get that once they become clients.

Unlike clothing or chairs, where you can see and feel everything, electonics are more complicate as buyers only see the outside. While inside there are hundreds if not thousands of component they don't see or understand.

We alway state that we welcome and prefer dealing with professionals as they can understand the difference and would help raise the standards. But all too often buyers are not at all knowledgeable. Hence, they take one look at the price and vanish.

While it is true that most sales people don't have knowledge, even the ones that do have a tough time communicating with clients or are able to convey a clear message.

Regardless of the outcome we shall always pursue quality. Even as cost of materials and labour cost increased. Customer are reasonable if you are open with them because find a good, honest, reliable and dependable supplier is no easy feet these days.

 

 

P.S. The 4000 word limit is really a pain. Just having a whinge...lol