Dear Expert,
I'm trading with chairs from Anji . I try to reach supplying my company with 4/5 containers 40Hq office chairs per month / 1 mixed and rest single model per container. But I have problems with all factories :
1. THey are sending quatations with normal prices / even more expensive than last orders.
2. WHen you decide to order : they again increase prices with min 5 %
Also nobody didn't care about long partnership. THey want to take your money and didn't care for you.
Please, give advice what to do !
Also I give some names of the companies who do like this.
Anji is a good example of how the Chinese system of similar factories in certain areas can fail.
It is pretty typical in China for factories making the same products to congregate together. Anji had about 20-30 office chair factories only a few years back but now they are probably up to a couple of hundred factories.
Some customers like these 'chair cities' as it is very convenient to find factories, but that convenience seems to have two effects:
a. It makes customers less loyal as it is very easy for them to switch factories;
b. It makes the factories very cut throat, with factories competing on the most obvious point which is price.
It would be nice to think that a professional factory that kept its promises and acted professionally would get all the business in areas like Anji. The idea that customers would reward the factories sincerity with loyal and long term business. Unfortunately that does not work in the competitive areas such as this one.
It is all about price in Anji and the factories know it.
So they offer prices that are unbelievably low - and unfortunately they sometimes cannot deliver on those prices. Sometimes this is deliberate deceipt to secure orders and sometimes their prices are so low that they cannot absorb material price rises etc.
My only advice to you is to avoid the lowest possible price and concentrate on a fair price. Make it clear to your chosen factory that you know the factory down the road can do a cheaper price but that you have chosen their factory even though their price is higher for a reason.
It is important to order quickly once you get a good price as price validity is not good these days. Ask for quotations in RMB so that you can at least get stability on factory prices and you can then worry about the exchange rate yourself.
Anji is a good example of how the Chinese system of similar factories in certain areas can fail.
It is pretty typical in China for factories making the same products to congregate together. Anji had about 20-30 office chair factories only a few years back but now they are probably up to a couple of hundred factories.
Some customers like these 'chair cities' as it is very convenient to find factories, but that convenience seems to have two effects:
a. It makes customers less loyal as it is very easy for them to switch factories;
b. It makes the factories very cut throat, with factories competing on the most obvious point which is price.
It would be nice to think that a professional factory that kept its promises and acted professionally would get all the business in areas like Anji. The idea that customers would reward the factories sincerity with loyal and long term business. Unfortunately that does not work in the competitive areas such as this one.
It is all about price in Anji and the factories know it.
So they offer prices that are unbelievably low - and unfortunately they sometimes cannot deliver on those prices. Sometimes this is deliberate deceipt to secure orders and sometimes their prices are so low that they cannot absorb material price rises etc.
My only advice to you is to avoid the lowest possible price and concentrate on a fair price. Make it clear to your chosen factory that you know the factory down the road can do a cheaper price but that you have chosen their factory even though their price is higher for a reason.
It is important to order quickly once you get a good price as price validity is not good these days. Ask for quotations in RMB so that you can at least get stability on factory prices and you can then worry about the exchange rate yourself.