Recently the Chairman of the Board of Advisers for CSIC, Mike Bellamy, was in Mumbai hosting the Global Sources conference on China Sourcing. Mike was asked to give his opinion on the situation of the Indian buyers he met while speaking at the show and while manning the CSIC booth.
I was asked that I share my thoughts on the attendees of the Global Sources trade show in Mumbai, India from September 8th through the 10th. In short, the average small scale Indian buyers are just now cutting their teeth on China sourcing and falling into all sorts of pitfalls. At sourcing conferences in other place like Dubai, HK, USA, I occasionally hear horror stories from the buyers about how they got ripped off or quality fell short. But at the Mumbai show it was rare to hear from somebody that DIDN’T have a problem with their China orders.
Many Indian buyers had problems with their money disappearing because they didn’t follow simple rules that other nation’s buyers always follow. For example, I learned that some of the buyers who had problems were not even using a formal Purchase Order (PO), instead they simply sent an email description of what they wanted to the supplier. That is very dangerous. Another common mistake was failing to audit the factory to make sure it was legit BEFORE placing a PO. The most common mistake was that many failed to do an inspection on products before the goods ship out of China. I was saddened to see that the vast majority of Indian buyers don’t do those essential steps. I think the reasons are two-fold:
A. They are new and don’t know such steps are essential
B. Orders are small and they don’t have the funds to do inspections, audits and due diligence.
I can partially accept “B” as a reason, but in my opinion, it is better not to source than to source dangerously. Plus keep in mind that inspections and audits costs 100’s not 1000’s of USD (see CSIC endorsed service providers for options). After attending my conference, I hope no audience members will chalk up sourcing failures to reason “A”- lack of knowledge as I tried my best to educate about common pitfalls as well as best practices. Luckily the China Sourcing Information Center and Global Sources’ conference helped get the audience pointed in the right direction. The feedback from audience members has been very positive. I think this particular market more than anywhere else I have visited needs all of the education that can be made available to help them succeed with China Sourcing, and I am honored to have played a small part in the process.