Entering into the China trading market (from consulting)

We are a consultant company specialized in branding and product development in apparel and home textiles, most of our clients are mass retails in Latin America.  A lot of opportunities have come since I moved our office to Hong Kong; one of them is to trade, most of our clients want us to buy-sell rather than just consult. So we think we have to get in to that business but we are new to it, so we think we need somebody that can help us with production and the quality control.  Do you have any suggestions or know where I can get more information about the subject?

Congratulations on your business growth in HK.

Here are my comments for your consideration as you explore moving beyond consulting and into trading. As a rule of thumb, consulting has lower risk but lower reward. Trading is very risky because you have to manage two buy-sell relationships. One between you and the Chinese supplier and the other between you and the foreign customer. If you engage in trading, then you, rather than the supplier, are bearing the risks if quality, lead time and price have problems.

If you want to try out some trading, I highly suggest you start small and learn the ropes.

You also asked where you can find support/information. I have a few suggestions.

1. The China Sourcing Information Center (the not-for-profit organization where I volunteer) has a monthly e-magazine called the “China Sourcer” which is a great monthly resource that is free of charge. It is writing by buyers for other buyers and will cover many of the topics relating to how to find and manage suppliers/agents in China should you decide to get into trading.

2. Global Sources’ Smart China Sourcing is another excellent free resource.

3. You said that you need somebody to help you with issues of vendor coordination and quality control as you are not sure you can manage on your own the vendors in China. You will be happy to know that there is a list of endorsed service providers. Feel free to contact them directly. You will find not only sourcing agents and inspection agents, but also a whole list of other services ranging from due diligence to engineering to business formation. All services that buyers in your situation may need. Regardless if your outsource these functions or do them in-house, it is important that measures be taken to select the right vendors, manage the orders and ensure quality product leaves China bound for your customers.

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