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Small Buyer Beware

I have a friend in Mexico who is looking to buy 600 USBs in China with a custom logo printed on both sides. He may also need a small excel spreadsheet pre-loaded onto the USBs. He had a few suppliers that he was looking at, but I checked them and they were not registered companies. Some of them were quoting what seem to be really low prices – too good to be true. I am having trouble finding a good supplier, and I was wondering if you might have any suggestions. He is running out of time, and I don’t know if his target prices are even realistic. So far I have had some suppliers string me along and then suddenly raise the price towards the end of negotiation.

It seems that for him to get the goods through Mexican customs he will need the name, registered address, tax ID, and business license for the supplier. However, some people have suggested that I use a freight forwarder. I have never done anything like this, so any info you could provide would be greatly appreciated. I realize that this is a very small quantity, how should that change my approach?

ANSWER:

This sounds very similar to another CSIC’s reader’s situation that we helped with. Check out http://chinasourcinginfo.org/2012/03/05/fraudulent-usb-thumb-drives/

Be careful, the scam artists are targeting SD card and USB buyers, especially the small buyers because they are easy targets.

Unfortunately, at 600 units of customized products, you are not going to be able to go factory direct, but you can certainly work with traders and intermediaries who can leverage their buying power to help. Find one that has a clear track record and can give you some client references.

I’m not so sure asking a freight forwarder to find the supplier is a good idea, but if the freight forwarder, or more likely an agent, has an export license (like my company PassageMaker for example / www.PSSchina.com) then that party can be the exporter of record even if they are not the original manufacturer. That should satisfy the government requirements back home you mention.

For reference, on very small projects, PassageMaker’s minimum service fee is 16500 RMB to help set up the supply chain on behalf of the client. But there are no hidden mark ups or commissions added to the product itself, so the fee is quite reasonable.  Other agents may change a % of the PO and/or a minimum project fee on small order. Plus if they are working with a certain factory, they may get a commission built in from the sell side as well.

If you are finding it hard to hire support yet are concerned you are not managing the supply chain properly, perhaps your friend would end up saving money by checking out the advice at http://chinasourcinginfo.org/2011/06/20/too-small-to-go-factory-direct/

With I had an easy solution, but going direct to China on tiny volume of customized product is both difficult and dangerous.  You may actually get a better price and better piece of mind contacting a domestic company (distributor) back home. Do not hesitate to contact me if I can be of further support.

Question answered by Mike Bellamy, host of “Ask the Experts” at the China Sourcing Information Center.

Mike Bellamy is an Advisory Board Member & Featured Blogger at the not-for-profit China Sourcing Information Center (www.ChinaSourcingInfo.org). He is also the author of, “The Essential Reference Guide to China Sourcing” (chinasourcinginfo.org/book) and founder of PassageMaker Sourcing Solutions (www.PSSchina.com )




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