Sourcing & Import from China Tips and Guide

Opportunities To Boost Your Profits Into China Rural Areas
Tier 1 cities in China are mainly Beijing, Shanghai and Guangzhou where most of the major enterprise had sunken their teeth long ago. However China had more than hundreds of cities which was considered Tier 2 with population of more than 1 million each which represented untapped massive market potential. In this article, an overview of how we can tap into this massive scale of abundant resources are discussed.

China with her growing population can be categorized into three basic zone, newly developed area, developing and rural areas. Unlike other nations where the gigantic enterprise just wrap up and uproot themselves and move to lesser developing places to leverage on lower human and operating expenses. China had it unique advantages to progress inlands. In facts, million of rural workers dynamically relocate to urban cities to seek better employments vehemently as part of their birthright. Many had encountered differential degrading working conditions and wages as compared to their urban peers.

Chinese authority is facing a delicate situation of balancing aggressive growth which concentrated along the coastal area and inner rural developments, the social fabric and infrastructures represent a critical factor of which if uncontrolled will led to massive scale of instability which may weaken the Chinese superior competitive edges as a whole in her efforts to attract foreign investments.

Early signs were detected when the factories in golden triangle area discontinued production when their laborers who most if not entirely return to hometown for holidays and decided not to return to work as they found better jobs at home. Certain industries in the coastal areas also didn’t received warm welcome as before by the local administrative especially if they are involved in high energy consuming and environmental polluting activities. Many need to take turn to schedule for production shutdown due to rationing of energy resources.

In fact, the Chinese Government encourages many well established manufacturers and retailers to explore inlands as an effort to balance prosperities and growth between urban and rural areas. Big names operators like P&G and Danone had restructured their luxurious and imported products and services to cater for the less fortunate rural consumers with lower cost packaging and materials. For example, branded soft-drinks cost only 30% more as compared to local made equivalents.

The race to remain competitive also had significant impacts to big scale manufacturers where thousands of rural workers are given accommodations and meals to offset the higher standard of urban livings. Thousands of unskilled and semiskilled workers sleep, eat and work 7 days a week virtually at the same location to keep up with the production outputs. Better terms are negotiated between the management and workers to avoid losing the work forces back to their respective home towns where conditions are improving dramatically on a daily basis.

Cultural heritages had trained many supervisors to be aggressive where verbal and mental abuses, such as shouting and rude manners to achieve their production outputs with their operators. Physical and heated arguments are not uncommon scenes one can expect to find in thousand if not hundred of thousands of manufacturing facilities scatter all over in China.

With increasing pressure on infrastructures on public transports, private cars and living conditions, the lures of seeking an employment in urban area had started to lose ground. Matters are made worse as due to the communism system, the local district practice profits sharing among it registered residents where thousands of RMB are distributed as a results of rental and land incomes. Many were doing pretty well and travel overseas regularly whereas their rural counterparts can only hope they are never born. All Chinese residents are registered with their respective territory account and relocation had to be approved by the relevant authorities. The contrast of an urban and rural Chinese in terms of their respective employment, education and financial status had never been so obvious before.

Management of their fellow rural and urban citizen’s expectations become a top priorities as nobody likes to be left behind in the full steam of growth Chinese had experiencing for the past few decades. In the past, everyone was being assigned a job and accommodation by the state own enterprises and with more than 500 of them declaring bankruptcy last year alone, many had been “exiled” into the free enterprise market to take care of themselves.

So, how can an individual like you and me take advantages of this wind of change?

1) One can start sourcing higher margin products from the tier 2 manufactures where their overall operating cost are lower where the quality standards are preserved.

2) One can joint ventured with manufacturers which are operating from rural areas to leverage on the increasing bargaining powers.

3) One can negotiate with lower cost products if you can identify their lower cost of producing the goods based on the manufacturing location

4) One can repackage products with lower packaging and materials cost to cater for the massive rural markets where the volume can make up the shortfalls in lower price.

5) One can identify manufacturers with high potential to become as big scale as their urban counterparts to groom the relationship to grow with them.

6) One can invest on the local rural properties with potential of extremely handsome returns in long run.

Believed it or not, some Taiwanese manufacturers who had set foot in China more than a decade ago had reap in huge profits with the escalation price of lands. In other words, these entrepreneurs make the seemingly unrealistic explosive fortunes from the warehouses, lands, shop-houses and factories they acquired in the course of running their business.

In summary, the same opportunities had already presented itself on rural areas exactly like what had happened 20 to 25 years ago in urban areas. One can regards China as a mixture of countries in varying stage of economic progress where the same language and system is in placed. With improving transportation on land, sea and air, another wave of China made products which swipe across the globe like nobody business is highly possible in the next 5 to 10 years. Remember the remote controlled cars which could easily cost a fortune 10 years ago, now they are made so affordable and everyone can afford to buy one for their kids. China made automobiles, heavy machinery, consumer products and even aggressive Chinese businessman are everywhere. Like what someone told me, if you cant beat them, join them.

By David Foo

By David Foo
Author is the founding member of the of the
Free China Manufacturers Directory To be downloaded here
http://www.chinawholesalesourcingguide.com/12aszx/09-zx3/MadeInChina_Magazine16.exe
http://www.chinawholesalesourcingguide.com/
http://www.singapuraproperty.com/
http://www.china-buysell.com
More Articles
http://www.chinawholesalesourcingguide.com/Article_index/articles.html

Jews Versus Chinese And How To Take Advantages of Them
By David Foo

Jews and Chinese businessman are two main category in this modern world since centuries, they had strong resemblance and yet drastically different on their approach to business. Both had many world class enterprise operating at all different corners of the competitive global market place. Doing business with them required great wisdom and patient, in this article, the contrast of instilling moral values on their respective descendents in their families are observed and opportunities to take advantages of them are discussed.

Chinese as Jews placed priority in educating their generation, Chinese encouraged instant observable and comparable academic performance on practical subjects such as engineering, finance and science where one can assure better chance of drawing respectable source of income in their chosen profession. Jews on the other hand comprehend the crucial survival skill sets to continue their heritages values and therefore branched into social sciences, psychology and literatures.

Chinese adopts shamelessly on the operating models which guaranteed financial rewarding lifestyle rather than preserving traditions unlike Jews, Jews ensures family observing traditional events to implant exceptional experiences to their young children what was it like few thousands years ago. None of the outstanding Nobel price winners are from pure breed Chinese, In fact they are tons of Chinese who had been localized such as American Born Chinese who behaves and operate exactly like a typical American.

Chinese compete fiercely among each others on academic performance to stand a better chance of economical success. Behaviour rather than values are rewarded, they seldom pursue the arguments with any great degree of persuasiveness and insistence. Jews chose wisdom over school results to stand higher chance on making the right decisions in all aspect of their life.

Chinese are generally not united as self interests hold the ultimate importance whereas Jews controls the 20% of the world wealth with an overall population of less than 20 million globally they did pretty well using their international connections

Chinese committed to avenge the world by inspiring accumulate as much wealth as possible within their lifetime, the world owed them a living and they will not hesitate to try all means to put their hands into others people pockets. Many were brought up having their parents urging them to get rich. Jews knows their place as the God chosen people and preserving their leading roles by being financially aggressive in the world market.

Chinese worships idols who bring great prosperity. They turns to any objects or person who hold the keys to wealth. In other words, money becomes their Godlike obsessions. Jews likewise observes the commandments God had commanded, they discarded non-Jews and impose strict controls of eligibility of becoming a Jews and therefore they are united as all Jews of different ethnic group from Germany, Middle-east, America and other parts of the world had the same set of moral values.

Chinese like Jews were prosecuted since centuries and unlike Jews Chinese has always been on the run from famine, war and political oppression, as a results, wealth becoming the hard currencies to buy their ways out when needed, all things related to moral and ethics become secondary. Jews had also suffered many genocides to a greater extend of which had make them even more God fearing and steadfast.

So, what it got to do when it comes to doing business with Chinese? It pays to understand how Chinese think and what are their fears and inspirations. Following are some tactics you can probably use to take advantages of.

1. Chinese are self centered and profits driven. You can always negotiate with a lower price with other Chinese competitor to enhance your buyers bargaining powers. Chinese competitors undercut each other cruelly.

2. Use their fears to your advantages by threatening to switch to others source or suppliers, they cant afford to lose your business even if it means lesser profit margins

3. Convincing your Chinese suppliers you had great potential of even more orders if they reduce their price sometimes even to below their cost price as they are too greedy to refuse this opportunities

4. Propose lucrative incentive for the individual salesman if they can meet your pricing targets, most salesman will take advantages of this for personal gains and therefore putting their organization’s interest as 2nd priority. This so call “kick back” approaches are widely practiced even among themselves.

5. Making your Chinese suppliers proud by complimenting on the superior cultural backgound, how Chinese product had helped the world economy, Chinese does place a premium on friendship and will be willing to quote you lower price.

6. Take advantages of building strong relationship with as many customers and suppliers alike, showing off your personal ties with other prominent contacts will normally rewarded with a lower cost price as they value their reputation as being a reliable and competitive suppliers to make sure doors are open for others.

7. Be humble and friendly, due to strong inferior complexities suffered for many years, Chinese suppliers can be defensive to maintain their presumably superior cultural heritage, a humble buyers begging for price reduction will produce good terms in your favors.

In other words, you can use your advance understandings on the Chinese businessman to negotiate for a better deals for yourself, however please bear in mind that they are also ordinary people like you and me who can be your good friends as well, they will go great length to meet and even exceeds your requirements.

All the best on your business ventures and do take a trip to China for one of those world class exhibition trade shows. You must see it to believe the massive scale of the way they do business nowadays in China. After all the dragon had waken after many years.

By David Foo
Author is the founding member of the of the
Free China Manufacturers Directory To be downloaded here
http://www.chinawholesalesourcingguide.com/12aszx/09-zx3/MadeInChina_Magazine16.exe
http://www.chinawholesalesourcingguide.com/
http://www.singapuraproperty.com/
http://www.china-buysell.com
More Articles
http://www.chinawholesalesourcingguide.com/Article_index/articles.html

Proven Effective Ways To Prevent Being Mugged/Extorted/taken advantages/scammed By Chinese Perpetrators

By David F

Almost everyone can relate a story or two of being taken advantages of while traveling or working in China.

The arts of ripping people of aren’t restricted to China alone, it had been around since Eve was persuaded to take a bite on the forbidden apple. However, the highly skilled and talented con artists are few and far between and they go for the big boys rather than you and me. So, there are ways we can use to avoid becoming the next victim as we are dealing with the ordinary criminals.

More often than not, by the moment you feel something aren’t right, the perpetrators had vanished like mist evaporating in sunlight. It’s all the matters with perfect timing, one is most vulnerable to make mistake during the first 5 minutes of engagement. Presumably due to the initial stage of hesitation and judging process which take times to ring the alarm.

“They are very persuasive”, “He seemed to be an honest person” are the standard feedbacks or excuses by the victims. Well, people tended to blame it on others for their own mistakes, inclining to draw the conclusion that this con man is too good to be beaten. The myth was they had plenty of practices and rehearsal before casting their spell on you, using the usual standard modus operandi. As a result, Arming with the following discussed tactics and some practice you do have ways to beat them at their own game.

Sparing you some of the sordid details of the actual events occurred or happening right now in massive scale all across China, following are some of the proven effective tactics you can use next time if you come across someone who approach you while you are minding your own business in China. It pays to be prepared. At least rehearse the situations mentally, what should you say? how to say it, what body language to use and so on….

Cut the long story short. We can avoid becoming a prey of their trade by embarking on the following strategies;

Body language: Well, it’s a little rude but it works as the simple gesture will avoid having your own personal privacy invaded which serve as a firewall against most of the imminent threats. Yes, you guess it right, by holding up your arm with a stopping gesture to the perpetrators just started to walk toward you implying of “stop right there, I’m not interested to even have anything to do with you”. Most of them will stop dead on their tracks thinking that “This chap is with an attitude, better move on to other potential prey”

Delay the Proposition: This tactic works by breaking the pattern of the perpetrator’s punching lines making him or her frustrated and disturbed. How does it work? Yes, just say with a tone of urgency “Wait a moment”, and pretend to be in a deep though, repeat it again if he or she tries to engage you in the conversation, when time is right, depart the avenue

Diversion: Ask for directions for local restaurant or hotel when someone stop you in the middle of your walk, comment on the traffics and lock your eyes with his or her to dismantle their intentions, they are scared too when carrying out their sinful deeds, by having a good look on their features and diverting their intentions they will lose interest in you and move on.

Distraction: Similar to diversion, distract the chap with your mobile phone by conversing loudly on it, when he and her still linger around, start shouting with angry tone on the phone pretending you are really angry and agitated by having exaggerating hand gestures. The fellow knows you will be too emotional disturbed to be conned.

Offensive: This is easy, turn the table around by selling him your trades, for example, I will start my punch line on replica Rolex watches that I distribute, ask him for his contacts and try to convince him I have the best price of the town, and he or she will lose interest and run away from you.

Okay, if you have been to China, you know what it’s like over there, people on average won’t be too polite and one can easily spot verbal if not physical arguments on every corners of the street. Chinese in China are well known for their aggressive attitude of fighting for their fair shares; they are outspoken and street smart. To deal with the con man (it’s only a tiny fraction of them like in every other community), one needs to be unpredictable. In other words, some acting on your parts will be helpful to eliminate the potential threats.

Rehearse these tactics mentally and you never know you might need to use them someday.

By David Foo
Author is the founding member of the of the
Free China Manufacturers Directory To be downloaded here
http://www.chinawholesalesourcingguide.com/12aszx/09-zx3/MadeInChina_Magazine16.exe
http://www.chinawholesalesourcingguide.com/
http://www.singapuraproperty.com/
http://www.china-buysell.com
More Articles
http://www.chinawholesalesourcingguide.com/Article_index/articles.html

Perhaps next to prostitution, conning as a profession could be regarded as the oldest trade around since day one unchallenged. Nothing beats the easy money reaped by the professionals, they encroach our daily affairs without single trace of audacity.

We were all being taken advantage by the Con man one way or another. Many of us just too ashamed and angry to warn and share with others especially risking being a laughing stock. Its everyday affairs, from paying too much by high pressure selling for products and services your didn’t actually need, not getting the 100% benefits claimed by the salesman, ripping of by the merchandisers on discounted items, shoddy overpriced tour packages where you charged to your credit cards.

I’m sure you can related to these stories or even had a story of your own to tell. Today, I would like to share with you the contemporary tricks used by the Chinese Con Man and how to avoid giving your money or valuable away for nothing in return. Either in your hometown or when you finally making your first maiden trip to the awaken dragon of the east: China. Scams related to Chinese Con Man are a thriving enterprise, lubricating the gigantic wheel of change in China.

1. ATM card cloning: An organized syndicated installed hidden video camera on the ATM enclosure to capture your pin or using adhesive to jam your ATM card for later retrieval

2. Lottery/Lucky Draw: Organized ways to build credentials with siphoned bio-data on a survey conducted earlier, the perpetrator surprise the victims as the lucky winner of a recent draw. They went all way to solidify their trustworthiness, sometimes to the extend of having a synchronized testimonial standing by to clear one doubts, some even had people to receive you in style should you choose to visit their establishment. They demanded deposit from you in a variety of excuses before one can claim the prize.

3. Legal affairs: Using pre-recorded phone messages mass broadcasting to common folks for violation with the local authority, victim who fall prey and chose to speak with the officer will be offered for out of court settlement. These operators were experienced and will threaten the victims with tone of urgency to coerce you to hand over the money through wire transfer. They kept occupying your phone line to prevent you from calling out to ask for advice and help. With conversion of probably 5 to 10%, it’s a lucrative business model. 100 calls, 10 responded, 5 ended up being scammed.

4. Begging: Handicapped individuals controlled by syndicates who operate with 10
to 15 professional beggars with profit sharing scheme. They were chauffeured and accommodated and apparently some had more saving in their bank account than you and me.

5 Scratch and win: Door to door salesman soliciting victims on a persuasive pretext of high value lucky draw opportunities who then coerce the lucky star with grand prices as bait in purchasing many explosive marked up useless products together with high pressure selling. The “lucky” one often ended up with tons of junks paid with premium prices.

6 Business Venture: Often proposing irresistible lucrative business deals where
buyers, sellers and middleman except yourself are all in the same gang. They befriended you and showed off their easy ways of ripping victims of as baits and suggested to count you in. At the beginning, exhortative profits were shared until one got hooked and decided to put in all he had.

7. Multilevel Marketing: No doubt there are genuine operators which distribute
genuine physical products. Many others relaying on member’s fees to sustain the hierarchy. With unbeatable profits guaranteed often in a range of 50 to 100% many fall prey into this scheme and never saw their money again.

8. Yes, last but not least, the sexual entrapments. This one is so effective, it seldom
fails to generate tons of money for the perpetrators. By seducing a married and well-of man to an affair and use this for extortion.

There are many more similar Chinese scams and the theme keep changing but one thing for sure if you wouldn’t want your money be exchanged hand against your will, remember this, if the deal is too good to be true, it probably is. Always listen to your hunch as you be surprise our first hunch is pretty accurate. The trick is avoid engagement in the first place, learn to detect the suspicious proposals and avoid it at all cost. If you do get into the first initiation stage, call your friends, relatives for help, the risk is too high if you handle this all by yourself.

Do not think for a moment to contempt the con man as they are professionals and had many resource and tactics to lure you to their many attractive baits. Anything that tackles your greed, sympathy and sexual desires are mostly scams. Many people actually knew but were too defiance and ended up paying the price and kept it to themselves instead of warning others, The con man knows our weakness and take full advantage of it laughing all the way to their banks.

Illustration
========

Following are some of the illustration for your references. (on the phone)

Him: Congratulation, Mr. Bosso, you just won our first price on our annual lucky draw!!!!!
You: Oh, great, where are you calling from? (Find out their background)

Him: We are from XXX corporation, we just completed our annual draw and you are our top price winner, a new Mazda 626.
You: Wow, thanks, oh. Hold on, I got another line. ( Keep the caller waiting for 2 mins, many will move on to another target and hang up)

Him: Mr. Bosso, we are so excited to present you the new car but to claim it we need you to deposit the duty fees right now otherwise your entitlement will be forfeited
You: Wow, oh no, my cell phone battery’s juice is running low, hello? Hello?
Hello? ( Pretend losing the other party and cut the line). Google the XXX corporation and call the mainline to enquire if there is such a lucky draw really took place.

By David Foo
Author is the founding member of the of the
Free China Manufacturers Directory To be downloaded here
http://www.chinawholesalesourcingguide.com/12aszx/09-zx3/MadeInChina_Magazine16.exe
http://www.chinawholesalesourcingguide.com/
http://www.singapuraproperty.com/

Perhaps one of the most intimating actions is how to negotiate with a Chinese retailers when you stumble across some un-resistible products that captured your attentions.

Almost everyone who ever did bargaining before had encounters of being taken advantages of. Almost immediately you thought you had made a killing, you knew you were paying too much at the next shops but it’s too late at a non fixed price market place. No refunds, no exchanges, once cash exchanged hands, that’s it.

Women tends to bargain a lot better than man due to their delicate and aggressive nature, I believed women derive extreme satisfaction even close to an organism when they successfully clinch the best deal of all and when they hysterically shared with their friends. In fact, most shopping places will have their business closed down if there aren’t women shoppers around spending either their but most of the time their husband money.

We must understand how these Chinese businessman established their retails networks, They had probably dealt with hundreds of tourists buyers like yourself on a daily manner. They had seen it all and had shared insider information with their competitors. Basically they way they operate is adopting dollar averaging selling tactics. They treat most foreign buyers as big fishes, trying their best to lure you to their baits and tug the line in slowly for the final kill.

They assess you for your spending power and age group, how keen you are interested in their wares and just try their luck with an asking price of few hundreds if not thousand percents of the cost price. From previous experiences, they knew the conversion rate, meaning how many people will actually pay for that prices without any negotiation.

The ball will be on you to bargain, most didn’t dare and even felt embarrassed to go too low and will be extremely thrilled if one able to make the kill at 50% discounts and go tells everyone about it. As a matter of facts, 9 out of them had already been ripped off and will never knew about it. However, when the Chinese retailers countered some hard balers, they will then settle for less, leveraging on dollar averaging selling, a certain level of margin model can be sustained.

Sure, business needs to have profit margin to thrive. Depending on the rental and thus the location and volume, some managed to achieve decent margin, some at extorsive levels.

Unlike in Japan, where all the products are fixed with listed prices, China businessman tends to be more scheming or perhaps enterprising. Following are some of the tips to help you to negotiate effectively even with just a calculator, hand gesture and some serious acting.

1. Snoop around on your favorite items and persuade your friends or other members on the tour to join force to increase your bargaining power; group buy.

2. Team up with your friends to distract the Chinese businessman when you are
Delivering your punch lines. (See illustration below)

3. Downplaying the value of the merchandise by commenting on its disadvantages, such as the lack of options, colors, defects here and there and offer a 25% of the asking price.

4. Referring to repeat purchases by your friends who had bought for 25% of the asking price. You might just hit the jackpot, He probably cant recall as he dealt with hundreds of sales enquiries daily.

5. If you senses you are cornered by high pressure selling tactics, you need to get out of the situation as soon as possible, stay cool and be very persistence, no, no, no, no,. no, no. it’s a patient game, they wear you out until you give in. Most resorted to dig their way out by compromising by paying a hefty premium on the products of which cost a tiny fraction across the street. Another effective way is to plead your way out. If needed, cry and tell them your sorrows. Practice before you go

6. Consult others, ask your tour guide, how much is the reasonable buying price for common souvenirs. Check online on internet of these merchandizes, there are tons of forum and discussion blogs out there to use as references. With the figure in minds, you can bargain effectively.

7. Visit the local wholesale markets, you will be surprised how much money you can saved with just the mild negotiation with the wholesalers. The rule of thumb is not to buy anything in tourist centers and high end establishment areas.

All the best on your bargaining with the Chinese Merchants, remember, this is your hard earn money, make it work harder for you. You entitled the right for a fair deal.

Sample illustration:

You: How much each?
Him: RMB$200

You: Too expensive
Him: How much do you offer ?(this is the moment with great challenges)

You: How much can you offer?
Him: RMB$190

You: Too expensive, my friend bought it for RMB$40 last week
Him: No. no. impossible, I lose money selling at this price

You: Its true, you see, this one had some defects here, didn’t look as nice. Gibe me more discount
Him: RMB$180

You: You got to be kidding, I offer you RMB$50
Him: No, no. too low, I lose money, RMB$170

You: RMB$60 for 5 of the same items, deal? I got to go, quick. (Give him pressure and had your friends distracting him with interest on appearing higher value products)
Him: Okie, Okie,. 5 for RMB65. (He wanted to go attending your friend and didn’t mind making less on this lower priced items)

By David Foo
Author is the founding member of the of the
Free China Manufacturers Directory
http://www.chinawholesalesourcingguide.com/
http://www.singapuraproperty.com/