Everyone commit mistakes especially if it is the first time to do the job. However from these mistakes we can learn lessons that will help us to minimize mistakes to save money and time.
What are some of the most common mistakes that first time importers make and how can they avoid these mistakes?
Mistake #1 – Asking for Shorter Lead Times
This is where most importers commit mistakes. Never ask the manufacturer to rush the manufacturing process otherwise if the product does not have the quality that you expect you will be having a hard time in returning it to the manufacturer.
The manufacturer now has good reason not to accept the low quality product because you did not give them enough time to manufacture the product.
You may not be entitled anymore to a possible recourse for the reason that it was your will to speed up the manufacturing of the product. Furthermore, the product will be stocked and cannot be sold anymore because of the mistake that you have done.
Although it is not easy to wait the whole process of manufacturing but if you know that you will going to receive a good quality product and will satisfy the needs and demand of your customers the waiting is worth enough.
To avoid this mistake to happen, don’t rush your manufacturers. Let them provide the timeline and make it sure that they will meet the time.
Mistake #2 – Not Factoring In Currency
Generally you should sign your contract in USD. Some factories may insist on renmenbi, but you should also insist that the payments be made in USD and try to lock in that clause as long as you can.
Currencies are changing. At the moment, the USD may not have a big value whereas China’s renmenbi is getting higher. Thus, signing a USD contract is definitely in your favor.
If you can’t get a USD contract, then make sure you factor in currency costs, both in currency exchange charges and in the potential fluctuations in the future values of either currency.
This could be the difference between profitability and operating at a loss. Make sure you take these factors into account.
Mistake #3 – Poor Lines of Communication
If you are working in directly in a factory, you have to speak Chinese and if you don’t know how to speak Chinese, hire someone who speak Chinese or look for a company where workers or somebody can speak English, but unfortunately it is seldom to find such kind of company.
You should not make an agreement for a project if there is no clear and effective communication with the manufacturer.
In the beginning it seems that everything is OK so you want to continue with the negotiation but as you go through you will determine that it is really good. You will not be able on your way because of the misunderstanding of the process.
Another option is to work with import agent who can speak both English and Chinese and can help to resolve any issue and can establish clear expectations for both sides.
These are the 3 of most common mistakes make of first time importers. Avoid these mistakes and you’ll save yourself a lot of headaches throughout the process.