Middlemen have not always had a good name. I have often wondered why until I became one. In the mind of most businesses, typically, a middleman stands between the buyer and supplier when it comes to the best price. When it comes to sourcing product from China, there are plenty of Chinese middlemen welcoming your business, and there are plenty of reasons why to use a U.S based middleman with experience that is well worth a little extra cost.
When doing business in China, unlike in the U.S., you may never know what you are getting. This statement comes from over 10 years of experience dealing with the Asian suppliers. The key to dealing with Asian suppliers is to have complete control over your supply chain; if you don’t, you have now idea what you are getting.
Understanding this principle stems from the knowledge that the Asian businessmen will say YES to almost every request. It is not in their gene pool to say no. “Yes- we can do it” is said more in the Asian culture than “what’s on TV” in American. The challenge for American Printed Circuit Board buyers is where and from who is your product coming from. The Asians are excellent logistics and networking specialists. They either have a family member or a friend in the business of something and YOUR product may go to anyone of them.
Case In Point: Years ago, when entering the Chinese manufacturing market, we had a trusted relationship (or what we thought was a trusted relationship) who was a PCB supplier actually give us documentation for supplier A. They stated they were the factory and were owners and part of the relationship. It soon came to our knowledge they had fudged the UL logo from another factory along with all the paperwork. It turned out that they claimed the PCBs were built in one factory but in fact were built in another factory with the original factory’s UL logo on the PCB and paperwork were doctored. Needless to say we terminated that relationship. It was a brutal awakening to the methodology of how the Chinese go business. There are thousands of middlemen in China shipping out your product to any type of supplier that can meet the price and delivery. You will not know until it is too late if you are really dealing direct!
It is key that if you are sourcing anything from Asia that you have control over you supply chain. PCB Solutions visits China up to, and sometimes more than 4 times per year. We review IPC1710 documents. We conduct quality audits on the factories. We meet the president of the suppliers and insist on following our product through the process flow- forced Honesty and Integrity if you will. We negotiate payment terms (typically unheard of in working with Asian suppliers). We meet the staff and set our expectations…
So the next time you get the itch to get rid of that U.S. based middle man and play roulette with suppliers emailing you daily, think about what happens when a significant quality issue arises or if you have paid 50-100% of the cost of the product upfront and you have no leverage for a return. Did you consider the cost of wire transfer fees into your costs? How about exchange rates, shipping costs, supply chain control, customs, duties, communication, English skills of the supplier, engineering support, quality of the factory, etc…on and on.