Sourcing from China in 2020 can be very lucrative if you procure the right products. Some items are easier to obtain than others, and profitability can change.
Chemicals and hazardous substances
Chemicals can be difficult to obtain. For one thing, many carriers will only ship chemicals in FCL (Full Container Load). This means that you pay for the full space of a container at sea, regardless of whether the container is full or not. This is because a chemical that comes out of the package does not damage other people’s products when FCL is shipped.
It is difficult to get a lot of chemicals through customs. Potentially dangerous materials are more strictly regulated and can be more difficult to obtain.
Chemicals and liquids cannot be shipped from China by air and must be manufactured by sea.
MOQs for products with chemicals are often high. Many FDA-certified factories in China do not want to manufacture custom formulas unless the order quantity or value is worth the time and effort.
When sending samples to China, be aware that even if the product contains no chemicals but is used with them, the product may be labeled as a prohibited item.
China Air cargo
With Covid-19, deliveries of personal protective equipment from China to the world have increased massively. As a result, air freight costs have also increased.
Sea freight has therefore become the shipping method of choice for many.
Labor-intensive items from China
Products that require many hours of assembly or processing are always a good option to get from China. Their infrastructure and manufacturing capabilities enable them to mass-produce products at an unprecedented level.
We have found that even with current tariffs, most items remain the cheaper option than their neighboring countries like Malaysia, Vietnam or Cambodia. China’s labor force and capacities are lacking in these countries.
Product design, DFM and prototyping
Chinese engineers do not have the expertise that European or American engineers have. These engineers will be more attuned to how products can be made compliant in America or Europe. Most products have to go through some product tests to be certified within countries. There are not many engineers outside of America or Europe who are experts in these processes.
Factories in China also don’t offer Design for Manufacturability (DFM) reports. DFMs are an assessment of how easy it is to manufacture a product, with recommendations to improve the design to make it easier to manufacture.
Some engineers quote “manufacturers to determine the material” or the like on material labels for new designs. It is better if you let the technician specify the material than the factory estimate. Even if the factory understands what the part needs to be used for, it doesn’t know how it affects other components of the part or how it affects product compliance.
For this reason, it is recommended that you do all design work locally.
Prototypes can continue to be manufactured in China and at effective costs.
Sourcing, product design and trustworthy expertise
Here at Global Trade Specialists, we use these tips and techniques to help our customers get the most out of their sourcing efforts. From the new product design and prototyping to the better import of your existing products from China, we support you in all product procurement processes.
