Saturday, November 25, 2017

China is still export company oriented exportation situation.

As China’s exportation increased since last 20 years,factories’ export oriented mind changed from positive to negative. 7 years ago, hearsay’s goods exportation could make money have a coordinative agreement upon 80% companies,now only 5% good operated company thinking exportation could actually bring them profit.

China have a larger inland market,the inland demanding are increasing and goods quality demanded high. To most factories,7 years ago 90% above of the goods are exported to overseas and 10% flowing to inland markets,as its well-know china is the world’s factory at that time.Now,more factories begin to realize:doing goods is to make money,not showing to others’ they’re doing a gigantic quantity,how great they are! But actually,they couldn’t make a cent but wasting their life’s time. Comparing to overseas’ market,China’s inland now gradually possessing a larger share of their sales and increasingly accumulating to a proportional profit.Before, selling to overseas in half the price of inland sale being an acceptable fact due to a more considerable quantity,now most foreign buyers couldn’t offer a considerable quantity,but keeping asking the same low price.My 10 years exportation boss friend told me:they’re extremely harsh on slashing price,they don’t understand i actually gave them our rock bottom price in first quotation,but they still press the price lower and lower,what’s a meaningless thing to do an unprofitable order? To Us,that’s the same thing. Competition keen,we all know,we also understand our clients business and their local market competition, so we all take that into consideration,when we could quote a 5dollar profit,we quote 1 dollar,but client seems don’t understand,they’ll still asking a 5 dollar low price more,what can we do? 80% above local factories are unwilling doing exportation now,there have risks,they said,most exportation goods are in very minimum profit,which made us doing very carefully in material selection,pushing low on workers’ pay,but these all based on normal production procedure. If client pushing hard on delivery time,they must work overtime,that will definitely increasing the cost,because worker’s pay on overtime is more and normally double,also without taking extra electricity and water cost. Other accidents like hot-weather and cold temperature,blackout,machine failure,traffic jam,government check are generally reducing the actual production time and increasing more on management cost,finally,the minimum profit was removed from these accidents. We’re producing orders,but we don’t make money,that’s true. Clients may ask,so why you accept the orders and doing it? A general and common saying is,i think also true to most other factories,we are doing the orders because we’re believing in our traditional thought,the client could give us the continuous order next time that could make up this time profit.

More and more factories stopped dealing with foreign buyers in recent years. Some factories have their own export department before,but now they removed it.The foreign buyers are very complex to deal with,a salespeople told,when they send me an inquiry,they also send to dozens of other exporters the same inquiry,that completely different with local Chinese culture which impress more on loyalty and single-minded devotion. On the contrary,local businessman will always keeping asking from one company,make a mutual benefit price and close the order fast.

About 75% factories in China do not have an export department directly,to them,own an export department means high price and risky.10% factories tried to make an export department but finally give up due to huge investment finally turns out nothing in return or lost money in export transaction. I would rather sell through export companies to foreign buyers,to reduce our cost and also exportation risks,one factory owner said,the government policy here are pressing us paying a high tax if we export by ourselves;foreign buyers are tough,you can’t image how harsh they will be if they receive one piece of the goods not qualified,however,if we sell the same quality to inland buyers,they’re understandable. Export companies in china are gradually more integrated with product developing,manufacturing management,and standard quality control,they design and renovate now products and have a more professional saying on products than the factory own,most importers could get a lower price from the export company rather from the factory itself due to above reasons.

The difference between local sale and overseas sale is mainly trust. Local persons here could meet more frequently, however, as China’s law pushes hard,people feels more safe and trustable,still more business was made without seeing each other face to face. As for overseas business,one sales manager said,i feel so honorable when he send us the order without seeing my actual face,i think that’s really great for two people in different countries,in different cultures and in different blood-type and skin color,that’s an exciting thing in exportation,means more than making money. 

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