We have visited 3 laptop and tablet PC factories since being here. Now is probably a good time to mention that pretty much everyone from the guy on alibaba.com to the guy in the market trade stall says they are a factory, the reality is very different. We visited a television factory last week that turned out to be an office with empty boxes in quoting us 500 USD per set with a MOQ of 300 units on 32″ LCD tv’s. When I asked to see the production line they claimed it was 4 hours away and there was a power cut so we couldnt visit. My translator said afterwards that a lot of westerners are apparently taken in by this and place an order.
The first laptop factory we visited was a slightly better set up but again was just a glorified middle man. Let us not forget that us exporters are looking to be the glorified middle men here….. Again they could supply the product but their pricing was out of our reach due to them adding their cut. It has become apparent that finding a real factory that isn’t just assembling someone else’s components into products is pretty hard especially with epic size of this country. After much digging I found a factory that seemed kosher with semi English speaking staff on the phone.
These guys actually are a manufacturer for a large store chain in China, I visited a store selling this product and managed to trace it back to source. When I’m out and about I always look at the brand name on things that the Chinese are using be it a CCTV camera or a bicycle, if people here are using it day to day it must be half decent.
Selling laptops isn’t exactly rocket science and a lot of people are doing it for sure but like with everything, if you can offer a well specced and desirable looking product cheaper than your competitor then people will buy it. The beauty about China is that by building rappour with your point of contact at the factory and negotiating the build/price this is feasible even on a smaller order. I guess there is a bit of a black art to this and you have to think outside the box. At the end of the day we are not PC World and we are not a big business, so play to your strengths.
Try to understand where the quoted price comes from, why changing a screen or processor effects the price. For instance they might have a different hard drive already sat in stock that they can sell you cheaper than if they have to buy some in specially for our order. Labour costs here are very low as an average wage is about £180 a month. This particular factory has a production capacity of circa 2000 units per day so our product cost isn’t coming from man hours it’s coming from the price of components they have to buy in and there desired margin – both of which you can squeeze a little.
These guys know our domestic markets though and they know exactly what there product can sell for in our desired sales territory. I intend to export a particular model to Austria and Switzerland and the sales manager knew what they were selling for there just as well as I did. So if a laptop can be sold for £400 don’t expect them to sell you it for £50 as they know the margin you want and will play you on it. My advice, Tell them why you need a particular margin, be creative and if they take a shine to you and want to work with you they will move the goal posts a little. Look at the spec hard – do you need 4 USB drives? A DVD drive? Will changing the processor effect sales? Clever decisions here can all drive down the price. Remember that a small 20 USD saved per unit over 500 units is a big chunk of money.
Some 230 staff are employed here producing notebooks, laptops and tablet pc’s
Laptop battery life is tested here, any rejects are sent to be analyzed before going back to the start of the production line.
These notebooks have finished assembly and are then taken for final testing, the manufacturing run tests each new component as it moves down the production line, the final testing of each individual unit is not something every factory does but obviously I’m pleased that this one does.
Above is the iPad style tablet pc using the same screen technology as the current iPad 2 with android 4.0 software. I decided to spec our models with a slightly better camera as the standard one was 0.3 mp and I also upgraded the processor.
As you can see the setup here is pretty cool, not too big that I’m a small fry customer and not too small for me to be worried about product standards. This I think is right where I want to be.
I selected 4 units to work with and I will be receiving my samples on Wednesday. I really like the set up here and have a good relationship with my sales manager. I think that it’s important to be able to read body language and be conscious of how your body language may in turn be received as there is only so much that an interpreter can get across and a lot can get lost in translation.
One last piece of advice is don’t rush the negotiation, even though you may love the product just sit back and keep sipping on the Chinese tea they are religiously bringing into the board room, a slow 5 hour meeting today drove my purchase price down by almost 20% and im pretty sure half of that was down to talking about what we all studied at university and which football team we like.