Looking to Outsource Production

**chopper** · 12-31-2007 09:25 AM

As the title indicates, I am looking to outsource production of my clothing company.
I have looked at so many factories in China, but for me there is too much of a risk of being scammed by Chinese manufacturers, I've heard many horror stories.

Can anyone recommend to me any reliable companies that they have used in the past?
I am not asking for people to recommend themselves, but rather recommendations from people who have done business before.

Thanks,

**BusinessAdviser** · 12-31-2007 10:55 AM

While I am not advocating for the Chinese textile industry, understand that most of the horror stories result from individuals insufficiently protecting themselves from such risks.

First, you can help protect yourself by contacting manufacturers directly and speaking with them, getting references of other customers, getting samples, entering into contracts providing for a U.S. venue, etc.

Second, the price is generally tied to the risk. It is just like bonds - the riskier they are (the more likely the borrower is to default on the loan), the higher the interest rate (the more the borrower will be required to pay you for taking on the risk).

My advice would be to find a large number of manufacturers, both in China and elsewhere, who have attractive prices for your needs (since that is likely why you are outsourcing anyway), do your due diligence and take additional steps to protect yourself, and then go from there. This will maximize your gain relative to your risk, and at the end of the day, this is really your ultimate goal (assuming rational risk aversion).

**adamwade** · 01-30-2008 03:25 PM

If you really want to understand if a factory in China is going to rip you off or not you need to visit them in person.

Either line up 5 or 6 factories to visit of go to a big trade fair.

I have helped other people like you find a good offshore supplier, but it take alot of work.

My best advice is to keep looking around and ask alot of questions, check out sites like alibaba.com or ec21.com , these places will help you get a benchmark on costs.

Keep sending emails and find some people you want to deal with. Then get on an airplane a spend a week in the trenches over there.

If you are serious about creating a private brand, a boots on the ground trip to China is a must.

My company leads groups over there, both for private factory tours and also to visit the big trade fairs.

The Canton Fair in Guangzhou has an huge garment section and is filled with great suppliers with unique products.

**perdesign** · 01-31-2008 10:13 PM

Yeath,it will be necessary to visit the factory,in my idea,you also should learn about the factory through some person or organization.
This is because sometimes what you see in the factory is not real.

**BusinessAdviser** · 01-31-2008 10:25 PM

I disagree. I don't think that you need to visit a factory in order to determine whether to use a foreign supplier. Obviously, Mr. Wade has an interest in advising you to the contrary, though he cannot be faulted for it, but you should understand that it is not necessary and is likely a poor choice.

Get samples of other products they have produced. Contact other customers and inquire into their opinions of and experiences with the supplier. Hire an attorney to prepare a contract that will protect you. But you needn't travel to China to see if a factory exists.

We use a Chinese printing company for printing of our books. We received samples of other products, we contacted numerous references and discussed the printing company, and we are using an American law firm to prepare legal documents so as to protect ourselves. Sure, we could spend thousands of dollars traveling to China to see the actual machines, but 1) we have no need to and 2) our money is better spent elsewhere.

Do your own due diligence properly and extensively and spend a fraction of those travel expenses on your attorney's legal fees. You'll be better off.

**adamwade** · 01-31-2008 10:42 PM

I wouldn't say that factory visits are a poor choice. It is possible to find good suppliers without going in person. There are online tools , and you can also get involved with agents or brokers.

Speaking from personal experience, when I sourced my first products in China, the money I had to spend was every penny I had. There was no way I was going to send that money to someone without inspecting every bit of their operation in person.

And FYI - legal documents prepared by an American law firm to protect you in China are totally worthless.

I don't want to get in a sparring match over the value of exploring a business opportunity in person. From my own experience, spending a week on the ground gave me the filters I needed to understand what information and options were valuable to me

**BusinessAdviser** · 01-31-2008 10:53 PM

Originally Posted by adamwade

I wouldn't say that factory visits are a poor choice. It is possible to find good suppliers without going in person. There are online tools , and you can also get involved with agents or brokers.

Speaking from personal experience, when I sourced my first products in China, the money I had to spend was every penny I had. There was no way I was going to send that money to someone without inspecting every bit of their operation in person.

And FYI - legal documents prepared by an American law firm to protect you in China are totally worthless.

I don't want to get in a sparring match over the value of exploring a business opportunity in person. From my own experience, spending a week on the ground gave me the filters I needed to understand what information and options were valuable to me

Not a sparring match. Merely an exploration of different points of view and experiences. From my own experience, all necessary information can be obtained without actually traveling to the opposite side of the world to view the factory.

Ultimately, it's a cost-benefit analysis. Is the cost of traveling to China worth the benefit gained by doing so? I don't think so.

**MASapparel** · 01-31-2008 11:30 PM

what type of stuff are you looking to do? specialty products, all over prints, jeans?

I have experience in the industry and I know you said you didn't really want people talking about themselves but I do run a design/print shop so email me anytime

**adamwade** · 02-01-2008 09:30 AM

Originally Posted by jmenq2

Not a sparring match. Merely an exploration of different points of view and experiences. From my own experience, all necessary information can be obtained without actually traveling to the opposite side of the world to view the factory.

Ultimately, it's a cost-benefit analysis. Is the cost of traveling to China worth the benefit gained by doing so? I don't think so.

Then I guess it is just a difference of opinion. I think one of the most valuable things you can do for your business is travel to China.

I find anyone who does business with China ,that has never gone over in person, to be less informed than someone that has.