High volume vs. low volume: buying products made in China

The key concerns that can arise when purchasing products made in China are entirely different when the buyer is a large importer as opposed to a small-volume importer. Both types of buyers do encounter problems however they are usually on the opposite sides of the spectrum.

For large volume buyers purchasing products made in China, the issues they face are usually related to scale. On the positive side, because they are ordering such large volumes they will typically be sourcing from large manufacturers with established operations. This situation generally implies that the manufacturer will have quality control procedures in place and often better machinery. Larger operations mean more staff and, for most products made in China, usually mean more capital in place to run the factory.

This can also mean that the supply chain might be very long. This type of situation can occur because the factory owner may need to work with a variety of other smaller suppliers for components and parts. With a large operation, they might not always be able to meet the required number of components from one supplier so they are forced to purchase from numerous suppliers. This is a typical scenario for products made in China. When purchasing from multiple suppliers the level of risk increases because it is harder to supervise quality from numerous factories.

While scale is usually a good thing in manufacturing, it does require more professional management to run complex supply chains. Many suppliers of products made in China do have this type of capability because they are manufacturing products being sold around the world. This can be a great way to build up a supplier’s capability but requires buyers with the time and processes in place to work closely along their supply chain.

For smaller buyers purchasing products made in China, the issues they face are entirely different. Most high-volume suppliers are not interested in working with low-volume buyers that want small minimum orders. The suppliers see these types of buyers as being taking too much effort with little chance of turning into a long-term business partner. This is true even though small orders often bring higher profit margins.

This situations means that low-volume buyers wanting to purchase products made in China must turn to smaller factories interested in lower order quantities. By nature, smaller suppliers usually mean more risk for the buyer on several fronts. First of all, smaller factories usually have less capital on hand, which means the buyers can never be sure that the factory will be able to remain in business long enough to become a solid trade partner. Also, smaller factories often have less automated machinery which can impact product quality. For labor intensive industries, the smaller factories may have more difficulty attracting good employees, since they are often attracted by the higher salaries usually offered by larger factories.

That said, buyers purchasing products made in China by smaller factories can receive more personal attention. The factories may be especially keen to retain them as a customer and will be more willing to make customized changes and work with the smaller buyers on improvements, for example, in design and styling.

Both large and small volume buyers wanting to purchase products made in China face different types of difficulties in getting the quality they are looking for at the right price. Often, one of the key components to success is working with the right size of factory.