Now, depending on who you are, when it comes to importing from China $10 million might not sound like much. I get that. And honestly $10 million’s small peanuts if we’re talking about companies who import shipment after shipment of the same exact product(s).
That’s not what Virtus is involved in.
We’re talking about $10 million worth of custom-designed and unique electronic products or components. Big difference, huge actually, and we’ll chat all about it.
Not to pigeonhole into retail but a perfect example would be brand displays in retail stores that involve electronics. Every time a new display’s created for whichever brand, about 85% of the time custom components need to go into that.
It’s going to look, work, or function differently from order to order.
Our average orders in the retail sector are for 1000 pieces, sets, etc., to create one of these display systems deployed to U.S. locations where they’re set up for consumers. What this means is there’s FAR more collaboration, communication, systems and processes going on between our operation and China.
Note: In this article I’m just going to use the word “China” a lot in a general sense to make this a bit easier. Cool?
Anyhow, that’s where I’m coming from.
A Little About China
So, if you’re setting out to build one specific thing or have t-shirts made it’s not hard to get those done in and imported from China. I know that. You know that. Everyone knows that. This complex global system’s infrastructure is well-tuned and there’s plenty of information online if that’s what you’re interested in.
But, if you need to get a consistent supply of custom-designed electronics. Read on…
As I said, we’re constantly in communication with our partners in China – iterating, tweaking, and changing designs because typically our clients don’t have months to wait.
We’re usually running on four week deadlines.
Boom! One month, 1000 custom-made electronic devices or components need to be delivered to the U.S., assembled, then deployed to locations. Because of our accomplishments in retail and many other sectors where we’ve consistently made this type of thing happen over the years, I think we’re authorities on this particular subject.
And with that, let’s get into the meat of this thing.
The Top 3 Mistakes We See Companies Making
This is a good place to begin today’s lesson because I’m a firm believer in following obstacles. By the way, if you’re a reader and haven’t delved into Ryan Holiday’s “The Obstacle is the Way: The Timeless Art of Turning Trials into Triumph” yet I highly recommend it. That being said…
1: Taking Your Idea to China
Right, so these folks head on over to China with their product idea and try to get them to manufacture it from scratch – meaning China’s going to build the first designs and prototypes and so forth.
Problem is, that’s not really what China does. China’s all about quantity and production. They want large orders. Sure, there are companies in China who do one-offs, but afterwards they’re going to expect that order.
They don’t just design things to see if they’re functional or plausible and can work.
That’s something we suggest you hire a local industrial designer or some designer that’s able to create the needed renderings, or perhaps an engineer (structural/mechanical/electrical).
If you’re in the U.S. have the prototype created in the U.S. Get certain critical initial components put together in the U.S. Will it cost more? Yes. And the faster you want this stuff the more you’ll pay. So, if you want a custom circuit board in a week you’ll pay a few hundred bucks
But, it ends up to be a life saver because you can better qualify your design and get rid of bugs or issues done BEFORE approaching China.
2: The AliBaBa Route
No one’s dissing AliBaba here. It’s an amazing company and a powerhouse no doubt. But I’m not going to tell you it’s the best way to find products or interact with the Chinese market.
Because by the time products get on AliBaba there’s likely been one, two, three, four…markups thanks to middlemen and brokers and what have you. It’s easier, and an unbelievably useful system, but we get much better prices and oftentimes higher quality products by going factory-direct.
You’re also going to have better control over your product.
I’m sure we all know the game ‘telephone’ right? Imagine having your requests have to flow through 3 or 4 people before it gets to the people actually doing the work, add in the translation issue from English to Chinese and you have the perfect making for disaster
Going factory-direct might sound scary at first as you imagine all those thousands upon thousands of factories spread across Chinese provinces, each creating one or a large variety of different products/components.
Thing is, they’re all grouped together. So you’ve got the Chinese Silicon Valley-style area that’s mostly all tech, then textiles, and so on. We took the time to form relationships with manufacturers who can bring all the parts needed and assemble the electronic products we require.
The Tool We Use
Really what we’re doing with the vast majority of this manufacturing process is communicating our specific needs over the ocean, so it’s no surprise that most of the tools we’ve found to be effective are those focusing on exactly that.
Our tool list includes some that you have probably heard of but also will include others that you have probably not heard of.
Oh yeah, Skype is a big one. We use this on a regular basis to type and talk about projects. It’s also great because as these conversations grow you’re able to go back and see all of your correspondence. I’ve had to go back years in our conversations a few times and it’s all stored right there for you.
WeChat is actually an interesting platform. It offers a large variety of premium options that according to this 2017 Fox Business article, “iPhone’s Toughest Rival in China Is WeChat, a Messaging App” has captured 35% of Chinese smartphone users. One of the coolest functionalities it has is called Mini Programs,
“This feature allows users to access apps stored in the cloud, so the apps can be used without being downloaded or stored on a device, giving users one less reason to buy an iPhone instead of cheaper domestic brands.”
For us and what we’re doing, WeChat just makes things much smoother with China. And, tons of the Chinese workers we communicate with already use it.
We love the QQ App because first of all, it’s the most widely used online communication tool in China. While it has a bunch of great features, we use it to transfer files and designs quickly and rely on the multi-language supported version.
We use Trello a ton to track different requests and opportunities before they become projects. You’ve likely heard of this, or use it yourself.
3: International QC Issues
Quality Control. China has their way, we have ours. Because of this fact, we started running into nightmares early on. For example in the retail example, the Chinese side isn’t necessarily manufacturing the entire display, just the electronics.
And for us each order is different, so there are times when these electronic units won’t be complete because of a client’s product. It isn’t completed until it gets to the U.S.
Take Bose speakers for example. Let’s say Bose hired us to create an interactive, beautiful, and digitized display of some new speakers they’ve released in a major retailer.
- Our Chinese partners won’t have the speakers to test the electronics we’re ordering on them.
- China’s going to perform certain QC tests, but then it’s going to show up in the U.S. and different QC tests will happen.
If you run different tests you’re going to get different results. These tests would conflict and add to our workload. Obviously this is an issue you’ll deal with when ordering millions and millions of dollars worth of custom electronics.
Our Solution: Suppleyed
Our Suppleyed app was created for us, by us, out of necessity. We had to find a way to sync things up a bit and add some cohesion to the QC processes between ourselves and China.
If we picture one of our partner factories, and go to the line-worker conducting their part of the process, they’ve got their phone right by them, hooked into our Suppleyed app.
- There are checklists in both English & Chinese.
- Think of them as project recipes.
- Every project that goes into Suppleyed has it’s own recipe.
- As workers are putting electronics together, they can work through the checklists and test accordingly.
This way, when our components or products get here to the U.S. it’s easy to double-check. There’s cohesion. Of course many recipes have similar components depending on the industry, and Suppleyed has a huge database of documented questions. So, for many products we only need to add one minor tweak or change, or add one new question or item to the checklist, but it’s streamlined.
Overall, this has made it push-button to get specifications integrated into the manufacturing process and testing between our two countries.
Alright, so If you made it this far, then there must have been some valuable information for you somewhere up there. And don’t worry, if by chance you’re interested to see whether our Suppleyed software could dramatically improve your business, we’re making it available so be sure and either contact us or check back soon.