In this article we will illustrate the best strategy for importing mobile phone accessories, using as an example a real case study, that of one of our customers who for convenience in the rest of the article we will call Marco.
Step One: Find a Supplier
When he decided to import from China, Marco already owned an iPhone accessories store. Like many entrepreneurs who decide to take this step, Marco also had the problem of wanting to increase his range of products. To avoid having to manage several suppliers at the same time (and the associated organization and logistics problems), we only selected possible suppliers who specialize in iPhone cases (so as to be sure that they could guarantee an abundant choice of products).
The range of products offered by a given supplier is important. In fact, in China there are a myriad of wholesalers who take care of exporting a little bit of everything, but without being experts in any particular sector. Apart from having a lack of knowledge of the product, such a supplier could decide, from one day to the next, to stop marketing the product you are buying. For you it would obviously be a disaster as you would be forced to start again from the search for suppliers. Finally, a supplier specialized in a given sector can guarantee you a wide choice of products. This means that one supplier will probably be enough and you won’t be buying from multiple suppliers at once.
That’s why, after talking to Marco, we went looking for suppliers who specialize in enclosures and who, at the same time, had enough share capital to be considered a serious company. Subsequently, Marco contacted the suppliers on our list and requested the catalogs (in digital format) so that he could view the goods of the various suppliers – and their prices – and choose the supplier he preferred.
Step Two: Product Development and Branding
Marco wanted to customize the product with his own brand. But instead of branding the cases and ruining them aesthetically, he opted for custom packaging. Although it sounds simple, we are actually talking about a fairly complex procedure.
To get started, to make a custom plastic package, you need to buy an injection molding machine, which ranges in price from a few hundred to a few thousand euros.
But if you’re working on a tight budget, you should avoid these kinds of expenses! Once we had chosen the supplier, the solution we found was to ask him to send Marco some packages used by past customers. If on the one hand this choice does not allow you to customize the shape of the package, on the other hand it leaves us full freedom as regards the graphics of the package. The other advantage is, of course, that the supplier already owns the molding machine for the old packages; So, there is no need to buy a new one.
Once the packaging was chosen, Marco purchased some samples (including packaging with the personalized brand). Since Marco did not require any particular customization, the samples cost him only 30 euros. If, on the other hand, he had decided to request a 100% customized package, he would have had to spend much more money (because of the molding machine). Always avoid customizations that are not strictly necessary!
The samples had no problem and Marco therefore decided to proceed with payment and production.
Third Step: Payment and Production
Before starting production, a sales agreement must be signed and an advance on the total to be paid must be sent. Let’s start with the sales agreement. What is the reason why we always recommend to our customers to sign a sales agreement?
First, to communicate to the supplier the complete list of product specifications and quality standards required. This limits the risk of misunderstandings, which are the most common cause of problems that can occur during the production phase. If some of the specifications are not clearly communicated to the supplier (the color of the product, for example) it is in fact very difficult to remedy after production is concluded.
In addition, a sales agreement serves as a deterrent to the supplier, who will think twice before screwing you over the quality (e.g. by producing your iPhone cases from recycled plastic) as the sales agreement will contain a clause stating that the goods will have to pass a quality check before the final balance is paid (whether it is the truth or a bluff on your part).
As far as payment is concerned, we always recommend paying a 30% deposit (the supplier must still buy the materials and components so you cannot expect him to start production without first receiving an advance).
After signing the agreement and paying the advance, Marco started production (which, according to the supplier’s estimates, should have lasted 25 days). During production, he contacted the supplier several times to find out the progress of production and request photos of the goods already produced.
Step Four: Quality Control and Freight Transport
Four weeks later, the supplier asked us when we would travel to Guangzhou to visit the production line and perform quality control. We told him that we had decided to cancel the quality control.
The reason for this choice is that Marco had no intention of investing several hundred euros in quality control. Even though we knew this from the beginning, we still pretended that we wanted to perform a quality check so that the supplier would commit to making a product in line with the quality standards desired by Marco.
Am I suggesting that you lie to your supplier so that you can benefit from it? Yes. Clearly this “trick” does not always work. If problems occur during the production phase, the only way to find out is to perform a quality check. However, if you can’t afford to execute it, then the strategy I just told you about is the best you can do.
Of course, quality control only makes sense if it is carried out before the final balance of 70% is paid into the supplier’s bank account. If you discover a problem after the supplier has already received the money, it is difficult for them to commit to solving it, perhaps by repairing or remanufacturing the defective goods.
As for the transport, in this case it was a package of limited size so we had it shipped by a FedEx courier, who picked up the goods at the supplier’s headquarters and shipped them to Marco by air. If it had been more voluminous, Marco would have been better off shipping the goods by sea.
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