This article addresses some concerns expressed in the popular news media regarding doing business in China. I was assisted in the preparation of this article by Jasmine Agency located at Jinping district, Shantou, Guangdong province, China. There are always two sides to every story and this article is about the new entrepreneur in China and factors that go into doing business in China if you are a Westerner.
It is important to remember that China as a trading country has a rich and long tradition with the West going back to the Silk Road and before then. China has only recently opened up trade again to its general public. There is a new and emerging entrepreneurial class of citizens. This group of citizens are educated, and knowledgeable of China’s culture and business.
Most importantly they can assist the Westerner in translations, finding suppliers, due diligence inspections and all aspects of invoicing, shipping and packaging. I am calling this consulting service, China Helpers as it is known in most circles. China Helpers have a wide range of services. They can act as agents or act as a business host if you should travel to China to personally consummate a business transaction.
I met Jasmine Agency through the Alibaba web site. This web site is devoted to putting buyers and seller together. She is listed as a China Helper as well as other individuals in various provinces in China. I noted that on the forum section some negative experiences had transpired when an individual goes on instinct and places orders directly with suppliers offering fabulous prices on brand name products.
As Jasmine or any China Helper will tell you buying direct from a seller who offers dirt cheap prices on known brand products should be a red flag. In China as in the United States scam artists feed on buyers who go for the too good to be true, good deal. China law enforcement is working triple time trying to locate these scam artists. As soon as the scam is reported, the schemer sets up shop somewhere else in China under another name. Sound familiar?
About Jasmine Agency:
Jasmine works in a home office in Guandong Province. It is a marketplace situated within hours from Hong Kong, and other main areas. There is an airport in Shantou. She is educated at the University and speaks and writes English. Her official web site is Jasmine Agency dot org. She worked for DHL in China, but due to company consolidation she was given the option to move or quit. She decided to open a small business in her home province. Her business is a service for businesses and individuals who need introductions to China suppliers and merchant services.
The range of services Jasmine offers are set forth on her web site. The highlights of her services include but are not limited to include, airport pick up and hotel reservations for visiting business people. In advance of the business person’s arrival she locates suppliers of the products and supplies you are interested in and prepares lists of prices and shipping costs. She determines which suppliers will suit your needs in quality and quantity. She knows the area and can draw on her experience to know reliable suppliers and how to get it to you in the most economical fashion.
Now comes the other side of the story in the Ugly American/Westerner scenario. A North American entrepreneur used Jasmine’s services to locate and arrange for the purchase of goods as well as shipping. He wrote a glowing account on the forum of her valuable services and recommended her in no uncertain terms. He was very happy with Jasmine Agency.
The rub is that the North American never paid for her expenses, costs or her time for running him around the province and her out of pocket expenses she advanced for her work. She informed him how much she appreciated his kind words and that she was trying to allow him to save face if he would pay her what he agreed to pay. It was as if he thought his testimonial sufficed for payment. This is a recurring theme among China Helpers.
A Westerner, African or citizen of any continent wants a really good deal and asks for assistance, but when it comes to paying for the consulting services a disconnect occurs. Some Westerners and other buyers complain that the so called dirt cheap they were expecting are not available to small business owners. It is true that large business owners have leverage because they can place large orders and get the benefit of bulk purchases and shipping. The multi-national companies have been doing business with China for a longer time and are set up for large purchase orders. They have warehouses, distribution points and a range of business tools at their disposal.
The small business owner can still find good deals in smaller quantities with the help of a China Helper. The small business owner will not find steals and they will need to make arrangements for drop shipping and other services the large businesses have all ready built into their business model.
Excerpts from Interview With Jasmine–August 21-24, 2007
Q. Can you explain the quantity issue. E-business is relatively new for a small business buyer in Mainland China. There is no drop shipping, therefore the buyer must take delivery on the entire shipment of a container. What shipping companies in China in your province do you use. Discuss the pros and cons of types of products that will do well for small business owners. I saw the products you have sold in the past on your web site.
A. If you know China well, you may know that many big manufacturers require the big order quantity. The products are in low profits nowadays, so they must require the big order quantity to support their profits and save the production costs and other costs. But many E-businessmen are only small buyers and new buyers. They can’t accept the big order quantity. And some of these buyers are Ebay sellers, they can’t order too much at one time, and they can’t keep these big amount in their house, they need small quantity every time, and need someone in China to make drop shipment to their buyers directly. When the stock run out, they will source again. Their purpose is: quick sell, quick buy.
I have worked with DHL, EMS(express), EVERGREEN, APL, OOCL….
In fact, you can’t say I sold the products, I don’t sell.I only help the buyers to source, like look for the products or suppliers, the buyers will order the products directly from the factories which i recommended. They will send money directly to the factories. Sometimes, they sent money to me and asked me to forward payment to the factories. As they said they prefer to believe me, and leave me to control things on behalf of them. Under this circumstance, you can say i am the helper (or representative) of the foreign buyers.
Q. You and other China Helpers have warned about buying “named brand products” from China because some of these companies are simply “scams.” Would it not be adviseable for all purchasers to go through a China Helper located in the province where the products are to avoid being taken.
A Some scam artists use what the foreign buyers are interested in, name brand items, so they set up their website and pay money to Alibaba to be act as a paid member. And what they get money from the buyers, they will disappear. There are many members got cheated and complained to me and hope somebody can help them to get back money. (end of verbatim interview)
Advice and Conclusions:
One sage piece of advice is to know your market for the goods you intend to buy from China. You need to calculate the entire cost package as well as any taxes that may be levied. If you know your market and calculate the costs of doing business then you will order enough of the product to fulfill orders and not be left holding the bag. The other aspect is the China Helper’s ability to inspect and ensure quality products.
Alibaba as well as other buyer and seller web sites have photos of products. Sometimes buyers complain that the product when received does not look like the product photo. The China Helper can be your eyes and ears in China. This hands on experience is valuable to the business that travels to China and utilizes a China Helper or decides to stay in their respective countries and allow the China Helper to act as their purchasing agent.
According to Jasmine her main objective is to source for foreign buyers. By source she means find the right supplier and goods for the intended purposes outlined by buyers. When the buyer places the order Jasmine Agency follows the order, ensures it is inspected and then can arrange for the shipper that will suit the product using all available resources are her disposal.
She agrees that China is a world market place, but the e-business aspect is not as mature and requires assistance particularly if the foreign buyer is not versed in language or product lines. Some people think they can simply go on-line order a product and it will magically appear. It appears simple, but there are complexities like inspections, shipping, quantities and quality of the product. She has had may good experiences with bona fide purchasers.
For anyone interested in knowing more about services of a China Helper I would recommend contacting Jasmine at www.jasmineservice.org. This is for merchants who are considering doing business in China. If Jasmine cannot assist you she can recommend other agencies that can fill your needs. She can be reached at email@example.com.