5 Tips to Do Better Business in Asia

China is the largest supplier of goods to the United States, and the trade of goods and services between the two nations is a multi-billion dollar relationship. But in order to gain a foothold in the global sourcing industry, there are some cultural and business customs you will do well to adhere to if you want successful.

Mawson Global can act as a liaison between you and suppliers, and accompany you on overseas supplier visits and meetings. However, there are some important customs you need to be aware of before you go. Here’s a quick guide to get you through the trip embarrassment-free.

  • Relationships before business. There is a saying in China that you don’t discuss business until the third cup of tea. The Chinese place great importance and value in developing relationships first and conducting business second. The best course of action is to learn about your host’s country, culture, interests, and share your own interests. Once trust and cooperation has been established, then get down to business.
  • Always be on time. While the Chinese are occasionally late to meetings, your punctuality is a sign of respect. The pace of business in China is somewhat different; so don’t be put off if your hosts are late to a meeting. Just don’t cause the delay!
  • Pay attention to your body language. Talking with your hands, pointing, waving, and gesturing are rude in China. Talking with your hands in your pockets is also disrespectful. Even a simple handshake should be handled in a modest manner. Too firm a grip, too much hand pumping, or too long of a handshake can be considered aggressive. Also, it’s customary to pass and offer things, such as dishes at a meal, with your right hand rather than your left.
  • Keep a calm demeanour.  Avoid being overly boisterous or too forward with potential business partners. Instead, approach business negotiations with a calm demeanour, patience, and dignity, and you’ll win the day.
  • Be prepared to dine and drink. Entertaining is a vital component to Chinese business culture. The Chinese like to conduct business over lunch or dinner, and they enjoy having drinks during and after the meal! Business deals often are completed over a meal. Make sure that you plan for this in your daily schedule.

With a team located in Qingdao, China, Mawson Global is uniquely positioned to assist you with your global sourcing ventures in China. Please contact us to learn more about how we can help you during visits, as well as with other global sourcing needs! 

Decision, Decisions: 3 International Shipping Options

Selecting an international shipping method is a complex decision for any global commerce company. There are numerous options, each with its own advantages and disadvantages, and significant cost differences amongst the bunch Choosing the right shipping method could be the difference in whether your freight arrives on time. Picking the wrong one could mean your shipment never arrives at all.

If your company is evaluating its shipping options, examining each one, as well as some of the pros and cons, is an important step in the decision-making process. The following is a quick guide to a few of the most popular shipping options to aid in your shipping search.

Less than container load (LCL) - LCL is an international ocean freight shipping option that allows a shipper to utilize just a portion of a shipping container, instead of the whole thing. LCL is ideal for companies with a low volume of international shipments or those who need an inexpensive means for transporting cargo. It also allows shippers to quickly move their cargo because they don’t have to wait to fill an entire container. However, with these benefits come a few drawbacks. Most freight companies combined several LCLs to fill containers. This means your product could be at risk of contamination or damage from other cargo in the container. For businesses shipping high value items or food products, LCL might not be the best choice.

Full container load (FCL) – FCL shipping involves transporting using an entire sea freight container. FCL is typically the best way to transport freight – even if you’re only sending a partial shipment – because it allows you to track your goods and avoid the risk of damage or contamination by other cargo. Companies shipping a large quantity of cargo internationally, as well as those who need a little more control over their shipping timetable – and can’t afford airfreight – will benefit from FCL.

Airfreight – Shipping cargo via airfreight is exactly as it sounds. It’s putting your cargo on a plane in order to transport it to its international destination. This option offers the most control and flexibility over the shipping timetable and provides a safer means of transport over ocean freight shipping options. These conveniences come at a price, though. Typically, airfreight is the most expensive shipping option of the three, and may be out of many small and mid-size businesses’ budgets.

You probably can’t personally deliver your cargo to every international client, but you can find an international shipping method and freight forwarder that you can be confident in.

Mawson Global provides support to companies facing the challenging decision of which shipping method is ideal for their business. We work directly with freight forwarders to provide clients with numerous options in each of these shipping categories, as well as sound, reliable advice on the right choices for your business.  If your company needs an international shipping solution that it can count on, Mawson Global can find one that fits the bill. 

Sourcing From China on the Rise

As global economic indicators have shown incremental improvement over the past several months, it could also point to a positive position for Chinese manufacturers and service providers. According to the most recent International Sourcing Confidence Index, confidence from multinational companies that source products from China increased in the third quarter, up from 50.40 to 51.28, according to the Shanghai International Sourcing Promotion Group Co.

The Index is a measure of the confidence that multinational companies feel with regards to sourcing products in China. The survey interviewed more than 200 multinational companies that have a presence in China. A reading above 50 indicates optimism, and the third-quarter index represents the highest mark in a number of quarters. The index’s improvement also indicates that the global market might be inclined to source more products from China.

According to the most recent trade information, exports from China grew to 7.2% in August, up from 5.1% in July.

With four experienced individuals staffing our office in Qingdao, China, Mawson Global is strategically positioned to help companies and organizations of all sizes and disciplines to identify and acquire the most cost-effective suppliers of products and services in the Chinese market.

Because we have a team on the ground in China, we’re able to minimise the risks associated with global sourcing and help your company make the most out of global sourcing its products. Our team members are knowledgeable about international standards, and understand local languages and cultures. Having a team in China also means that Mawson Global can quickly identify suppliers that meet your quality standards, and provide you with a partner with whom you can cultivate a long-term relationship.

There are a number of reasons to partner with Mawson Global for your global sourcing needs, including:

  • We are a global leader in product sourcing with more than 70 years of family experience.
  • Small and medium enterprises get Fortune 500 sourcing expertise for a fraction of the cost.
  • Mawson Global identifies high-quality suppliers that you can build a long-term relationship with.
  • These relationships enable your company or organization to become a key player in the global market.
  • Sourcing through Mawson Global will keep you ahead of your competition.
  • Partnering with Mawson Global helps your company slash costs and increase your profit.

For more information on how Mawson Global can help you join the global arena, please take our 10 Product Challenge or contact us.

Case Study: Food Manufacturer Experiences Savings

Organization: Food manufacturer

Looking to Source: Printed rewind

Results:

* Annual cost savings of more than $32,000.

* Rapid procurement of multiple sourcing options.

* Variety of pricing options from a select group of qualified suppliers.

 

The Objective

This client is a nationally-recognized processor, wholesaler and distributor of nuts, dried fruit, confectionary and snack products since 1996. In an effort to uncover cost savings on a specific product, the company contacted Mawson Global in hopes of identifying a reliable global sourcing partner to save on the cost of the material for printed rewind.

 

The Approach

Due to Mawson Global’s impressive track record in sourcing materials, the client engaged us to identify reliable global sources for printed rewind.

Our China-based staff researched a variety of suppliers – taking into account the client’s product specifications – and we were able to recommend reliable suppliers producing the material in multiple China provinces.

We utilized our proven rating system to identify the top suppliers by marking efficiency levels, reliability, and quality. Within a number of days, we presented the client with three different supplier options from different suppliers in China in our informative, easy-to-read Sourcing Report.

 

The Benefits

Annual Cost Savings

Substantial Savings: Because of  Mawson Global’s global sourcing expertise, the client selected a vendor that will help it experience an annual cost savings of more than $32,000 each year.

Outstanding ROI: Our fee-for-service model means the client pays for our service once, but experiences long-term benefits.

Flexible Alternatives

Future potential: After going through the sourcing process, the client now has the ability to quote more products and experience additional cost savings for years to come.

Comprehensive approach: Mawson Global not only conducted its QuickLook Analysis, but also applied its Research Project capability for the client.

High Efficiency: Mawson Global sourcing experts conducted a timely and robust search for suppliers that provided the required materials at a significant cost savings.

Skilled, professional staff: Our team members in Asia have been with Mawson Global an average of six years, and they have simplified the process of selecting trustworthy, reliable suppliers that meet our high standards for quality and customer service. This team, along with our proven supplier ratings system, is a key reason we’re able to quickly address our client’s request for global sourcing options for its printed rewind.

New Case Study - Glass Sourcing Changes Lead to Huge Savings

Industry: Building and construction

Looking to Source: Glass (colored, etched, clear and frosted)

Results:

* Annual cost savings of more than $550,000.

* Rapid procurement of multiple sourcing options.

* Multiple pricing options for several qualified suppliers.

* A sense of loyalty to Bank for introducing the company to Mawson Global.

 

The Objective

Our client, a steel fabricator and manufacturer, has a niche market in the installation of glass balconies on apartment buildings. The company wanted to save money on the various types of glass needed in the construction of these balconies. By the suggestion of its bank it contacted Mawson Global with hopes of not only identifying cost savings, but also a reliable global sourcing partner.

 

The Approach

The client reached out to Mawson Global after their bank referred them to us. We’ve worked with the referring bank with many clients and the bank recommended us because of our expertise in global sourcing and our ability to help the client reap the benefits of sourcing.

Taking the client’s product specifications for the finished product into careful consideration, our China-based staff researched a variety of suppliers, and we were able to recommend reliable partners producing the material in several China provinces.

We employed our proven rating system to identify the top suppliers by marking efficiency levels, reliability and quality. In less than a week, we presented the client with four different options from different suppliers in China in our informative, easy-to-read Sourcing Report.

 

The Benefits

Significant Annual Cost Savings

Substantial Savings: Thanks to Mawson Global’s global sourcing expertise, the client chose a vendor that will help it experience an annual costs savings of more than $550,000.

Awesome ROI: As a result of Mawson Global’s fee-for-service model, the client paid a one-time fee for our service, but the company will reap the benefits for years to come.

Future Options

Multiple sourcing opportunities: Mawson Global was able to identify several dependable supplier options to fit the client’s needs.

Future flexibility: Because of Mawson Global’s assistance, the client now has the ability to quote on more jobs because management can concentrate on installation, not manufacturing.

Added bonus: The owner of the company didn’t even have a passport before its alliance with Mawson Global. Now, four months later, he not only has a passport, but he’s importing the materials his company needs to be successful.

 

Strong Loyalty to the Referrer

Instilling trust: The referring bank has had a working relationship with Mawson Global for a number of years, and provided the client with a dependable and experienced global sourcing partner it can trust. The client’s relationship with the bank is stronger now because of the assistance it provided in the global sourcing process.

Comprehensive Approach: Mawson Global provided a full array of services for this client, applying its QuickLook Analysis, Supplier Research, Supplier Visits and Sourcing Project Management.

 

Choosing a Customs Broker – What You Don’t Know Could Hurt You

Customs Brokers – What do they actually do?

The work of a customs broker can seem rather mysterious because when managed properly, the customs clearance process should be seamless and invisible to you.  In an ideal situation, customs clearance of your imported or exported goods should “just happen.”

The truth is, the cross-border clearance of goods that change hands from one party to another can be a complex undertaking that is fraught with potential risk, extended delays and excessive taxes or other unexpected costs.  

Customs brokers are responsible for managing the end-to-end process that starts with identifying goods that need to be shipped from one location and finishes with the successful delivery of those goods to a final destination.  Brokers handle the paperwork, taxes, shipping details and customs compliance requirements at every step in the process.

The Good, the Bad and the Ugly

You have endless choices available to you when it comes to selecting a customs broker. There are large variances among brokers in terms of cost, technical knowledge and overall competence.  Some brokers provide specialty expertise for certain industries or in transporting goods among specific countries.  Certain brokers have tightly managed internal controls and well established processes and procedures; others do not.

Perhaps crucially, some customs brokers actively seek to minimise customs clearance lead times but at the potential expense of full compliance.  Other brokers lack formal representation in the relevant locations and so rely on informal “arrangements” to get the job done. 

In the eyes of the authorities, you are responsible for the decisions made by the broker on your behalf, so it is essential that you can trust the customs broker you choose and that you share common objectives.

Customs Broker Checklist

When interviewing prospective customs brokers to facilitate your importing or exporting activities, be sure to cover the following points:

  • Ask the broker what roadblocks are likely to be encountered with your particular customs clearance needs
  • Ask how they handled a tricky situation in the past and what creative solutions they were able to implement.  For example, what steps do they take when a shipment is stuck at a border entry point behind a backlog of other shipments due to an extreme weather delay?
  • Ensure they have 24/7 shipment tracking facility, not just online but on the phone with a real person
  • Confirm that they will provide upfront and in writing a complete itemisation of the tariffs that you will be responsible for paying – in other words, total landed cost
  • Ask for at least two references that you can personally ring to obtain a first-hand account of how the broker performed for other clients, ideally from your industry.  Then ring those clients.

The team at Mawson Global work with a variety of reputable, proven customs brokers every day and are here to help you with your broker selection process.  Please contact us if we can answer any questions for you.

After-Hours Business Entertaining in Asia: To Karaoke, or Not to Karaoke?

When you’re traveling for business in Asia or any part of the world unfamiliar to you, it’s wise to be familiar with local customs regarding business entertaining.

You may be invited by suppliers, customers, and associates to meet after hours – in a more informal setting than daytime meetings. These interactions are equally important as daytime meeting in forging business relationships.

Hosts are usually appreciative of visitors who demonstrate knowledge about their culture, as well as the ability to converse in his or her language, so make an effort to do both. The following is a quick guide to navigating after-hours business functions.

Dining
In Asian countries, seating is very important at a formal meal, and guests should wait to be seated by the host to avoid being disrespectful. It’s also polite to try everything served during a meal. Take a bite of each dish – even if it seems unappealing – and be sure to give your compliments to the host.  If you enjoy the meal, eat up -- a clean plate is a good thing in Asian countries! However, be aware that your host may insist that you keep eating, even if you are full.

Karaoke
Karaoke bars are a common form of entertainment in Asian countries. If your host suggests visiting one and you agree, be ready to participate! Agreeing to go to a karaoke bar means you are willing to sing!  Men often receive unsolicited attention from women in these establishments. Be aware that most of it comes at a price to you or your host. Remember, you are there on business; have fun, but conduct yourself in a professional manner.

Drinking
Alcohol is an important part of building business relationships. If you don’t drink, politely inform your host in advance. Toasts are a big part of Asia’s culture, so if they are offered, it’s polite to take part. You may also ask your host if you can offer a toast to them and the success of your relationship.

Navigating Business After-Hours
If you’re working on forging business relationships in China or other Asian nations, Mawson Global can help with every aspect of the endeavor -- from efficiently arranging flights, hotels, and other transportation to advising you on the proper way to deal with businesspeople.

Mawson Global has representatives on site who are familiar with local businesses and industries. We can help you and your company forge new overseas relationships – and even suggest a karaoke song or two!

Can you take the risk out of moving exchange rates?

The short answer is yes... at a cost!

If you are considering importing because of a few cents variation in the exchange rate make sure you have considered the full effect on your business model.  

Many people consider the most obvious risk.

You took advantage of a favourable exchange rate and bought a container of product at a great price in Asia.  However in the time between placing the order and making your payment to the supplier the exchange rate has moved again. Now when the product arrives at your warehouse it has cost you as much as product from your regular supplier.  And to make matters worse, the quality of the product you bought is sub standard!

There are finance tools you can use to avoid some of these problems but make sure you consider the other risks of buying because of exchange rate variation!

 The most common problem comes from the disruption it causes in your supply chain.  If you are not building a business based on the consistent quality of your products this may not be an issue for you.  However if quality is important switching between suppliers in various countries at short notice to gain a few dollars is usually not worth it.  You will create serious risks to your product quality.

There are two main reasons for this

1.       When a supplier knows you have only placed an order today because of a small change in the exchange rate and tomorrow you will be buying elsewhere their incentive to get the quality perfect is low.  Everyone wants to build long term business not fill a single order!

2.       The other risk is that as you see a variation in the exchange rate that makes a certain county cheaper you are under immediate time pressure to place and pay for an order before the currency moves again.  This does not give you the time you need to properly research your supply options.  Without this research the risk of choosing a poor quality or unprofessional supplier is much greater.

We would recommend only moving sourcing or production offshore if your research shows a significant advantage regardless of a 10 cent negative move in the exchange rate.

The best way to avoid this risk is to do your research before you consider the exchange rate.  Then once you have identified the suppliers you want to work with and there is a positive move in the exchange rate you can increase your orders to this supplier.  Many of our clients at Mawson Global use our own teams in Asia to complete this research for them so they can be confident the change of suppliers won’t negatively affect their business.

Once you have identified the suppliers that have this advantage you can look at the options to “fix” the exchange rate.  Your bank or financial institution will have tools available which allow you for a small cost to buy the currency you need to pay for your order at today’s exchange rate.  This is a great option if you are spending large amounts over a long period as you can get the items into your budget and know exactly how much you need to pay for them in several months time.

What to Expect During Supplier Visits and How Mawson Global Can Help

When you’re contemplating visiting your suppliers, it’s helpful to remember some advice from “Sesame Street:” “Asking questions is a good way of finding things out.”

At Mawson Global, we have the expertise and the skills to make supplier visits successful -- and educational. Whether you need a guide on-site or someone to visit potential suppliers on your behalf, we can help.

If the supplier is new to your organization, one of your primary goals should be to validate claims that they make in sales presentations and proposals. If the supplier is one that you already use, it’s helpful to conduct an annual renewal evaluation or a periodic cost negotiation.

Here are some tips on how Mawson Global can help you get the most out of a supplier visit:

  • Visit the receiving dock. On the dock, we can help you find the names of suppliers and the quantities of raw materials on hand. We will help you compare the information that you have received from cost-analysis negotiations to what we can observe on-site.  Here is a great place to see if the product you are buying is really made in the factory or just shipped in from the real producer!

  • Visit the shipping dock. Here we can see the condition of finished goods, observe the quality inspection process and learn how shipments are handled.  Making sure the quality inspectors (preferably third party) understand what you are looking for is one of the most important issues to solve on a supplier visit.

  • Talk to the sales staff. We ask how orders are received, entered, and queued for production or fulfillment, and whether electronic notifications to the customer are available at every step.

  • Talk to line employees. We’ll check on company morale and organization, and ask specific employees specific questions. For example, it’s helpful to ask machine operators about their productivity per hour so you can verify any commitments the sales team has made to order delivery dates.

  • Talk to management. We’ll ask about such things as communication structures, employee turnover, and how long management has been in place. If relevant, we’ll help you peruse the company’s financial statements and business plan.  Here you are trying to get a feel for how committed the whole company (not just the sales department) are to your project.

Mawson Global Client Benefits Exponentially from Global Sourcing

Industry: Building and construction

Looking to Source: Construction Materials

Results:

*Annual cost savings of more than $220,000.

* Rapid procurement of multiple sourcing options.

* Multiple pricing options for several qualified suppliers.

* A sense of loyalty to Bank for introducing the company to Mawson Global.

 

The Objective

Our client is a steel fabricator and manufacturer and has a niche market in the installation of balconies on apartment buildings. The company wanted to investigate whether or not it could save money on balustrade posts of metal and, by the suggestion of its bank, contacted Mawson Global with hopes of not only identifying cost savings, but also a reliable global source.

 

The Approach

The client reached out to Mawson Global per the recommendation of their bank. The bank, which has been working with us for a number of years, advised the client that we would be a good resource for global sourcing options.

After discussing their sourcing needs and goals, our China-based staff researched a variety of suppliers – taking into consideration the client’s product specifications – and we were able to recommend reliable suppliers producing the posts in several China provinces.

We employed our proven rating system to identify the top suppliers by marking efficiency levels, reliability, and quality. Within a few days, we presented the client with four different options from different suppliers in China in our informative, easy-to-read Sourcing Report.

 

The Benefits

Significant Annual Cost Savings

Substantial Savings: Because of Mawson Global’s global sourcing assistance, the client chose a vendor that will help it experience an annual costs savings of more than $220,000.

Awesome ROI: As a result of Mawson Global’s fee-for-service model, the client pays once for the service, yet reaps the benefits for years to come.

Future Options

Multiple sourcing clients: Mawson Global was able to identify several suppliers that fit the client’s needs and product specifications.

Future flexibility: Because of Mawson Global’s results, the client now has the ability to quote on more jobs as the business can concentrate on installation, not manufacturing.

Added bonus: The client previously didn’t have a passport before its alliance with Mawson Global, and within four months, it was importing the posts after visiting and verifying the recommended suppliers.

 

Strong Loyalty to the Referrer

Instilling trust: The bank has been working with Mawson Global for a number of years, and provided the pathway for the client to find a dependable and experienced global sourcing partner it can trust. The bank’s relationship with the client was also strengthened through the global sourcing process because it demonstrated that the bank has the best interests of the client in mind.

Comprehensive Approach: Mawson Global provided a full array of services for this client, including its QuickLook Analysis, Supplier Research, Supplier Visits and Sourcing Project Management.