Forbes CommunityVoice™ allows professional fee-based membership groups ("communities") to connect directly with the Forbes audience by enabling them to create content – and participate in the conversation – on the Forbes digital publishing platform. Each topic-based CommunityVoice™ is produced and managed by the group.

Opinions expressed within Forbes CommunityVoice™ are those of the participating individuals.

Feb 21, 2019, 09:00am

Chinese Manufacturing: A Crash Course In Quality Control

When my co-founders and I graduated from college, the Great Recession was in full swing. Jobs were scarce. Local opportunities for entrepreneurship required money we didn’t have. So, we did what any sensible people would do — we moved to China for five years to start our dream company.

None of us spoke Chinese. None of us knew anything about the manufacturing culture in China. We went through a trial by fire, but when we emerged on the other side, we had learned secrets about entrepreneurship and international business that we could only have obtained through full immersion.

On The Ground In Guangzhou

Before we left for China, we had developed our plan to break into a new market. The iPad 2 was on the way, so we found a Chinese manufacturer to create iPad 2 cases and prepared to roll it out to resellers in the United States. The plan came crashing down when all 6,000 cases we ordered were defective. The buttons were in the wrong places, the cases didn’t fit the iPads and we were left wondering if conventional wisdom about Chinese manufacturing quality was true.

Years later, I look back on that first experience and see just how little we understood. China is a massive environment with lots of manufacturers, all of whom are eager to please. The people making our cases could have created top-of-the-line products, but we were more interested in maximizing profit margins than monitoring quality.

The Chinese manufacturers were not to blame — we were. We wanted a product built to our exact specifications, but we neglected quality control from beginning to end and failed to communicate what we needed to our Chinese partners. If we wanted to get it right, we had to forget everything we thought we knew about Chinese manufacturing.

Valuable Lessons In Quality Control

After our failed first experiment, we took a deep dive into the world of Chinese manufacturing to understand where we went wrong and what we could do better. This ranged from being hands-on in manufacturing to serving as intermediaries between factories and resellers. Our five years of immersive study taught us a few valuable lessons that any entrepreneur looking to leverage Chinese manufacturing should consider.

1. American perceptions of Chinese industry don’t reflect reality.

Few Americans view China through a positive lens. In the midst of President Trump’s trade war, only 38% of Americans view China favorably. Our time in China taught us that Chinese companies are more than capable of producing great products, but tensions between buyers and builders often get in the way.

We spent years as middlemen between factories and American buyers. Both sides wanted to maximize profit, which usually led to cut corners. The companies that were willing to pay for quality received quality, while those that pinched pennies received products that reflected their budgets.

2. Distributors, not manufacturers, are responsible for quality.

Most companies that deal with Chinese manufacturers spend little time overseeing the process or putting quality control measures in place. They expect to place an order and receive the goods with minimal interaction in between — and for minimal price.

Our experience taught us that people who involve themselves in the quality control process receive substantially better products. When we finally started our business, we didn’t place orders with factories and wait to receive the shipments. We immersed ourselves in quality control, working and communicating with our partners to get the best products — not the cheapest ones.

3. Eliminating the middleman is the secret to success.

In our middleman days, we saw American companies tell Chinese factories what they wanted to build and what they wanted to pay. They expected to pay very little and then were upset about the quality of the goods. Go-betweens like us would struggle to get a factory to take less or ask a buyer to pay more. No one was happy about the price, and buyers were rarely happy with the products. It was a zero-sum game.

Without a middleman, though, things are much easier. Buyers get more input on quality, and factories can explain the specifics of different price points. Because we put in the work to build relationships and learn the industry, we better learned how to communicate our expectations about the quality of our products and charge an appropriate price to consumers.

Does our experience mean every retailer has to move to China to understand Chinese manufacturing? Of course not. Those five years were invaluable to our company, but the lessons we learned were simple.

If companies look to China for cheap manufacturing, that’s exactly what they’ll get. We chose a different path, investing in building relationships with factories and manufacturers that we felt met our quality standards. We invested in high-quality goods while remaining involved in quality control from beginning to end. Others who consider moving production to China should remember that product quality, not profit margins, is the key to long-term success.