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Direct importing, is it really worth it?

The wide format industry is becoming increasingly competitive on many levels these days. More aggressive marketing from the Chinese and Korean manufacturers is tempting more end users to give them a try. Buyers it seems are prepared to take a risk if it means bigger profit margins for their efforts.

There is no doubt either that it is making it harder for the major brands and local wholesalers as they try and claw back their own margins with the weaker Australian dollar.
It seems every price rise makes the gamble of buying direct from China a more acceptable risk.
With a 10 roll minimum, several smaller shops have already contacted me to suggest that it might be time to look at a buying group and take advantage of the deals being offered from the Chinese, cutting out the wholesaler.
I must confess it has crossed my mind too.
To be honest, given my higher profile in the industry, I get contacted weekly from overseas manufacturers encouraging me to come onboard with a whole range of products. My involvement with the Australasian Professional Vehicle Wrapping Association only encourages these overseas groups to target me more. The phrase ‘made to an Avery standard’ or ‘better than 3M’ feature prominently in their sales spiels. They clearly know the brands they have to beat.
For the record, I did pursue the concept to the point of doing the math and buying samples. I found that some manufacturers offering me deals are already supplying some of our national wholesalers in Australia.
I discovered my landed price per roll was half the price of a single roll bought from those same wholesalers. But, to be fair, if I was to buy 10 rolls of the same product from the Australian wholesaler as my Chinese friends insist, the savings were not nearly as attractive and you’d have to ask whether it was honestly worth the trouble. There were savings nonetheless.
I approached a rep from one of the wholesalers concerned and he told me that their product was produced with a Kraft liner and was a manufactured especially for them. So, he said, what I’d buy from China from the same manufacturer would in fact be inferior due to their product having a better liner.
It was a fair point.
I went back to the Chinese and suggested I’d prefer a Kraft liner instead of the liner they used. Within days I had an email claiming they now do a Kraft liner for all overseas orders as a standard supply. No extra charge.  
Since then, I’ve had emails telling me their product is now using a bubble free adhesive, is now using a grey block out adhesive and the last email tells me it is HP approved for Latex printers.
So, for the sake of the exercise, I got a quote on 10 rolls to be sent to Australia.
The fine print was an interesting read. First and foremost, you can’t mix rolls. It is a minimum of 10 rolls of each item. Also, there is no Australian warranty at the prices they were offering. If I wanted to make a claim on a defect, I had to ship the product back to China at my own expense and they would do the appropriate tests to see if I had a claim. If they deemed my claim as warranted, they would credit me on my next order. Freight and any other costs would not be reimbursed.
Can anyone else hear any alarm bells ringing about now?
I was speaking to a gentleman a while ago who was enticed to buy a small order from China and he told me something that I have since been told is well known in importing circles.
He purchased a couple of small orders, several times a year. He got very little complaints with the product he was buying and was gradually pressured by his Chinese suppliers to take the risk and buy larger quantities less times a year. The discounts they offered seemed too good to be true. After a while he decided to ‘go for it’. Long story short, over time he had more dud material than he had good material. Any savings he’d made in the larger buy was eroded by the bad stock he had to buy back from his clients. It eventually ruined his reputation and he closed his doors.
I’ve heard similar stories from individuals that buy their own inks, film and even machinery. Importers tell me it’s not uncommon for some less reputable Chinese exporters to slip in a few duds knowing you’d probably not bother claiming back the stock, given the expense of making a claim under their terms and conditions.
For the record, I’m not saying that all Chinese suppliers are rip offs, but unless you have a good relationship with them, how would you know? You also need good negotiating skills, or be prepared to pay a professional who does the negotiations for you. That can also be expensive.
I have a client that is a buyer for one of Australia’s leading electrical tool suppliers. The company he represents send their buyers and engineers over to China and inspect every shipment before they leave China. They leave nothing to chance.
Another client imports gift lines. He also goes to China and inspects every shipment as it’s loaded. It is a common theme among importers that I’ve spoken to.
I heard of one Australian company a few years ago that purchased a shipping container full of banner material only to find the stock was unsaleable. It was nothing like the sample they signed off on.
There are lots of horror stories out there, but I also know of a few bigger sign shops that do import their own inks and materials without any hassles whatsoever.  There are some good Chinese exporters without a doubt.
So after all my costings and calculations, do I think it is worth it? Is it really worth the savings?  No, I’m not really sure it is.
Personally, I think you are best to concentrate on your relationships with our established wholesalers here that have invested time and money on inventory already.
In recent years, the major brands have established a good solid network of suppliers.
3M have added Spicers to their already solid base of wholesalers like Australian Visual Solutions and Halifax Vogel Group.
BJ Ball is also now online for Mactac in Australia and making serious inroads into the wide format market here. CPI Group and Celmac also offer the range and are well established.
Ricky Richards are another wholesaler quietly chipping away at the market with Grafiprint, easily one of the most under rated products out there.
Avery has also a well-established network with Graphic Art Mart, Conect Enterprises and Spandex.
Another supplier, Shann (Shanndpm) has a product called Mojave.
Hexis of course has Stickittome Australia and PT Stores.
I deal with most of these suppliers and I think it fair to say that if you show them the same loyalty you expect from them, then everyone will be happy.
I don’t see the need to risk ‘everything’ just to find a small saving here and there.
From my own research, I think if you’d to go to any one of the suppliers mentioned above and buy 10 rolls in an order, their price will make dealing directly with China and its associated risks hardly worth it.
The alternative is to pay in advance to the Chinese suppliers then and wait 6 weeks for the supply to arrive. And seriously, if you are prepared to pay in advance to a stranger in China, offer to pay in advance to an Australian supplier and I’m prepared to hazard a guess that they will treat you ‘special’ every time you call. You’ll definitely be on their Christmas card list for the foreseeable future.
In reality, no one wants to pay more than we have to, especially in what is becoming an increasingly competitive market. But it isn’t it better to have the backing of an Australian wholesaler when we hit a snag than rely on an Asian supplier with no loyalty to us or our business whatsoever? For the little extra we pay, surely the support we get from our suppliers, not to mention supporting Australian jobs and industry, is more important in the overall scheme of things.
I don’t know about you, but every job I lose to an overseas producer is just one more nail in the coffin of our local industry. The same applies to our wholesale industry. Without them, our industry would be at the mercy of some pretty big players and I’m not really sure that we want to go there.

 

Shane Drew
www.vehiclewrap.com.au
 
  

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