Why work with Synergy Design and Development?

Cost Savings
of 20% or more over current Asian manufacturing and up to 60% over North American and European manufacturers
Security
in working with a Western company that has an established history and process for delivering quality products manufactured in mainland China
Expertise
in Chinese business culture, selection of reputable Chinese manufacturers and suppliers, negotiating costs, quality control, logistics, marketing and big-box sales in stores like Wal-Mart, Target, Wallgreen and more

Why is good customer service so hard to come by in China?

This is a combination of cultural issues, business focus and system problems. Culturally, the West has come to expect manners that are derived from monarchies and elite classes throughout the ages. Over the years, these manners have been thought to be a sign of “good upbringing” and have become an expected norm in business. The East also has a highly developed system of manners, but in many ways they are different than the West and things we do appear rude to the East and things done in the East appear rude to the West. For the most part, these are strictly appearances and do not have any underlying disrespect issues attached.

Also, business-wise, many Chinese businesspeople are clearly more focused on short-term profit, whereas the West focus more heavily on the long-term value of the relationship. Please note, that this is changing rapidly in China. 50 years ago, every customer and every vendor in China was the government. Now, the Chinese are getting used to repeat orders, have experience losing customers due to their own fault and they are changing.

As the economy gets tougher, expect even more positive changes in this area. The other great contributor to poor customer service in China are the poor systems that exist in many businesses. Ultimately, a business under stress will have lower levels of customer service. There is no greater contributor to stress than inadequate systems in a business. Again, the Chinese are making great improvements in this area. As the growth rate slows in China, many companies will now have the time and resources necessary to re-vamp systems and deliver better results and customer service. 10% plus a year average GDP growth for 7 years! It seems great from the outside, but managing that growth is not an easy task.

Why is intellectual property so difficult to protect and what can I do about it?

China is a Confucius-based culture, which differs greatly from the Western Judeo-Christian roots. Confucius taught that knowledge belongs to the people. This contrasts sharply with the idea of intellectual property protection. For these reasons, you should expect that deep down inside, the Chinese will never truly appreciate IP laws and protection. However, many Chinese businesspeople do respect the concept of IP and follow it, at least for business sake.

To protect yourself, educate your vendors as to how your intellectual property protection helps them and have them sign agreements that protect your property and define penalties for misuse. Most importantly, know your vendors. If you have IP that is worth protecting, it is worth your taking the time to visit the factories, have them audited and check their references. A well-run factory is more likely to honor and follow IP agreements.

What is likely to happen to the cost of goods in China in 2009?

The cost of goods in China have been a moving target since November, 2007 when the RMB began its quick acceleration. Since that time, we have had a commodity peak and crash in many categories, plus a worldwide contraction in spending.

We expect a continual drop in commodity pricing and a stabilization in most categories by second quarter 2009. Any prediction is dependent upon the movement in the price of oil. If oil stabilizes around $60-$64 per barrel in Spring 2009, many other commodities will likely follow suit. As for consumer products, the answer depends greatly upon the makeup of the item. If the product is primarily comprised of a single commodity (like an aluminum bake pan) we would expect that price to fall sharply in line with the raw commodity. If the product requires substantial labor and finishing work or uses a more stable commodity like paper or wood, the price will stabilize and possible increase slightly.

Overall, we expect prices to drop 10-20% in China for most products at least through March of 2009 and begin to stabilize during the last half of the year. Of course, any prediction is entirely dependent upon world markets and subject to adjustment based upon currency valuations.

How can I protect myself from product safety problems?

Every month, it seems to get tougher and tougher and the regulations and costs keep rising for testing and inspections. Protecting yourself is a serious legal matter, particularly if you are in the business of stationery products or toys. Here are a few simple rules that will help provide basic protection. Still, if you are in a high-risk category, particularly products for use by children, you need expert assistance. Don’t go it alone unless you are highly experienced.

Know your factory. Audit the factory, interview their current customers and ask them to describe specifically their experience with testing companies and laboratories such as BV, SGS and Intertek.
Hire your own testing company that provides random and surprise visits during production. Build a relationship with that testing company and take advantage of every educational program they offer.
Educate yourself and continue to educate yourself on the current and upcoming regulations in your industry. The United States Consumer Product Safety Commission (http://www.cpsc.gov/businfo/businfo.html and EUROPA Consumer Affairs (http://ec.europa.eu/consumers/safety/rapex/index_en.htm ) provide links and guidance on their websites.
Inspect the product throughout production and require the factory to inform you prior to changing any raw material suppliers during current and future production runs. You can incorporate this into the purchase order agreement and even require them to pay for re-testing if suppliers are changed.
Be well-insured. It is worth the money and allows you the financial coverage while you are attending to the public relations aspect of the problem.

How long does it take for delivery for most items?

Of course, this greatly depends upon the product and the complexity of any molds that are required. Here is a brief guide:

Simple consumer products that do not require plastic injection molds or if the molds are already made:
30-60 days

More complicated products, or those products that require plastic injection or other complicated molds:
60-120 days

Complicated projects that require product development, multiple molds, custom circuitry, etc:
120 – 180 days

Large machinery, custom-made heavy equipment, highly complex products:
180-360 days

Plus: add 10-30 days for safety testing (this can be shortened by good planning)
Plus: add 20-40 days for shipping, depending upon your distance from China

Who pays the freight charges?

Synergy will generally quote all products as FOB a port close to the manufacturing facility. This means that all China customs and transportation charges (exclusive of testing fees) will be paid by us all of the way until the container is loaded on the ship. You will be responsible for moving the loaded container to your home country and delivering it to your door. As a service with no fee, Synergy will provide competitive shipping quotes and contacts for you to review and manage the process at our end until your shipment arrives in the United States.

What are your payment terms?

Usually, our terms require a 30% deposit, with the balance paid upon presentation of shipping documents (about 3-5 days after the ship departs or we deliver the goods to your consolidator). We also accept transferable letters of credit in most situations. Please clarify all terms with our staff prior to issuing purchase orders!

A few exceptions:

Molds require a 50% payment upfront and balance upon completion of the mold(s).
Custom printing orders require a 50% deposit and a 50% final payment upon presentation of shipping documents.
Orders that require us to purchase goods in China and assemble them for you often require higher deposits and possibly payment prior to container loading.

Can you provide services a la carte?

Absolutely. If you have an established supply chain, but need Quality Control Inspections, we can do that. We also can perform Factory Audits, provide sourcing-only services and product design and development services. If you have any specific troubles in China that may benefit from a face-to-face visit, our staff can represent your interests for you in a friendly, yet effective way.

What type of consulting services do you provide?

Synergy has had a Mainland presence since 2001. We have extensive contacts in many industries that may help you. Primarily, our consulting services will fall into one of the following categories:

Quality Control and Factory Audits – We can be almost anywhere in the country within 48 hours of your call performing a quality inspection, auditing a factory or just showing up to let them know you are serious about your order!
Sourcing and Negotiation Assistance – Our bilingual staff has years of experience in almost every industry imaginable. We can help you locate factories, negotiate prices and make introductions. If you want to do business directly with the factory, we perform these services for an hourly fee or by the project.
Problems with Factories, Exporting or Representation – Tell us your problem and we will help you chart a course towards an acceptable solution. We know situations can get ridiculous in China. But, your first call should not be to an attorney. Sometimes a dinner or a surprise visit will be enough to get the factory back on course and we can do that for you. Other times, you may need somebody to go into the factory and look at their work process and make some simple changes that get the result you need.
Legal Issues – We are not attorneys, but can get you quickly in touch with the right people who can help you. We can also provide for you an idea on how to chart a strategy prior to your hiring an attorney. This could save you tens of thousands of dollars and get you more quickly to the results you seek.