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Why you can’t buy iPhones from China (and other branded products).

November 11, 2010 Articles 0 Comment

It probably doesn’t need a 500 word article to answer one of the most common questions we get in the business, ‘How do I go about buying brand named goods from supplier in China?’ The short answer is, don’t risk it! Given though, the amount of times we’ve been asked this I feel compelled to outline some reasons why we’d recommend staying away from attempting to import branded product.

The thing is, the big brands have done a lot of work to make themselves ‘wanted’ through their great products, service and marketing, so it only appears pretty lucrative to try and leverage off the demand they’ve created and start selling some stuff, right?…… WRONG. These brands don’t spent millions of dollars drawing consumers into their brands to allow a dollar company somewhere in the backend of the world to start purchasing and selling rip-off product at below normal retail prices, screwing up the market and consumer confidence in the brand.

Do you picture some Chinese guy standing at the back door of the warehouse selling genuine apple products (or any brand for that matter) to people purchasing low quantity orders from countries all over the world, while container after container of ‘real’ product leaves out the front door bound for genuine apple distributors all over the world? If you do, you’re certainly mistaken I assure you.

Would there be sense in a Chinese/Taiwanese/Japanese manufacturer blatantly jeopardising their supply contract with any of the giant brands just to be able to supply orders out the back door as well?

In the Apple Supplier Code of Conduct, Apple address this openly stating; ‘Corruption, extortion, and embezzlement, in any form, are strictly prohibited and may result in immediate termination as an Apple supplier and in legal action.’ Other protection measures taken by larger companies also include the practice of having homeland staff living or working at the manufacturing facilities overseeing production and supply day-in day-out, to ensure product quality and IP security.

There’s no doubt that you’ll be able to find a wide range of ‘branded’ goods available on line claiming to come direct from the manufacturer. The Chinese are very good copiers, and there are enough unscrupulous manufacturers that will look to take advantage of Westerners looking to China to purchase branded goods and make a quick buck. However, there is increasing international pressure on the Chinese government to reign in the out of control trend to copy and exploit international brands and IP. Over the years to come this will force these unethical manufacturers and other third parties empowering them to go further underground or look for other ways to make the deal.

China agreed to implement the Trade-Related Intellectual Property Agreement upon accession to the World Trade Organisation in 2001.

The time is coming when China will get far more serious about dealing with the issue in order to comply with this agreement, so even if you’re able to set up a small business now from a supplier producing copied branded items, you’re unlikely to have a supplier that can grow with your ‘business’.

So what are your options then?

Start your own brand. Find a legitimate manufacturer that’s producing good quality product who can brand it under your name and start from scratch. You’ll be able to land very competitive product and will have the sense of pride that you’re doing it ethically and building your own brand.

Find a distributor. If you’re still committed to the idea of selling brand name goods, that’s fine. Just explore the current distributors in your local market for your options. All the major brands will have mature distribution networks you must adhere to if you want to be involved in their brand.

Once you step outside this avenue in preference for the unconventional supplier, expect you’re taking a risk. Your money, your business and your reputation are all put on the line when you choose the ‘seemingly’ more lucrative option.

Stay smart. China can be a great market to work with if you do it right.

Related posts:

  1. Sourcing Products from China – Where to Start?
  2. Case Studies – A look at why people use professionally sourcing/quality control companies.
  3. Product Margin and Selling Price Calculator – How to Import Successfully

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