We are Dongguan Worthy Hardware Co., Ltd. Our main products include CNC machining parts,CNC milling parts,cnc turning parts, sheet metal fabrication parts, injection molds and plastic products, precision stamping parts, which can be customized from prototypes, small batches to large batches.
Due to the characteristics of the industry and products, our end customer groups are mainly foreign customers. Therefore, in the first few years of the establishment of the factory, we mainly cooperated with domestic foreign trade companies. During the period of cooperation with them, we are in quality and technology. Sufficient experience has been accumulated in all aspects.
We are determined to export for two reasons:
1. The payment method of foreign trade bills is generally better than domestic trade bills. TT (Payment before shipment) and LC (Bank Letter of Credit) are the most common payment methods for foreign trade orders, while billing (payment in 1-3 months after shipment) is the potential of domestic trade orders. Rules; compared with the two, when receiving foreign trade orders, the risk of payment is greatly reduced and the cash flow is much better
2. Foreign trade orders are more stable than domestic trade orders. Foreign customers hope that the supply chain will remain stable. After selecting a few suppliers, they will generally not change easily. In contrast, domestic trade orders are more variable, and personal relationships and relationships will affect business.
It is also the above two advantages that strengthen my determination and confidence to vigorously develop foreign trade.
So in 2012, we formed our own foreign trade team, which had only two people at that time. Around November 2015, we started to learn about MIC through a friend's introduction, and also learned about Google, Alibaba International Station, etc.; after several months of investigation and analysis, we joined alibaba in 2016. After joining alibaba, the number of foreign trade team has gradually increased due to the increase of customers, and has now grown to 6 people. Now, 85% of our factory's products are exported to Australia, the United States, Europe and Japan.
Compared with domestic trade, the foreign trade market is an infinite cake, waiting for those with the ability to divide.
Domestic trade is domestic trade. Goods bought from a domestic trading company are then supplied to another larger trading company. Finally, the big trading company directly deals with the buyer, while the small trading company eats the intermediate benefits. The most common trading company is the earliest leather bag company. For domestic trade, the distinction between domestic and foreign trade should be based on the entry and exit of the customs. If it exits the customs, it is foreign trade. Transportation within the country does not mean that you cannot go out of the customs. If you enter or leave the bonded area, export processing areas or bonded warehouses need to declare.
Therefore, the biggest difference between domestic and foreign trade is: whether the customer is domestic or foreign, the price and profit are more or less.
Transition from the domestic trade market to the foreign trade market is the only way for the long-term development of an enterprise
As far as the domestic trade market is concerned, domestic demand is also great, but it is usually not in direct contact with the demander. After several middlemen, the price and profit of the factory are very limited. As for the foreign trade market, the number of customers will be much larger than that in the domestic market, and the transaction will be directly conducted with end customers without going through middlemen, eliminating the difference between middlemen and getting better prices and profits. Therefore, the transition from the domestic trade market to the foreign trade market is the only way for a company's long-term development. The competition in the domestic trade market may be 10-20 or even dozens of peer companies, and the competition in the foreign trade market may only be 3-5 domestic peers, and the competitiveness is reduced by several or several folds; and the domestic market is already overwhelming. Less, the foreign trade market is an infinite cake, waiting for those who have the ability to divide it.
In recent years, with the country’s economic downturn and the gradual disappearance of demographic dividends, the overall domestic market has shown a sluggish trend. Many companies have fought price wars in order to grab market share. The rise in labor costs and the rise in raw material prices have further increased corporate profits With the decline, many companies that focus on domestic trade have transformed into foreign trade. The transformation of traditional enterprises may be e-commerce or foreign trade, and appropriate transformation will be carried out according to the nature of the factory's products.
It's not difficult to start foreign trade.
For the transformation of foreign trade, I suggest the following 5 preparations:
1. Understand the foreign trade process;
2. Know the market conditions of your products;
3. Open a collection account and method;
4. Clear and clear, and do online promotion;
5. Understand the time difference and customs of various countries and regions, as well as the requirements for products.
Of course, along the way, we have indeed encountered some difficulties on the road of foreign trade:
1. There are a lot of emails sent to the development letter and few responses from customers
Solution: Adjust your mentality and persevere; try to write development letters in different ways, and bring more company product pictures.
2. Some customers compare prices so badly that it is difficult to compete no matter how to reduce costs
Solution: In the design of the product processing flow, the needs of customers must be considered. Some customers require low prices and some customers require good quality. Look for quality customers who match yourself.
3. Difficult to collect
Solution: The first 2-3 cooperations are all collected before shipment. During this period, it is checked whether the customer is a high-quality and reputable customer, so that the subsequent cooperation can provide different payment terms.
There are difficulties and solutions, and sometimes the ideas of domestic trade before are also applicable to foreign trade.