Buying From China - RC Groups
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Nov 25, 2009, 09:36 PM
If first you don't succeed...

Buying From China

I'm trying to gauge the interest of small US-based hobby stores and vendors who purchase parts and supplies from China in developing a relationship with an American purchaser/distribution coordinator on the ground in China.

Let me explain a little about myself: I have lived in China for over four years (currently back in the US), studied Chinese at UCLA and Peking University, and have taken up RC planes as a hobby. Also, I'm currently underemployed in my current field - commercial real estate. After reading a few posts on this and other sites, and after speaking with a gentleman who would like to retain my help in negotiating the purchase and translation of design specs and business terms with suppliers in China, I began to wonder if I couldn't marry my Chinese and knowledge of negotiation/business practices in China (I have a master's degree in International Business Management focused on China from UCSD) with my interest in RC to help small hobby stores and vendors close the pricing gap between themselves and large hobby enterprises that have established supply chains to China.

The number one complaint I hear from those trying to source from China is the lack of information on the quality and dependability of sourcing from anonymous producers out there in Chinese cyperspace. And even if you get a good and honest supplier, small hobby stores and domestic vendors have little purchasing power as their orders are but a fraction of the Chinese supplier's total orders. So smaller players either have to roll the dice with an unknown supplier, or pay the markup of Chinese-sourced products which have already been imported from established US distributors.

Like pooling any group of small consumers, I was thinking I could represent a consortium of hobby stores and vendors that lack individual purchasing power. As a group we would determine a basket of goods that all in the group are interested in purchasing from China. Together, this group would have purchasing power and the larger the group, the greater the purchasing power. My take would come off the back end - from the suppliers themselves. My leverage would stem from the fact that I represent what would essentially be a syndication of domestic purchasers of RC products. AKA, large and stable order flow for the suppliers.

Why don't I take the traditional distribution route and invest in a container full of parts, import them, and sell them in the US? Well, I don't have the capital and I don't know what is in demand - I'm not well-positioned to expose myself to the risk such a purchase would require. I could morph this idea for a different purchasing country (I lived in England and France for a while and would consider setting something like this up in the UK or on the continent), and I have friends from college who work in import/export from Shanghai. Moreover, my wife's family (Chinese national) live in Dongguan - which has been called the "workshop" of the world by the Economist magazine - where a majority of the Chinese RC suppliers maintain operations (Dongguan is essentially a name given for the industrial suburbs of Guangzhou...factories as far as the eye can see and then some).

Please let me know any weaknesses and strengths in the idea. I believe meeting with and seeing the operations, together with the indispensible personal aspect of doing business in China, would allow us to source quality RC products at wholesale prices paying ocean freight - not air mail - shipping costs. Please discuss.
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Nov 30, 2009, 11:39 AM
Registered User
Dennis Everett's Avatar
This is a very good idea , we asked our local hobby shop why they didnt buy from hobby city in bulk , mark up the price , and resell , the hobby shop knows we buy from hobby city , they (hobby city)sell good products , only major complant is returning products , so if you fix the high shipping (by boat) and make returns easy , sounds like a win win to me..........but hey , im just a consumer......
Dec 05, 2009, 10:50 AM
badpilotto's Avatar
Your just the person I wanted when I start my online hobby shop. I was planning on making a trip to China to establish accounts, relationships and develop the ordering system/software (enterprise type). Your idea would cut down costs in the short run. Have you written a business plan yet and if so could you PM a copy? The company I plan to open is still two years away but my shipping plan is by sea container and depending on volume, how often. As you, stated many small companies could pool recourses to increase container size to reduce shipping costs. A sea container will cost 1200 for a 20ft but I am sure this is only from port to port. Additional trucking and dividing will increase costs. Have you looked into other import companies and their fees/operations? I have not yet but will in the next year. I think currently the market is still depressed but this will not last forever and I am still purchasing RC parts and planes to fly.

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