BigWorldAndSmallWorld Blog

A Funny Story of One Yuan Becomes Billions in China

Posted in China business,Money by Administrator on the November 19th, 2012

I saw this on the internet, I thought it was quite funny. I had no intention to encourage you to do the same, nor did I like any of the doings. I translated it so that you can laugh about it and trash it. I didn’t mean to offend anybody.
One person got 1 yuan, he found a friend in the black market and bought a 50 yuan fake money. He used the 50 yuan to make a phone call at a small magazine stand on the street. The stand owner an old grandpa could not tell fake money from real money, therefore he gave the person 49.6 yuan change in real money.
The person went to an underground CD store, bought 9 CDs at less than 5 yuan each. Then he took a 5 yuan long-distance bus ride to a nearby town where he sold his CDs for 15 yuan each for a total of 135 yuan. After returning to the city, he used the money to buy 260 pens, sold them at 1.5 yuan each thus to make a total of 390 yuan…He used this way buying and selling different merchants, now he got 2000 yuan.
The person went to amusement park to look for a prostitute, negotiated 300 yuan for the service but he gave her 1000 yuan. This pleased the lady so she introduced more prostitutes to him. Then he found a close-out printing shop and used 500 yuan to print many flyers, posted them everywhere in the city. The flyer said 10 prostitutes could make you 5000 yuan per day, 150000 yuan per month, subtract 100000 yuan rent, you gain 50000 yuan per month, do you want to make the big money?
…Now the person had more money to make bigger deals. He went on making variety of deals such as buying special goods from Yunnan and sold it elsewhere for big profit, registering a real estate company, hiring employees, bribing local officials, gaining contract for government road constructions, becoming representative for foreign companies in China, building a website to lure investor’s money, rounded 200 million yuan in funding, IPOed the company and the company valued at 200 million in US dollars. On the first day in the stock market, the stock price multiplied 10 times, the next day he sold the stocks and made 1 billion US dollars. From there on, the person became China’s Bill Gates and Warren Buffett. Haha, the end.

How to Tell: You are dealing with a factory or a trading company in China?

Posted in China trading,factory,Tips for business by Administrator on the October 24th, 2012

Whether you go to a conference or exhibition in China, or search for a Chinese company online, many people worry about or don’t know if they are dealing with a factory or a trading company. How to differentiate these two? I am sharing some important tips here and I hope it is helpful. It is essential for you to learn them. In fact both factory and trading company have its own advantage. In the end, who you decide to work with largely depends on your experience and what kind of risks you are willing to take. Each circumstance is different; therefore we don’t recommend one solution for all.

1. This is the most import one among all tips: Only a few large factories in China have the licenses to trade with overseas companies directly; therefore most factories must rely on trading companies as the middle men to carry out the transactions. License to export is required by China’s policy and the policy has been in place for a long time. So ask a factory or a trading company to show you the license, this is a must.

2. Of course the product is what you want. Find out how good the quality is early on will help you make decision and save big in the future. So ask a lot of questions.

3. Ask for a business card, normally the business name will be on it. If it is a factory (厂或工厂), it will say so. If it is a trading company(贸易公司、外贸公司)or import or export company (进出口公司), it will say so too. Therefore you can tell from the name, it’s the easiest way.
Note: If you don’t know Chinese, I recommend you to learn some key Chinese words for your business. You will find it to be very beneficial!

4. A factory is able to provide you the original product certificate (CE) while a trading company normally doesn’t have it. The CE would clearly state which factory this certificate is issued to, match the name on the certificate with the business name.

5. Ask for pictures of how the product is made, again a trading company normally doesn’t have that information while a factory may be happy to show you.

6. A trading company may provide products from various different industries while a factory may provide products for only one industry. This may not be true for all factories, however a large percentage of the factories fall into this category.

7. Ask to visit the factory to see it by your own eyes how the product is made and the factory environment. A true factory would be happy to arrange a visit fairly quickly while a trading company may take a while because it has to go through contacts to make this special arrangement for you. So you can test the business to see what the reply will be.

8. It is always a good idea to get a quote from three vendors regardless it’s a factory or a trading company. Only then, you will have a better handle of pricing.

9. You should know that even though a factory may give you the lowest price and it usually has some rooms for you to negotiate to lower the price furthermore, while a trading company may give you a higher price because it needs to make a profit, a factory may ask you to purchase the product in a huge quantity. Do you need that much quantity?

10. A trading company may be more responsive to your request when issues occur because it wants to treat you their customer nice thus to confront with the factory on your behalf, while a factory may be somewhat difficult to deal with or delay responding you.

11. Unlike a trading company who is very familiar with overseas orders in terms of communication, negotiation, goods in stock, custom form and shipping, a factory may not have the experience or resources thus a factory is more likely to make mistakes.

I would recommend you to consider all facts and balance pros and cons; then you will have a good feel for what’s the best for your situation. As you acquire more experience dealing with Chinese companies, your preferred method may change too.