QUEENSLAND small businesses are following in the footsteps of their corporate counterparts by taking advantage of low-cost suppliers in China – saving in some cases hundreds of thousands of dollars.
But while as many as four in 10 local small businesses could benefit by sourcing products from Chinese suppliers, probably only 5 per cent do so, according to a Brisbane-based cross-cultural business consultant.
Since starting China Direct two years ago, Lindy Chen has helped more than 50 clients, including Merlo Coffee and MiniMovers, overcome cultural and practical barriers to doing business with China.
Ms Chen, whose career in her native China included a stint with CSR, says most smaller companies want to take advantage of Chinese suppliers but don't know where to start.
Many that do have seen negotiations founder on cultural misunderstandings, winding up with their fingers burnt in the process.
"There is common ground to do business together and make it work, however, the approach, the method and the communication are totally different," Ms Chen says. "Sometimes Chinese say 'yes' and you think it means 'yes' but it means 'I heard you'; it doesn't mean 'I agree with you'."
However, a successful agreement with a Chinese supplier can mean serious cost savings.
Rohan O'Reilly's Alternative Foods company saved about $130,000 on cheaper packaging for its Mototo Dairy Free ice-cream, Ms Chen says. Packaging is an area in which Australian manufacturers can look to China to make their products more globally competitive, she says.
But costs can be shaved off everything from plastic bags to blankets.
For Gail Gailbraith of Chillout Australia, having her warming/cooling dog beds manufactured in China means more time to develop her business. The Gold Coast-based solo businesswoman has just placed an order for 1200 beds, which she expects to receive in early July and sell in pet stores and vet surgeries.
Making the beds herself in her garage, it would take more than a year to produce as many.
After advertising last year for a sewing machinist who never materialised, she went to one of Ms Chen's seminars hoping for an offshore solution. "Lindy's . . . done it all for me, rather than going to China myself and trying to find people
. . . I'm just a single mother with three children to feed and I just didn't know what to do," Ms Gailbraith says.
Now that she has the Chinese supply contacts, Ms Gailbraith says it will be easier to move ahead with her next project: producing a different kind of dog bed for animal hospitals.
Despite all the interest in China, with many Hong Kong-based brokers claiming mainland connections, Ms Chen says China Direct "hasn't found any real competitors in our field".
Clients continue to flow in throughreferrals by Austrade and the Queensland Department of State Development, not to mention word of mouth.
"Once I have one client on board, they can really see the value for money – their investment was five or eight grand, however they can save like 40 grand or 80 grand easily," Ms Chen says. "So they refer me to friends and other people in business and so we pick up clients like that, one after another."
Not that sourcing from China works for absolutely every business. "We are very straight and open with the prospects," Ms Chen says. "If we do not see the value or we can't add value to their business, we say straight away: 'Don't use us.' "
