RNCOS, an India-based market research firm, estimated that China’s cosmetics and toiletry market rose to an estimated $16.9 billion in 2008, as the country’s GDP soared. With such growth in consideration, the firm expects the market’s value to surpass $28 billion by 2012.

Color cosmetics and men’s fragrances have all taken off in China over the past year. Increased spending, driven by more disposable income and awareness of such products, have in turn called the attention of many major companies. As Estee Lauder sells to over 30 cities in the country, L’Oreal manages 16 brands total.

“Chinese people now like to try new things and advance products, and are more brand-conscious and more receptive to foreign ideas,” said Paolo Gasparrini, president and managing director of L’Oreal China, to the World Advertising Research Center.

China’s personal care market is second only to Japan’s, and is now the seventh largest in the world. But if it continues to report double-digit sales increases, China’s market could easily place within the top three within the next three years, as CosmeticsDesign-Europe.com reports. Paul Mak, president of Mary Kay’s Chinese division, even predicts that it will surpass the United States value in five.

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But as other countries – namely Vietnam and Cambodia – rise in hopes of seizing its industry role, China’s growth rate has finally slowed down. This change is now the subject of the third and latest issue of FIBER, a bi-annual online magazine created by the University of Delaware’s Department of Fashion and Apparel Studies, while funded by the U.S. Department of Education.

“Although China is the world’s largest supplier of apparel items, accounting for more than half of U.S. apparel imports, we see China’s economic growth impacting its competitiveness in the textiles and apparel sector,” said Dr. Hye-Shin Kim, project director and editor, in the issue’s introduction.

The latest issue brings up other important considerations about its future in sourcing:

• Since it became the largest apparel exporter in 1994, China experienced its first single-digit growth of 1.3 percent from January to September 2008, which follows a 23 percent growth during the same months in 2007. “Even without trade restrictions, U.S.-China textile and apparel trade in 2009 will probably see one of the lowest growth rates in the decade,” said Sheng Lu, doctoral student at the University of Michigan’s Department of Textile and Apparel Management.
• For the past ten years, China has concentrated its textile and clothing production in five provinces and one city in the country’s east coast. However, due to increasing local labor costs, their facilities have been sourcing its workers from the midwest. As a result, U.S. customers could pay less, but for lower-quality products, said Dong Shen, associate professor of family and consumer sciences at California State University in Sacramento.
• Overall production costs are increasing as well, causing China to reconsider its role in the global fashion industry. “If foreign companies need to produce complicated, high-quality goods, China remains a good choice,” Shen said. In addition, prioritizing quality over quantity opens up opportunities for Chinese fashion designers and manufacturers, plus anyone willing to partner with them.

For more detailed findings, visit the magazine’s official website to view the latest issue.

The earthquake tragedy in China is only the most recent example of how harmful disasters can be. Not only are they costly in human lives and sheer destruction but also in the number of businesses that will never open their doors to customers again. Disaster can occur on a smaller scale as well such as burglary, fires, hardware crashes and many more.

A White Paper produced by HP and SCORE reveals that about one-third of all respondents to a survey in the paper said they backup their data rarely, if at all. Most of the rest did it less than monthly, and yet 70% of small businesses that suffer a major data loss will go out of business within a year.

We can’t prevent disasters from happening but we can do our best to prepare for the worst. Here are some ways to minimize the loss your business could incur in case something should happen:

* Of course, the easiest and most obvious preventative measure you can take is simply to backup your data , and not just in the same location, but remotely.
* Important documents should be kept in a fireproof safe.
* Software should be utilized to prevent computer worms and viruses from destroying your hard drives.
* Create a plan to keep things running if something should happen. Assign roles and responsibilities as a part of that plan and walk through them with employees. Then keep the plan updated.

Insurance is also another key factor in salvaging a business in the aftermath of a disaster. Check out Small Business Insurance and Why You Need It for more advice.

However, times have changed.

The Yuan has been creeping up over the past year and is continuing to gain strength, while the Dollar is struggling in the world market.

For retailers, the impact is crystal-clear. It shows up on their invoices. As the Yuan gets stronger, the items they purchase from China are costing more. In some cases, prices have doubled over what they were just a year ago.

For larger companies, while this is an annoyance, they can spread out the impact throughout their products and company sectors. For small businesses, this is not as easily accomplished.

So what is a small business to do?

Measure the Impact

First, take an honest look at what impact the rising Yuan is having on your business. If you regularly manufacture items in China or order products for retail sale, look closely at the increase you have seen in the past year.

Now, think about what will happen to your bottom line if things continue on this track for awhile.

Adjust as Possible

Now that you know what could happen if things keep going this way, it’s time to prepare for the worst. What can you change about your operations, sales, etc, to keep things going at your current levels while this economic shift takes place?

It may mean increasing your retail prices, or learning to do more with less in other aspects of your business for a little while.

Another option is to look into temporarily using less expensive materials or supplies to offer the same products, while waiting for the market to level out again.

Wait it Out

History shows that these economic fluxes usually level out. While it may seem painful right now, the economies of the world are often like a roller coaster ride. There will be peaks and valleys, but it will all even out eventually.

Do not make the mistake of making a rash decision like as getting rid of your Chinese suppliers, because of the current increase. Just have patience.

While the shift of the Yuan into record territory these last few weeks has many people in a panic, the smarter path is to take a deep breath, plan for this trying period and look forward to when the markets are once again on the level ground you are accustomed to.

Create a product binder – This is simply a three-ring binder with different colored folders for each of the product types you are interested in. Before you leave for the trade show, prepare a detailed product requirements sheet for each of the product folders. This sheet should look professional, as it can also serve as an addition to a purchase order. Your product binder should also include folders for: purchase orders (have several blank purchase order forms printed), contact information and business cards you will receive at the trade show, product sheets (that you will collect at the show), questions for suppliers (the questions will be covered next but once prepared, keep several blank sheets in this folder so you can fill them in as you talk with suppliers you are interested in purchasing from) and miscellaneous information. Taking a product binder with you to a trade show is one of the best ways to help you stay organized and avoid later having to sift through a sea of papers.

Prepare a question sheet – Once you find a product that you are interested in, you’ll want to sit down with the supplier to make sure that you are comfortable with the company and that they meet your requirements. Here is a list of questions you may want to include on your question sheet:

* What is the FOB Hong Kong price? That is the price including delivery to the port. You will then have to arrange for transportation from the port to your warehouse.

* What is the minimum order quantity? You’ll find that some suppliers will only sell in container sizes – 20′ or 40′; however, there are others who will agree to sell in smaller quantities – for an increase in price, of course.

* What is the lead time? With this question, you’re asking how long it will take for the goods to get to the Hong Kong port, once you place the order.

* What are your payment terms? Most suppliers will require a percentage of the purchase order total up front. Typically, this will be about 20-30 percent; however, if you are having the products or packaging customized, then the down payment could be as much as 50 percent of the order total.

* Do you offer OEM/customization services? If you wish to have your own logo on the product, or unique product packaging, then you can find out if and how a supplier is able to work with you.

* What quality assurance procedures do you have in place? If they mention a third party quality assurance company, you may want to ask for their contact information in order to double check the information.

* Have you exported to the U.S. before? If so, you should also ask: 1) May I have the contact information to some of your U.S. clients and 2) Do you have the certificates and approvals for this product that are necessary in the U.S.?

* Are you a manufacturer or a trading company? While a manufacturer actually owns the rights to the product and manufacturers it, a trading company is a representative for a manufacturer; many times a trading company will represent several manufacturers.

* Do you have an export license? If not, they will be able to go through an export company, though this may add additional costs to your product.

Placing a purchase order – If the supplier has samples at the trade show and the company was able to answer all your questions satisfactorily, you may decide to place a purchase order right at the trade show – many buyers do. However, if this is your first importing endeavor, you may feel more comfortable collecting all of your trade show information and then reviewing it once you are back in the office. In this case, it would be wise for you to order product samples from the suppliers you are interested in (you will be asked to pay for both the product and shipping). Or, you could ask a supplier if you can place a small initial order, lower than the manufacturer’s typical minimum order.

Attending a trade show in China is both exciting and overwhelming, but being well prepared and organized will definitely make your trip less stressful and more productive!

Never take your potential business partner’s word that they are an established company. Always verify them by checking several sources, including:

Chinese yellow pages listing - This is a good place to start. Most scammers won’t bother placing a listing here because they don’t want to give out their contact information publicly. However, not all legitimate companies list with these pages either, so it’s a starting point, not an end point. The websites are in Chinese so they will need to be translated, or if you know just a little Chinese you will be able to get around the site and look up any company. Here are a few listing sites: www.yp.net.cn , www.chinaeall.com , http://www.cnaic.org.cn/ .

Contact information - As mentioned above, many scammers don’t like giving out their contact information. Always ask for a street address, phone number, mobile phone number and fax number. Then check each of them out. If you have other contacts in China you might ask them about checking out the physical address – just in case the scammer is giving you a fake address.

Government issued corporate number - In order to be a legally operating company in China, every business needs a unique corporate number. Scammers typically do not have this number, so always ask for it. However, you will need to verify it in case the scammer is giving you a fake number. You will need to check the government office of the province in which the company is located. For instance, for the Changsha province, the website is: http://www.csaic.gov.cn/ .

Embassy records - The U.S. Embassy in China keeps records of reports and claims made against scammers in China. It’s a good idea to check the company name and any contact names with the Embassy. Their website is: http:// www.buyusa.gov/china/en/

If everything checks out, then chances are the company you are dealing with is a legal and legitimate company in China. That’s great, but your research is far from over. Just because they are a legally operating company doesn’t mean that they are trustworthy or reliable. Just like companies in the United States, there are plenty of registered businesses that operate in a less-than-honest fashion. So, how can you make sure that your potential business partner is one you can trust? Your best defense against unscrupulous companies is the Internet. Do a Google search for the company name and the names of any individuals you have been dealing with. You can also ask around in online wholesaler and importer forums and see if anyone has worked with them before.

On the internet, negative word of mouth spreads fast. So if someone’s been burned by a Chinese company, there’s a good chance they’ll spread the word to warn others.

As cynical as it may sound, the two biggest pieces of advice when importing are: trust no one and do your research! There have been too many horror stories of buyers losing money, getting fakes, damaged goods or never getting any shipment at all to think that something like that couldn’t happen to you. However, if you are smart and take all the necessary precautions, you can ensure that your importing experience goes smoothly.

Risks to Look Out For

Fraudulent company – Just because someone tells you their company is a “top exporter”, manufactures products of the “highest quality” and sells to big companies, doesn’t mean they are telling you the truth. However, having the internet on your side makes fact and reference checking easy. To avoid being taken by a less-than-trustworthy company, you should take the following steps:

1) Do a thorough search on Google using the company’s name,

2) Go to wholesaler forums and ask if anyone has dealt with the company,

3) If they claim to do business with a large company, then call that company and find out if it’s in fact true,

4) Talk to the U.S. Embassy in that country and see if they have any records on that company. For China, the website is: http:// www.buyusa.gov/china/en/ .

Unreliable goods – Unfortunately this happens quite a bit. You are shown pictures of products and assured that they are made from certain materials and of the highest quality, etc. Then, when they show up at your warehouse, they are not exactly the same. You may have ordered leather products, and they may instead be a different color or perhaps vinyl or PU (Polyurethane) leather instead of real cow leather. In addition to taking the precautions listed previously, you should also: 1) Request a sample, 2) Make it clear to the overseas company that you expect the exact same goods you were shown and list out the product specifications in writing 3) Have them take several pictures of the merchandise as it is being manufactured and packed, and then email them to you. Companies who have been in business a long time or who have a good reputation are less likely to try to pull this on new customers.

Branded goods that are actually fakes – If you feel like you are getting a “too good to be true” price on iPods or Sony Playstations, then they are probably fakes. No matter how much the overseas company assures you they are the real thing. Even if they show you a picture and you are convinced it’s real – don’t be. Many times they’ll just email a picture of the real product or a fake that looks just like the real thing. Recently, Consumer Reports magazine printed pictures of fakes next to real merchandise and it was hard to tell the difference – everything from New Balance sneakers to iPods. If your retail store tries to pass counterfeit merchandise off as real, both you and your company will be in big trouble – it’s a federal crime! Learn how to tell the difference by checking out our 10 Golden Rules for spotting fake products .

Longer than expected lead times – Overseas companies are notorious for their long production and shipping times. If they tell you 30 days, expect it in 60 days. As long as you expect there will be delays, you’ll never be disappointed with a ship date that keeps getting extended.

Unexpected charges – Many buyers new to importing don’t realize that most of the prices given are FOB Hong Kong – meaning that the shipping charges to your warehouse are not included. There’s also customs fees, import taxes, etc. Do your research and figure out your actual cost of importing before you have placed your order with the factory or manufacturer. Otherwise, you will be in for a huge price shock!

As long as you take the time to do your own research (and plenty of it) you can avoid all of these risks. The problem most first-time importers have is believing everything they are told by overseas companies and not checking the statements for themselves. Now that you’re “in the know”, it’s doubtful you’ll fall prey to any importing scheme!

To ensure that the Chinese vendor you’re interested in doing business with is trustworthy and reputable, you need to do an extensive background check as well as some online research before you place an order or give them money. Now, Chinese companies aren’t particularly forthcoming with customer references, so you will need to determine if they have a good reputation on your own. But, don’t worry, there are plenty of ways to see if a Chinese company is honest and provides quality products.

What you can do to help insure that a Chinese vendor is reputable:

1. Do a search on Google. Enter in the Chinese company’s name and see what information comes up. Take the time to read everything. You may also want to check other search engines, like Yahoo! to make sure that you are reading as much information as you can.

2. Talk to other U.S. importers. There are several websites devoted to businesses that import products from outside the U.S., including China. One site is TheImportForums.com , but there are also plenty of others, like the Importing/Exporting board in the goWholesale Forums . Ask members if they have heard of the company, or if they have had any experiences with them. Remember, members are on these sites because they want to share information, so most likely they are more than happy to answer your questions.

3. Have a professional research company find out for you. Believe it or not, there are companies out there whose business it is to do research, check references and perform background checks on foreign businesses and their owners. One company that specializes in Chinese companies is Chinese Company Research Services . There are several other companies out there as well, so if you do some research on Google you will come up with a list of research companies and then you can pick the one you are most comfortable with.

4. Talk to the U.S. Embassy in China. They have a Commercial Service division set up specifically to help U.S. companies do business in China. They can be of great assistance in helping you find reputable companies as well as telling you which ones to stay away from. Their website is: http://www.buyusa.gov/china/en/ .

Doing business with Chinese companies doesn’t have to be risky or even nerve wracking. You just need to do plenty of research before deciding to work with a particular vendor. If you don’t, you very well may end up with a pile of junk at your warehouse – and when that happens, good luck getting your money back. Avoid the hassles and headaches by feeling comfortable about a Chinese business before you hand over any money for products.

Traveling abroad is fun, but it can also be nerve-wracking. When it comes to a product sourcing trip to China, you will have three main concerns: money, time, and safety.

Let’s take a quick look into some of these areas and some ways you can plan ahead to ensure the best experience possible.

Money

As a small business owner, this will be one of your number one concerns in everything that you do. Of course, a product sourcing trip will largely be written off on your taxes, but that doesn’t mean it’s the high life for you; the last thing that you need is to spend three years’ profit on one trip.

It is important to budget well before your trip, and to take effective cost cutting measures where necessary. Here are a couple of ways to do it.

> Go with a group. If you belong to a group of small business owners, a great time to go on your trip is when there are others going as well. You will be able to find the best deals when working together, and can probably cut a lot of costs when it comes to accommodation, food and other expenses. There are organizations that take groups on special product sourcing trips to China regularly, such as the Apparel Sourcing Association (http://www.asapbuyingtrip.com/).

> Decide on pocket money at the beginning. Let’s face it – a business trip to China is not going to remain a business trip the whole time. There are things to see in that country that you may never get the chance to see again, and you will want to take advantage of that.

Decide exactly how much you are going to spend as tourist dollars at the outset; it should be a reasonable amount, and don’t go over it. The same goes for meals and transportation costs.

Time

The best way to efficiently spend your time on a sourcing trip to China is to plan your itinerary in advance. This means knowing the location of the manufacturers you will be visiting and the best ways to get there.

We think that the only way to go here is to use a good guide who will also act as a translator. These people can get you around much quicker than anyone else, and for the best value. Finding a good guide is not as easy as the movies might make it seem; you need to consult either with other people who have been on such a trip or with reliable staff at the hotel you will be staying in.
You might have to shell out a bit more money for a really great guide, but the time and money you save in the end will probably be worth it.

In addition, you will want to make sure that the companies you want to visit are alerted to your trip beforehand. Make firm times with them and be sure to be punctual.

Safety

In the Western world, we are pretty sheltered and spoiled when it comes to safety, and we tend to think that everyone else operates the same way we do. Don’t make this mistake. You are a visitor in a foreign land, and do not know enough about customs and protocol to be arrogant. Listen to your guide – and maybe even consider taking a few lessons in Chinese culture and etiquette before you embark on your trip. The last thing you want to do is offend someone that you are trying to make a deal with. Click here for some tips on working with Chinese companies.

You should also make sure to take out some health insurance policies before you go. Transporting an ill person can cost quite a lot of money, and you don’t want to discover that your plan doesn’t cover your costs after you have recuperated. Hopefully you will never need to use it, but a travel insurance policy will certainly be handy should anything unfortunate occur.

It’s a great idea to take a trip to China or whatever country you are planning to source products from, but you have to make sure that the trip is to your benefit. Keeping a close eye on everything and measuring it in terms of efficiency when it comes to money, time, and safety will mean a successful trip, and your business will reap the rewards.