These days, it's been a year since the client from Serbia contacted us for the first time and hired us to find and send him two machines for his company's needs. These are CNC machines for cutting openings for sinks on marble, granite and artificial stone, as well as a simpler machine for cutting stone at an angle of 45 degrees.
In this text, you will read why the client contacted us, how the negotiation process went, the process and control of the machine's manufacture, problems during transportation during covid, and finally you will see the operation of the machine in the plant and the customer's impressions.
We did not want to expose the customer and publish information about the name of the company or the name of the owner of the company, but we are allowed to show you the operation of the machine in the client's facility, and you will also see the process of making the machine as well as our factory control during the making of the machine in China.
p>The client approached us about the purchase, since the offer on the Internet is quite colorful in terms of prices and quality, but also out of fear, because as he says, it is not the same to give a lot of money to anyone. He sent us pictures and a video of the CNC machine, what it should do and what specifications it should meet, but also his target price, that is, we should try to find a machine in the given price range that meets the specifications given to us.
After studying the specification, we started contacting the manufacturer and finding the right machine. We contacted various manufacturers for a few days and from the pile of offers we selected one that, in our opinion, best met the target price/quality ratio. We have found a manufacturer who will build both machines at a price that is acceptable. This is very important to reduce transport costs.
Our client was satisfied with the price, terms of purchase and the machines we found, however, as it was the spring of 2020, the beginning of the corona and the first closures, he decided to wait with the purchase. At the end of October, the customer contacted us again, this time with a request to start implementation.
Whatever product you make in China, especially if it is this sophisticated, it is important to determine all the details about the product before starting production so that there are no problems later. In the next couple of weeks, we negotiated the details of the machine with the manufacturer, and we lost the most time regarding the knives used by the machine, which are made by another manufacturer.
Unfortunately, we lost a couple of weeks there, which no one knew at the time would significantly affect the final price of the machines. The deadline for production was 30 days, from the day of the advance payment of 30% of the total cost price. We agreed on the details and the manufacturer started the production of machines at the end of November.
No one knew in November 2020 that the price of transporting containers would explode by the end of the year and jump from the usual 2100-2500 for that time of year to 5000€ for a 20ft container.
During production, we visited the manufacturer and filmed the factory as well as the process of production and testing of the machines. We regularly sent all those recordings and pictures to our client. You can see one of the many videos in this text below.
Anyway, at the beginning of January 2021, the machines were finished and ready to be shipped. The predicted transport price from November of around €2400 had to be corrected. We give the shipping price only when the goods are ready to be shipped, and it was around €5,000, which was the current price at that time.
This transportation price disruption continues today.
Both the buyer and we were at a loss as to what to do, whether to wait a few days to see if the transport will go down or start implementing it as soon as possible, since the price of transport can go up, and the New Year holidays were approaching which last quite a long time in China. It was decided that there was nothing to wait for, the first available container was booked (at that time it was difficult to find a container) and the goods left for Serbia. Unfortunately, only on 19.01.2021
When the container is sent you can track it yourself. In the picture below you can see when our container entered the Adriatic Sea.
The goods arrived in Serbia, were cleared by customs and taken over by the buyer. The duty on the import of new machines from China is 1%.
Today the machines are in the customer's facility and he is already working with them extensively.
Although the transport cost more than expected, the customer was satisfied, and here's why.
In China, the domestic RMB currency is pegged to the US $, while in Serbia the substitute currency is €. Which means that the product price in China expressed in USD will always be the same, unless there is a change in raw material prices or a significant change in RMB against USD.
On May 28, 2020. we got a price from the manufacturer that suited the customer. The implementation of the work started at the end of the year. Although the USD - RMB ratio in the period of 28.05. - 06.12.2020. significantly changed, the seller did not correct his price expressed in $ and remained at the first price given in the spring.
Look at the savings when shopping vs. shopping time.
On May 28, 2020. €1 was worth $1.10169, while on 06.12.2020 1€ was worth 1.2159usd.
In that case, we perform the following calculation:
- For goods that cost $10,000 in the spring, their value was €9,077, while at the end of the year the goods in € cost €8,224, difference = €853
- For goods that cost $20,000 in the spring, their value was €18,155, while at the end of the year, the goods in € cost €16,448, difference = €1707
- For goods that cost $30,000 in the spring, their value was €27,233, while at the end of the year the goods in € cost €24,673, difference = €2560
So for the value of the goods of $30,000, the savings on the $/€ exchange rate difference, as you can see, was €2560, which roughly corresponds to the increase in the cost of transporting one 20ft container. The bottom line is that if the goods were delivered in May 2020 or as they left in January 2021, the total purchase price is about the same.
Unfortunately, if we had started the implementation two months earlier and if the goods had sailed in the 11th month before the increase in the price of transport, this would have been a savings for the customer, this is how the money was spent on transport.
Apart from this, it is even more important that the entire procurement process went through the customer simply and safely. At every moment, our client had feedback on what was happening in the process of making the machines. When they finally arrived, both machines were in excellent condition, and the CNC machine even had more functions than the customer asked for.
Transportation price disruption
At the end of 2020, the price of transportation became 2-3 times higher than usual. The lack of containers and the slowdown of the economy all over the world, except in China, are cited by everyone as the reason for this, which is true. However, on the other hand, we all know that the corona pandemic has captured the planet and that the most sought-after goods are medical masks, gloves, etc.
We have already had several announcements that there will be a drop in transport prices (first we were told "we expect a drop in prices after the Chinese New Year", then "it is expected in May", now we have a "tip" that prices will drop transport to come in September), however, instead of falling, the price of transport is increasing, and the answer is simple.
Until the corona virus passes, the price of transport will not fall in most of the world. For someone who imports masks whose purchase value per container is approximately 300,000 USD, whether the transport is 2000 USD or 10,000 USD is almost irrelevant.
Advantages and disadvantages of buying machines directly from China
Many specialized machines are simply not available on the domestic market, so they have to be imported.
The basic and most important advantage of importing machines from China is the PRICE.
The savings can be significant, double or even triple some things can be found cheaper and cheaper in China.
If you decide to buy a machine directly from China, you will probably get a better deal than buying it in a local store or from another country (e.g. Italy, Germany, etc.). produced in China.
If you decide to buy a machine from China on your own, that is, without an agent, please pay attention to all the details of the purchase. Let's say you find a bargain machine that looks great in the pictures and the seller has been on Alibaba for a long time and has serious references. You decided and ordered the machine independently, but when the machine arrives you realize that you didn't get what you wanted and imagined.
Don't doubt it, if the Chinese can steal somewhere, they will do it.
The cheap price implies that there is NO instruction manual for installation and use (or you get it in Chinese), the machine does not have the appropriate certificates, the materials used look poor to say the least, with a poor finish.
The machine works badly, cannot be adjusted or in the worst case the machine does not work at all!
What then? Then who should you complain to?
So if you are buying independently, don't let the price be your only decision factor.
Without an agent (someone who will represent you), never buy the cheapest machines from China from the websites.
Many importers order machines from China and resell them on the domestic market. If you are not buying with the help of an agent, then perhaps it is better to contact them.
If you need help importing machines from China contact us