Chinese Distributors in the USA – Experiences of an American dealership
Eleven years – that’s how long I have been dealer of Chinese products. Since 2007 I have been writing a monthly column for Mega Motor publications as their American Correspondent. I have enjoyed many visits to China over the years, talked with manufacturers and owners, toured factories, shared tea and fantastic dinners, and have taken many excursions through the beautiful country. I love so much about China and the people I’ve had the opportunity to spend time with.
I like to write positive news about the powersport industry and to report how Chinese products are doing in the USA. Let’s be honest: it’s not always a pretty picture. I’ve had to speak out on what I see are mistakes in management, product development, dealer support, and so much more. I do this because I respect the industry and truly want to push for measures that boost the bottom line of profit, while at the same time we keep customers excited and coming back for their second and third vehicle. Referred to in America as constructive criticism, my aim is to help direct the industry in a healthier direction.
“Professor Stabler” today is going to review nine companies operated in America by Chinese manufacturers. These large, well-funded companies, chosen and supported by China served to move vehicles from manufacturers in China to retail dealers in America. None of them survived in California. I have done business with each of them, have relied on them for merchandise, and have met with them on many occasions.
The reasons these distributers failed are not difficult to understand. Business basics are the same everywhere in the world. Common sense tells us that no business can thrive without customers, and how do you recruit and keep customers? You stay in touch with what they want and give it to them. You listen, you learn, you adjust, you care about the clients that support you as you support them. The Universal Law of Business.
As a large dealership with customers drawn from a tri-state area, some of the elements that my company, ATV Wholesale Outlet Inc relies on from distributors are:
- Excellent communication and working relationship with knowledgeable staff
- Tech support for questions and problems
- Strict quality standards for products they represent
- Parts inventory for all products they carry
- Full inventory of vehicles at all times
Below is a sample of companies (real-existed companies but names are omitted here) that ignored the basics of business, and lost California as a customer:
*** USA Based in Chino California, main factory in Chongqing.
Company management: The general manager was from China and her managerial staff was from China. Warehouse workers were mainly local Mexican-Americans.
Positive: reasonable prices, and great quality vehicles.
Communication was extremely difficult. Company staff was untrained in customer service.
Support: Questions from dealers were met with brusque non-answers. I was actually called a liar by the general manager over prices they had previously quoted.
Inventory: unable to keep up with demand; their most popular products were often unavailable.
Reputation: Most dealers liked the products from the company, but dealing with its disrespectful communication made it not worth the effort.
Solutions that may have kept them in business: Effective management in tune with American customers and the needs of the market.
*** Motorsports Based in Los Angeles California, factories across China.
Company Management: The professional staff consisted mainly of the owning Chinese family, with a couple of Americans who could speak to customers on the phone. Warehouse laborers were Mexican-Americans.
Positive: The quality of products they carried was fair to good. They expressed good intentions, but did not carry them out.
Communication: staff was poorly trained in customer service.
Support: Unable to supply products they imported and sold.
Products as represented: Despite assurances that California approval was eminent, many vehicles never received the necessary approvals so they could be sold in California. The vehicles appeared to be knock-offs of older models.
Inventory: Very small inventory of vehicles, could not keep up with demand. This company was useful for parts only.
Reputation: Dealers that tried to carry their products soon dropped the line due to multiple problems with quality and availability.
Solutions that may have kept them in business: A professional management team backed by an effective sales team. An improved product line that had gone through California EPA and CARB approvals.
***-*** City of Industry California, factories across China.
Company Management: The general manager was a woman from China who was erratic in policy and pricing issues. The office staff was primarily Chinese.
Positive: Not enough to override the significant problems.
Communication: Difficult. Staff not well-trained, unstable policy and pricing.
Support: Non existent.
Products as represented: Quality was poor, vehicles were uninteresting, and few received legal California approvals. American government inspectors actually warned us that if we buy vehicles from this company, we would be closely watched and given surprise inspections often.
Inventory: Unreasonably high prices for poor quality. They could be counted on for only a few parts and helmets.
Reputation: it was quickly recognized as undependable, sending out poor quality products and lacking customer service.
Solutions that may have kept them in business: Better leadership that was in touch with business ethics and service.
*** *** City of Industry California & Georgia, factories across China.
Company Management: The general manager/owner, from China, was seldom present at the American company. The staff was predominantly Chinese.
Positive: Several employees were knowledgeable and tried to be helpful to dealers.
Communication: Staff struggled to provide knowledge, but were given little supervision or adequate information on products.
Support: Seriously lacking.
Inventory: Lack of variety in products in a very small warehouse. I bought parts and small kids ATVs from them, but many parts were often not available. Many of their vehicles were not California approved.
Reputation: Many dealers liked this company, but the lack of products made it impractical to deal with them on a steady basis. Within a few years, the California operation was shut down, condensed, and moved to a Georgia warehouse.
Solutions that may have kept them in business: Again – there was no leadership for this company to assure inventory and general management.
***Moto City of South San Francisco California, factories across China.
Company Management: The manager/owner was originally from Russia. The staff was mostly Russian with perhaps two from China.
Positive: Many supportive employees
Communication: Helpful staff that sincerely tried to answer questions.
Support: The warehouse was not at the same location as their offices, so just picking up an order was difficult. It required a trip to their office for payment, then a separate trip to a different part of town to load the crates of products.
Inventory: Many parts were of inferior quality, and inventory was small.
Reputation: A few bad experiences with quality and inventory sealed their reputation.
Solutions that may have kept them in business: A convenient location under one roof in a lower rent district than San Francisco. A business model that anticipated the market they wanted to reach and serve.
*** Motors Based in Sacramento California, factories located in China.
Company Management: General manager was from China. The management staff was largely Chinese, with a few Americans who were able to speak with buyers.
Positive: OK products.
Communication: Difficult and undependable.
Support: Interest in customer needs was minimal.
Products as represented: The products they carried were of good quality. However, when I called about specific products, I was given their “wholesale” price for dealers. That price, as it turned out, was pennies from the same price advertised to the public, leaving no profit for my company. That system forced dealers to stock, store, market, and deal with customers with no return for their efforts.
Inventory: Their warehouse was small and not well stocked with parts or vehicles.
Reputation: Dealers quickly did the math and saw it was not a source for products. The company ended up being taken to court for federal and state improprieties.
Solutions that may have kept them in business: A business plan that dictated honest practices. Management that understood the importance of adherence to government standards, and hiring quality staff.
****** Based in Ontario California, factories in China.
Company Management: The manager/owner was a man from China who gave the appearance of a wealthy successful business person. Most of the Chinese staff was English speaking.
Positive: Large inventory that could have been an excellent resource for American dealers.
Communication: Impossible. No one knew if parts were in stock, or prices. It was never clear when the Parts Department was actually open for business.
Products as represented: Staff was unable to say if their vehicles had been approved for California or not.
Inventory: The warehouse was impressively large, with a large stock of parts and vehicles. But as I walked through during my first visit it was clear no one was in charge. I went back again hoping to talk with someone who could answer questions and perhaps help me place an order. What I saw in the warehouse were many employees standing around, talking and laughing, and many new vehicles on the floor being cannibalized for parts. There seemed to be no coordination between departments.
Reputation: Parts were priced completely out of line for the quality – often the same as Honda, or more. The owner and vice president were eventually charged with multiple counts of grand theft and money laundering.
Solutions that may have kept them in business: There was an obvious miscalculation on the part of the Chinese directors who placed confidence in the people running their American distributorship.
****** Chino California, factories in China.
Company Management: The owner was Chinese and his general manager was a family member. The management staff was mostly English-speaking Chinese, the parts department and warehouse employed a few Americans.
Positive: They carried some reputable brands with low list prices.
Communication: Customer service, whether on the phone or in person, was abysmal. No one seemed interested in explaining products or assisting. I was actually hung up on many times, and yelled at when I called back. The standard reply at any time was “the parts department is closed at this time.”
Products as represented: A personal experience: I called to place an order for 200cc motorcycles. I was told they were in stock, and California approvals were expected within the week. In good faith I paid for shipment to Sacramento. Two months passed with no approvals, which meant I had valuable floor space taken by vehicles I could not sell. After I made many calls, as last threatening legal action, they finally refunded the coast of vehicles, but only half of the substantial shipping costs.
Reputation: Low prices had lured dealers to the company but it soon became known for very poor quality parts and undependable promises.
Solutions that may have kept them in business: Professional, responsive management and well-trained staff could have kept the company alive and thriving.
***Inc Based in Montclair/Los Angeles California, factories in China.
Company Management: The owner was Chinese, as was the manager and most of the staff:
Positive: Some employees who struggled to be helpful, good inventory, fair prices for their products.
Communication: unreliable, depending on who you were able to speak with.
Inventory: Quality varied from average to low quality products from the Zhejiang China area.
Reputation: Most dealers selling Chinese vehicles did business with them on a limited basis. It was known for inexpensive products. They were not responsive to dealer and retail buyer requests.
Solutions that may have kept them in business: Owner/ manager responsive to customer needs.
In another column to come next let’s look at the successful distributers!