The world is a much smaller place. The internet has changed the way we communicate, the way we market, and the way we buy things. Twenty years ago, if someone had said you could place an order direct with a factory in China and have it delivered to your door, often in less time than a parcel dispatched from Wigan, you would have suggested they were bonkers… but now that is a reality.
Over the past few years, and particularly through social media, Chinese manufacturers have been contacting DJs and trying to sell equipment directly from their factories. This trend has been a big talking point on the trade side of the industry recently and a big cause for concern. At first glance this may seem like greed on the brands’ part, not wanting the added competition, but that actually couldn’t be further from the truth. In reality, the brands are in fear; fear of damage to the reputation of their well-respected Chinese-built products and, more importantly, fear for the safety of DJs and party-goers.
While the products offered by these Chinese companies may look the same as those on offer by established Western brands, the reality can be quite different. Respected brands invest heavily into research and development (R&D) and ensure their Chinese factories use good quality parts that are thoroughly tested. When you buy direct, you’ve no idea what could be ‘under the hood’. If you’re lucky it may be similar, if you’re unlucky it may be noticeably inferior, and if you’re really unlucky it might be downright dangerous! What may seem a cheap initial purchase could prove costly down the line and, if someone gets hurt, ‘costly’ could mean prison!
It may seem like this is an anti-China rant on behalf of the industry and, in part, I suppose it is. Any brand actually welcomes fair competition, in fact many of them thrive on the day to day, tit for tat banter between ‘rivals’. If you are going to import similar products and jump through the legal hoops that they do, then it’s fair game. However, direct importers are often breaking the law – in many cases without even knowing it! So, to create this article, I spoke with several manufacturers and retailers to get their view point on the ‘Ali Baba Boom’ and to get the facts on the legality of direct importing.
My journey started with chatting to Andrew Jeffrey and Chris Beesley from Prolight Concepts. I asked them, “from your experience, how easy is it to find a factory you can trust in China to deliver reliable product first time round?” Chris was first to respond. He explained how there are many ‘factories’ in China that simply assemble products and do not carry out any R&D themselves. This means that they ‘clone’ other products from the market but, as they don’t understand the original design process, they regularly introduce faults. Aside from this, the products often feature recycled components and are sometimes assembled in a manner that takes little regard for even basic safety, such as the inclusion of a protective earth. “I have visited ‘factories’,” Chris told me, “that are smaller than the average lounge in a semi-detached house! I once visited a cable factory in the Zhejiang region that was literally a cable spinning machine sheltered by a tarpaulin strung between four trees!”
Andrew then went on to add, “even now, with the companies we have worked with for a long time, we encounter stupid problems. For example, when a factory takes on a new engineer there is often no process to ensure that they know all the regulations for all the countries they export to. It’s often like starting again!” He also pointed out that a lot of the companies who trade on the web don’t even make the fixtures themselves; they could be just a simple trading company adding a mark-up. There is even a ‘disco parts market’ in China where anybody can go and buy all the parts to make, for example, a moving head and put it together at home before shipping it off to some unsuspecting DJ in the UK!
“Don’t even get me started on simple things like instruction manuals,” Andrew continued. “There has not been one single manual for a product that we’ve not had to re-do. Don’t get me wrong, I love buying from China. But, even now after 20 years of importing, every day I am still dealing with stupid things at Chinese factories.”
Putting aside the quality and provenance of the products, the legality of buying from China is often unknown by individuals whose decide to import direct. It is simple to find out about the easy part – things like VAT and Duty (import taxes) – but the important part is making sure the product is safe. As the importer, YOU (not the manufacturer) are solely responsible for ensuring the product is fit for the road.
One of Chris’s roles at Prolight is to make sure every product complies with the law. “CE (which now includes RoHS and Reach) is by far the biggest hurdle for any trading entity importing products from outside the EU”, he explained. “CE is a banner under which there are thousands of detailed specifications applicable to different product types, these include how the product is designed, manufactured, tested, and imported. Once the importer is happy they have satisfied all the relevant points under CE they must then issue a Declaration of Conformity. Failure to comply with CE may be enforced, in the worst case, via hefty fines and even imprisonment!”
Sam Bowden, Product Specialist from CHAUVET Lighting, added, “We are all now working towards the new CE tests too – CE is constantly changing and CE is also expensive. As an importer you can’t just look to see if a product has a CE sticker. It is your job to make sure it is legitimate and it has the certificate to go with it. Without the certificate the CE badge on a product is worthless. It costs money each time you put a product through CE – a lot of money! Of course factories try and escape this all the time. But if you don’t have it, you are liable for the product and culpable for anything that may happen. And let’s remember, we’re playing with light and electricity here… it’s only a small step from there to fire!”
There was no shortage of manufacturers who wanted to take part in this collaborative article. I asked Kris Dawber, from ADJ, this question: “It is often the more expensive products, like feature-rich moving heads and video wall, where China’s direct pricing can look the most appealing. What would you say to anyone who is currently sat on the fence eyeing up an Ali Baba bargain?”
“Don’t do it! It is so complex and ultimately all responsibility is held with the importer. This means that if it’s an individual and there was a fire or injury that person would be personally liable. Service and back up is essential too, especially for higher value items. The more technically advanced the fixture, the more likely it will need servicing. Are replacement parts available? And don’t even get me started on video wall – the complex technical knowledge for use of LED screens is heavy. Buying cheap usually means buying twice!”
To get a full picture I also wanted to chat to some retailers to see what, if any, experience they have had with direct importing themselves. My first stop was to scour the DJKIT.com website, but I couldn’t find any products they import directly. I asked one of the owners, James Craik, why that is? “We have done it before, and have had our fingers burnt!” he told me. “Not only is it a legal nightmare, but it’s almost impossible to know what will actually be inside each box! Our suppliers offer prices that are too similar to bother with direct imports and when we buy from a UK company they will cover the warranty. For us, there is no point tying up our cash flow in a container-load of direct imports just to make an extra couple of quid on each product. What’s more, in this digital age, the consumer knows most brands by a name and usually searches for particular product names. It’s a no-brainer - we go with the tried and tested.”
I asked David Reed from RSDmusic the same question – has he ever tried to import anything under the RSD badge? It was a very clear NO, and for a very good reason, Product Liability. “What most people don’t realise is that the buck stops with the importer, meaning you are responsible for that product. While many who import small batches may have Public Liability, they should also have Product Liability in place. The big brands spend thousands, often tens of thousands, of pounds insuring their products in case there is ever an issue. It is this insurance that is so important. If a product were to ever be the cause of burning down a venue, or electrocuting a guest, the company has this insurance in place. It’s like public liability insurance, but for a product, and it is costly. It is the one area that so many people importing directly overlook, and that terrifies me! Also, it’s worth pointing out that a DJ who imports direct may also find their Public Liability invalidated should there be a problem. In the same way your motor insurance is invalidated if you have bald tyres, your PLI is invalidated if you use products without the correct import documentation and Product Liability Insurance. It would be hard to stand in court fighting your corner having burnt a £1.5 million mansion to the ground with the eBay lights which saved you £200 over buying via the correct channels. Anyone for prison?”
So far it is only lighting brands who have chipped in, so I thought who better to ask from an audio point of view than Mark Parkhouse from FBT. Mark was very clear with his answer: “You see lights, but you hear audio! No-one is going to be too offended by a slightly dim light, or one with a faulty stepper motor, but terrible sound is for all to hear. I am not saying that I never hear of direct imports of speakers and amps, but it is less of an issue for audio. Sound is such a personal thing and I don’t think the saving is worth the risk. Come on – would you buy a sound system without hearing it, or at least knowing its standard, first?”
This article could be 10 pages long - it has taken me ages to get it so concise! – but there was one other area that EVERY person I spoke to mentioned, and often more than once… PARTS. The big brands have millions of pounds’ worth of spare parts sat on shelves in their warehouses to support what they sell and all see this as a major issue if you are going to buy direct. Sam from CHAUVET sums this up well, “Back up, support and QC – buying from a good manufacturer means they have put time into developing a product to high standards. This means they check for things like consistency of build, consistency of output, colour matching, and quality of parts. Buying from China direct you risk receiving something that has been built without these checks in place and, if you experience failures, you will receive very little backup or support and will really struggle to get hold of replacement parts.”
Kris at ADJ reiterates, “It is the backup from a brand that gives us the clear advantage over direct importing. It is why we have invested so much in to our parts stock and QC procedures. It is essential that we continue to do it too, to maintain the value we offer.”
My final question was to all who had taken part in this article, “taking in to account VAT, duty, service, and re-sale value, what percentage saving do you think is actually achieved long-term by purchasing direct from China? All answered practically the same – ZERO, and you can see why. Importing directly from China is a costly business and – unless you are prepared to go all in and setup a full import business – personally I think the risks out-weigh the benefits.
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The full review can be found in Pro Mobile Issue 82, Pages 56-60.