Shopping for products from China offers excellent online and physical retailers opportunities to source quality goods for customers.
China can provide more than fake and cheap clothing. Many trusted factories can produce high-quality products at an affordable rate. There are some red sheep in this industry, though.
China is the world’s largest exporting nation. This is mainly due to the Middle Kingdom’s specialization in various product categories.
China is the world’s largest producer of products and has the most production capacity. The Middle Kingdom has a large pool of skilled labor.
These categories represent China’s strongest:
Accessories & Bags
Lighting & Furniture
2. How to Find Products in China?
Greater Control and Flexibility
2.0 China Sourcing Agent
It’s time for sourcing agency 2.0. For small to medium-sized E-commerce businesses, such as Amazon FBA sellers, Shopify, eBay, Shopify, or Shopify, sourcing agents 2.0 is ideal.
A sourcing agency is either a full-time company specialist or a freelancer that helps foreign businesses import goods in China.
It also provides additional services, such as packaging, customization, and drop shipping.
China Product Sourcing through Sourcing Agents
1. Make Use of a Sourcing Agency In China
These agencies can be called the ones with multiple sourcing agents for themselves. These sourcing firms have several sourcing representatives with their expertise.
They are more reliable in finding products that will benefit your business. Their services are, however, more costly.
2. Make Use of the Service Providers
Many Chinese purchasing agents (or Freelancers) provide sourcing services, and they charge one-time fees.
Everything is transparent, including the supplier name, the process followed, and so forth.
This is an investment you make in your company before starting production.
These China agents used to have a rare status, but they will be more common. Supply can offer this transparent service.
3. Purchase Straight from the Manufacturers
That is what 82% of importers aim to do. They want to manage the process and avoid paying commissions for intermediaries or sourcing agents.
This could be the best choice for you if your organizational capabilities are sufficient to manage suppliers (see below), and you can meet the vendor’s minimum ordered quantity (MOQ).
8 Essential Tips to Follow when Sourcing Products from China
1. Suppliers Should be Checked
It is crucial to conduct thorough due diligence on potential suppliers.
While the information available on the website or other media channels of potential suppliers is helpful, you must verify that it exists and is who it claims to be.
This can be done in many ways. To verify company registration, you can make arrangements to visit the appropriate local government agency.
You will need to determine if the supplier has the necessary production capacity, certificates, and communication and technology skills to meet your requirements in terms of quality, quantity, and delivery times.
It is also essential to verify the supplier’s financial statements. You can request audited statements or statements prepared by a Chinese accounting firm.
This will allow you to assess the supplier’s capital and assets to see potential losses.
2. Be Direct In Your Communication
Remember that Asia is a diverse country, and there are cultural differences when you source in Asia.
Although some larger suppliers might have English-speaking customer care, many of these problems between suppliers and buyers can be traced back to misunderstandings in communication.
“Understanding what was spoken” may not be the same as understanding what it meant.
Although none of these things is intentional, purchasers can protect themselves against costly mistakes or delays by not forgetting this critical point.
All your requirements, from product specs to packaging and type to the content of instruction manuals, must be in writing. Avoid allowing suppliers to make assumptions.
Encourage them to ask questions if they are unclear.
3. Inspections for Quality Control
While a manufacturing agreement is an excellent way to begin your relationship with the seller, regular quality control inspections are necessary to ensure your product meets your specifications.
This avoids costly mistakes later. Research has shown that problems caught later in the production cycle will always cost more than those caught earlier.
These five tips will be a good start for people new to sourcing in China. But global sourcing agencies such as sourcing allies do more research and due diligence than the above.
SOURCING ALLIES is a Chinese company that helps buyers get quotes, evaluate factories, manage the complexities of communicating manufacturing requirements, quality control inspections, and shipping and delivery.
Most importantly, ensure the goods arrive at the destination you desire.
4. Internet Lookup
The internet is the best and most efficient place to search for China suppliers. These sites have thousands of suppliers.
By filtering for entries marked as “gold member,” “verified source,” “onsite provider,” or “accredited seller,” you can speed up your search and narrow down the list of legitimate sources.
B2B sourcing platforms sometimes endorse service provider blacklists or lists of suppliers. Alibaba has a list that bans members.
Some sites also provide unique services that can further protect buyers.
For example, Global Sources has credit-check services and supplier-capability-assessment services to provide suppliers’ critical business information, including company status, production capabilities, and product quality.
You should be aware that “verified suppliers” at these sites do not necessarily mean that the companies have been verified to exist.
5. Sourcing Agent with a Commission
If purchasing directly from a supplier is too tricky and risky, you can get help from a China sourcing specialist based on a commission.
These agents can help identify and verify suppliers and facilitate communications. They charge fees anywhere from 3-10% of the purchase cost.
Sourcing agents may do the bulk of the work, including verifying suppliers. However, you must remain involved in the purchase transactions.
Most commission-based agents for sourcing are not skilled or equipped to manage production and quality controls effectively or to ensure transactions are performed efficiently.
Hidden commissions might exist between sourcing agents and a Chinese manufacturer.
It’s possible to manage your deals by working with a sourcing agent a few times and getting familiar with the process.
6. Locate Trusted Partners
This might be the most challenging task, even more so if Chinese is not fluent. More factory managers and agents are learning English to do business with foreign clients.
The most trusted manufacturers you can source products from in China are not only available through well-known platforms.
China’s trade shows and exhibitions
Collaborate and pay a commission-based or flat fee with a sourcing agent/trading company
To verify suppliers get factory photos and certifications. Also, ask for recommendations from customers.
Make sure to check their business license before doing business with them. This includes contract terms and payment terms.
It also determines the location of legal jurisdiction. If you are visiting the country, visit the factory to see it for yourself.
It is essential to have honest communication so both parties can be satisfied. Be aware that doing business in China might be different from what you’re used to.
For a successful partnership with China, you must build a positive and mutually beneficial relationship with your business partner.
7. Payment and Logistics
There are many types of forwarding from China. The most commonly used are:
(Ex-works) means you will need to arrange transport from the factory’s location to the final destination. This is a process you can control.
Delivery duty paid the seller arranges transportation to the destination, including customs. This option is more complex and has less control.
A freight agent (a middleman who acts between the shippers, the carriers, and the shippers) can assist you.
Air transportation is more efficient and costs more, while sea shipping is faster but less expensive. A third-party logistics provider is a great way to save time and energy.
Customs itself a topic. It covers all aspects of the process, including cost and time.
You might find that your goods get stuck in customs because you don’t know how to label them.
Be sure to declare the destination and import country, type, value, quantity, and cost wholly and correctly.
Of course, you will need to indicate the cost of shipping and insurance. Payments and bank fees are also complicated.
Check with your bank first to see if they can transfer funds to China. Sometimes, manufacturers have subsidiaries in Hong Kong (or Taiwan) that make it easier to share your payment from the US.
As claims tend to be processed quickly, you must do a quality check upon receiving the goods.
8. Ask as Many Inquiries as Possible
Ask as many questions as you can about the company and the products. You can ask for samples or request photos from the company showing the product in action.
Keep the conversation consistent. If they become inconsistent or don’t reply, use your judgment to determine if they’re not suitable suppliers.
Pros and Cons of China Product Sourcing
1. New Product Development
This will lead to frustration as you spend much of your time communicating with others, developing samples, and solving problems. The agent well does these things, and they are much more efficient.
2. Lowering the Risk of Nonpayment
You can be more protected when dealing with a Chinese sourcing agent.
3. Choose the Best Supplier
A Chinese sourcing agent will help you find the best supplier. They can also assist with background checks and factory audits.
4. Simpler, Less Expensive, and Safer
A list will be generated when you use platforms like Alibaba and Made-in-China to find your product suppliers.
It is easy to compare suppliers using ratings, reviews prices, shipping time, and other similar factors if you look at their profiles and offer them in one place
5. Variety in products line
There are many options to handle logistics and payments, depending upon several factors. In section 5, we will discuss the most important details.
Unfortunately, fraudsters and scammers always look for victims in remote areas and other jurisdictions.
Make sure you are cautious and do your homework. If it seems too good for true, it probably is.
6. Minimum Order Quantity Increase
Chinese suppliers seek big profits. They might not be interested if buyers order less than 10 or 100 pieces for high-priced products.
Your budget may not allow for higher minimums. Frequent visits to the factory will help them lower their minimum order quantities threshold.
7. Waiting Times are Excessive
Most Chinese vendors won’t consider manufacturing your product before placing an actual order. Some vendors might ask for a small down payment to cover the material costs.
If you request samples from vendors, expect twice the wait time (first, for example, then for an actual order) unless expedited shipping is available
Vendors may not take online orders as seriously as customers who call to inquire face-to-face. This could mean that they won’t offer any solutions to speed up the waiting time.
8. Lower Productivity
When working with suppliers in Vietnam, India, or other lower-cost nations, sellers’ most significant disadvantage is low productivity.
They are also less skilled and experienced than Chinese workers. Their work schedules are also shorter.
Lower productivity leads to slower production times, potential quality issues, and unexpected delays.
Failing to Sign a Written Contract
Important transactions require a written contract. The written agreement will protect the retailer from supplier lapses during product creation.
It also protects the seller from any additional demands that a retailer may have beyond the terms of the agreement. It is necessary for bulk and wholesale orders.
India, India, and other competing countries promise buyers ease of communication, which China cannot offer.
English is the second language of most Chinese manufacturers. It can lead to miscommunications among Chinese suppliers.
However, mix-ups between Indian suppliers and Chinese sellers are less likely to speak English.
China Suppliers claims that it is China’s “Exclusive, Government Authorized B2B E-Marketplace in China”, but our research has shown that they are owned by China Internet News Center, which is under State Council Information Office.
Despite its cumbersome interface, this website is handy and features many Chinese suppliers. It has a simple URL that is easy to remember!
Global Market has built strong relationships with Chinese suppliers. Global Market promotes GMC certifications (Global Manufacturer Certificate), recognizing genuine manufacturers. These certifications are worth checking out.
LightInTheBox is a New York Stock Exchange (NYSE) listed company founded in 2007. The company offers products in three core categories: apparel, small accessories/gadgets, home & gardens, and clothing.
Make Polo used a website in English and was listed in our top 20; however, the site is now only available in Chinese.
Mistakes to Avoid When Product Sourcing from China
1. Failure to Sign a Written Contract, Resulting In the Absence of a Supplier Audit
Important transactions require a written contract. The written agreement will protect the retailer from supplier lapses during product creation.
It covers the supplier from any additional demands that a retailer may have beyond the terms of the agreement. It is necessary for bulk and wholesale orders.
2. Failure to Create a Solid Sourcing Strategy
It is vital for product sourcing from China to have a solid strategy for sourcing. Because it can be risky to transact business with suppliers and give large amounts of money overseas to partners, you must have a solid sourcing strategy.
It is essential to establish clear goals and requirements in every transaction. A sourcing plan is an outline that helps you identify the best product supplier.
The strategy should be specific about the products and expectations regarding quality control and turnaround time.
3. Not Conducting a Supplier Audit
The bulk of an eCommerce business’ capital goes to product sourcing. An audit should be done on all suppliers that are being vetted.
The best way to determine a manufacturer’s competency is to meet face-to-face in the factory. It allows the retailer to see the entire supplier’s process, from the quality raw materials to the treatment and attitude of employees.
4. Choosing not to Order Product Samples
Relying solely on the supplier’s positive word when placing a bulk order is a poor idea. It is essential to have everything printed, but specifications are insufficient to help the manufacturing staff steer towards a retailer’s vision.
For revisions, you must ask manufacturers to send samples. The manufacturer can also use this opportunity to practice your requirements.
5. Not Being Reasonable In Terms of Price and Minimum Order Quantities
Chinese manufacturers have small margins and require minimum order quantities. They might be open to lowering MOQs if you promise a larger order after your first purchase.
How you communicate your commitment will determine whether or not the supplier fulfills it. Amazon sellers new to the marketplace may have more difficulty negotiating terms and prices because they are still developing.
If your request does not impair their ability, the supplier may be willing to give you a chance by framing your email.
Importing From China and Ecommerce/FBA
Many importers find that their sourcing experience starts with everything going according to plan. This includes a satisfied supplier, passing inspections, and minimal delays.
They believe they are masters of the importing business after a successful order. The truth is, every importer will eventually face problems regardless of whether they are new or experienced.
Different problems can be severe:
Shipping delays (so expected as to be expected).
Communication difficulties resulting in defective products
Last-minute price increases by suppliers
Infringement upon the intellectual property
Quality fade (the quality of production diminishes over time because factories cut corners to increase profits)
The loss of one container can cause you to lose several months’ worth of profits. 50K USD of goods shipped to a country that doesn’t comply with customs and isn’t allowed to go through customs could result in a loss of $50,000. And that’s not counting the cost of shipping and destruction.
It’s crucial to see what you’re doing and plan for potential problems. While the process is becoming simpler with technological advancements, hiring an outsourcing company to handle everything is still accessible and affordable.
At the same time, you focus your efforts on product research, market research, and scaling up your company.
Buying and Improving an Investment Property
It’s easier to purchase a business when there is an established relationship with the supplier and, at minimum, a few repeat orders.
You can quickly get a return on investment by reducing product costs by doing this.
After making the purchase, you can negotiate fees with the supplier or find new suppliers who will source the same product for a lower price. And voila! Instant cost optimization.
At least two clients have used this strategy. They purchase a business and then send us product samples to cut costs by 5% or more.
Sometimes, if the cost savings were substantial enough, they would re-sell the business right away to make a healthy profit.
Alternately, changing the method goods are shipped can bring colossal ROI. Shipping costs can often be optimized.
Ecommerce Sellers’ Challenges
FBA is e-commerce’s biggest challenge. This is because the quantity of the importer tends to be lower, but their customization requirements are more significant.
This is the worst scenario for the factory because they desire large orders with little customization. So, getting suppliers’ support is the most challenging thing.
The second challenge is that you must hold their hand to understand your requirements.
This is especially important for customizing products, such as changing the colors or packaging.
FBA stores need this to be a priority because Amazon has precise packaging requirements. Factories aren’t always good at this, as it requires a certain level of detail orientatio
These two issues are inextricably linked. To better ensure factories attend to your needs, you must ensure your relationship is solid and that factories care about your order.
Quality Control Requirements
When it comes to QC, there shouldn’t be a huge difference. You don’t care if your seller is offline or online; the goal is to sell quality products.
One problem with these importers is their inability to understand their products’ compliance requirements fully.
Larger and more established buyers know what compliance requirements apply because they’ve either been in business long enough to consult with compliance experts or have hired a full-time compliance person.
Small distributors’ compliance requirements and processes can be learned by researching their country, industry, and product requirements.
To ensure that compliance is met, professionals in China can partner with them.
Shipping Your Products
There are three main options to ship freight: air, sea, or courier. Each option offers its own set of advantages and disadvantages.
Air Courier shipping can be a costly option, but it is also the fastest and most straightforward. This is the shipping method that most people are familiar with.
It allows you to send a box to someone overseas via UPS. This is a door-to-door service. You book the shipment, wait, and the shipment will arrive.
The carrier will take care of all the paperwork. They will also invoice you for any customs duty once the goods arrive.
Sea Freight is the standard method of shipping oceans. Your goods are packed into containers, which can be found at all shipping yards.
Then they are sent slowly across the sea. If your volume exceeds 40 feet, an FCL shipment would be sent with a container that is either 20-foot, 40-foot standard, or 40 foot “high cube” container. LCL is best if you have only a few CBMs.
-Freight via Air
Air Freight may be a good option for you if your goods are large and urgently need to be shipped. This is commercial air shipping.
This method is far more expensive than shipping by sea freight. You should note that this service is only airport- to-airport.
They do not handle deliveries. This means you will have separate haulage fees (getting your goods from the airport/warehouse).
Frequently Ask Question About China Sourcing products
1. How do you Get High-Quality Chinese Products?
Our sourcing services are free, and you don’t need to pay anything until you purchase what you love. Our service fee is between 5%-10%.
This includes product procurement, quality inspection, shipping arrangement, and product photographs. Our company is not like other inspection companies that can only send you an inspection report.
You negotiate with suppliers for you and solve quality issues before your products leave China. You won’t feel as secure importing from China through us.
Over the past three years, we’ve helped more than 1,500 Amazon sellers grow their eCommerce websites.
Also, we helped a European business increase their annual imports from 0.5 to four million USD annually. We can only make you successful if we allow you to succeed.
You may be required to pay sourcing fees anywhere from 5% to 10% of the order cost.
2. How Much Does a Sourcing Firm Cost?
However, this percentage will depend on how large your order is and what product you are purchasing. Some sourcing agencies will charge as little as 3% for orders more significant than that.
3. What Is The Best Way to Locate Manufacturing In China?
4. How to Avoid Using an Inexperienced China Sourcing Agent?
China sourcing agents may not be the same. According to our customers, finding one still in business can be challenging since they contacted them.
When deciding which sourcing agent to choose, consider how long they have been around. If they’ve been around for at least ten years, that means they have loyal customers.
How often have they been to China? Are their Chinese boots on the ground?
If so, what city is that? China’s East Coast has the most significant industrial base. You can work with three partner companies in China: the northeast, the east, and the southeast.
Working with a supplier new to you can lead to unexpected problems. It’s impossible not to predict what can go wrong.
This is true whether you source products from China or other countries.
However, you can take steps to protect yourself, your investments, and your customers.
If you can do your due diligence at all stages of the process – from identifying a supplier to setting up expectations and ensuring that your supplier follows through – you will have a much more pleasant experience.