china product sourcing

Welcome to the ultimate guide on China Sourcing Products where we explore the exciting and complex world of importing goods from China. Did you know that China is the world’s largest exporter of goods? According to the World Trade Organization, in 2020, China’s exports amounted to a whooping $2.6 trillion, making up over 13% of the world’s total exports.

With such a massive export industry, it’s no surprise that businesses around the world turn to China for their sourcing needs. In fact, a report by McKinsey & Company found that 60% of global sourcing executives say they plan to increase their sourcing from China over the next five years.

But why China? The answer lies in the country’s manufacturing prowess and competitive pricing. China has a vast network of factories and suppliers, able to produce everything from electronics to clothing to household goods. Plus, due to lower labor costs and government incentives, Chinese manufacturers can often offer lower prices than their competitors.

However, you may face several challenges while importing products from China. Navigating language barriers, cultural differences and complex trade regulations can be a hurdle, especially for first-time importers. That’s where this ultimate guide comes in – we’ll help you navigate the ins and outs of China sourcing products, from finding the right suppliers to ensuring quality control.

So whether you’re a seasoned importer or just starting out, get ready to explore the exciting world of China sourcing products. With our help, you’ll be able to tap into one of the world’s largest economies and access a wide range of high-quality goods at competitive prices.

Let’s get started!

Table of Contents

Chapter 1: 7 Reasons to Source Products from China

1) You Can Find High-Quality Products

Factory workers working in a factory    

China’s manufactures observe strict quality control standards to produce high-quality products that meet international standards. In fact, many multinational companies source their products from China due to the quality and affordability. For instance, 90% of the world’s laptops and smartphones are manufactured in China.

The country has invested heavily in technology and infrastructure to ensure that its products meet international quality standards. Here are some of the ways China produces high-quality products:

  • Advanced Technology: China has invested heavily in advanced manufacturing technologies like automation, robotics, and AI, which enable businesses to produce high-quality products consistently.
  • Skilled Labor: The country has a large pool of skilled labor. Many Chinese universities offer engineering and technical courses that provide a stream of highly skilled workers to the manufacturing industry. As of 2021, China had over 26 million graduates in science and engineering.
  • Quality Control Systems: Chinese manufacturers have implemented quality control systems to ensure that products meet customer requirements and fulfil their expectations. These systems ensure that products are manufactured to a high standard consistently. Many manufacturers have also obtained international quality certifications such as ISO 9001, which shows that they are committed to quality.
  • Best Raw Material Selection: Chinese manufacturers select high-quality raw materials to produce products that meet international quality standards. This ensures that the products are durable and meet customer expectations. Many manufacturers also have their own quality control teams that inspect the raw materials before production.
  • Government Regulations for Quality Control: The Chinese government has implemented strict regulations to ensure that products produced in the country meet international quality standards. The State Administration for Market Regulation (SAMR) is responsible for monitoring and enforcing product quality standards. This ensures that manufacturers produce products that meet safety and quality standards so that China product sourcing can be popular all over the world.

2) There is a Greater Supplier Base to Choose from

One of the world’s largest manufacturing hub is China. This results is a diverse supplier base ranging from large scale manufacturers to small and medium-sized enterprises. There are over 1.3 million industrial enterprises in the country. This means that businesses from across the world have access to a broad range of suppliers who in turn offer a wide range of products.

In addition, Chinese manufacturers specialize in different product categories. These range from textiles, electronics, automotive, and consumer goods and many more. This specialization has also led to the growth of several industries in China. As a result, there are thousands of suppliers in the country.

With so many suppliers to choose from, businesses can find the right seller who meets their specific needs and requirements.

3) Low Labor Costs compared to other western countries

China Sourcing Map

Labor costs are relatively low in China compared to other countries for a variety of reasons. Firstly, China has a large population of around 1.4 billion people which results in a large workforce. Therefore, there is a huge labor supply. This abundance of labor supply has resulted in a lower cost as businesses can hire workers at lower wages due to the competition.

Another reason why labor costs are low in China is that the country has a comparatively lower standard of living than developed countries. As a result, wages in China are lower. The minimum wage in China varies depending on the region, but it is still lower than in developed countries like the United States, Canada, and Europe.

Furthermore, the Chinese government has created policies to support its manufacturing and export industries, which have led to a lower cost of production. For instance, the government offers tax incentives to businesses that export their products, and they have built special economic zones that offer low-cost labor and streamlined logistics. This means that businesses operating in China can access lower-cost inputs, including labor, which results in a lower cost of production.

In addition, China’s education system places an emphasis on technical and vocational training, which has resulted in a skilled labor force that is relatively inexpensive to hire. This means that businesses can benefit from a skilled workforce without having to pay high wages.

All of these factors turn in favor of people looking for China product sourcing from other regions of the world.

Fact:Tthe average manufacturing labor cost in China is just $2.50 per hour.

4) Low Cost of Products

Due to the low labor costs and efficient production processes, China offers products at a lower cost than many other countries. From electronics to textiles, China’s low cost of production makes it an ideal location for businesses looking to reduce their costs and increase their profit margins.

5) You will Have Greater Scaling Opportunities

A population of 1.4 billion means a vast market for businesses. Furthermore, China’s government has policies that support business growth. For example, the government has launched initiatives such as the “Made in China 2025” plan, which aims to upgrade China’s manufacturing sector to compete with developed countries. This plan provides funding and support to businesses that are engaged in advanced manufacturing and technology.

Another factor that contributes to the scaling opportunities in China is the country’s well-developed infrastructure. China has made significant investments in infrastructure development, including highways, railways, and ports, making it easier for businesses to transport goods and services across the country.

Moreover, the country’s digital infrastructure is also highly developed, with over 989 million internet users and 1.6 billion mobile phone users as of 2021. This provides businesses with opportunities to reach a large audience and scale up their operations through digital channels.

Finally, China’s unique business culture, which emphasizes long-term relationships and building trust, provides a conducive environment for businesses to build lasting partnerships and scale up their operations.

6) Chinese Suppliers focus on Sustainability

china product sourcing sustainability

Sustainability in manufacturing processes involves minimizing negative environmental impact, observing social responsibility, and ensuring economic viability.

In recent years, there has been an increasing focus on sustainability in the business world, and China’s manufacturers are no exception. Chinese manufacturers have been taking steps to become more sustainable by implementing eco-friendly practices and technologies in their production processes.

One area where Chinese manufacturers have made significant progress is in renewable energy. China is the world’s largest producer of solar panels, wind turbines, and hydroelectric power, and is investing heavily in renewable energy. In 2020, China accounted for 40% of global renewable energy investment, with over $83 billion invested in clean energy projects.

Furthermore, China’s manufacturers have been adopting sustainable production methods, such as using recycled materials, reducing waste and emissions, and implementing energy-efficient technologies. For example, China’s steel industry has reduced its energy consumption per ton of steel by 23% since 2005, and its carbon emissions per ton of steel have decreased by 60%.

In addition to environmental sustainability, Chinese manufacturers are also focused on social responsibility. They are taking steps to ensure fair labor practices, safe working conditions, and ethical sourcing of raw materials. For example, some Chinese manufacturers have implemented programs to improve working conditions and reduce the use of child labor in their supply chains.

The Chinese government has also been promoting sustainability through policy initiatives. In 2020, the Chinese government announced a goal to achieve carbon neutrality by 2060, which will require a significant shift towards renewable energy and sustainable production methods.

7) Option of Directly Sourcing Products

China offers businesses the option of directly sourcing products from sellers in order to reduce costs and improve efficiency. At the same time, with the help of online marketplaces, businesses can directly communicate with suppliers and purchase products at wholesale prices. This eliminates the need for intermediaries and reduces the cost of sourcing products. Moreover, businesses can negotiate prices and terms directly with suppliers, providing greater control over the sourcing process.

Chapter 2: 10 Steps to Ensure Proper Product Sourcing from China

China Sourcing Map

1) Do Proper Marketing Research – Know Your Product

Before importing a product from China, it is important to know about the product’s customer demand, quality, and market competition. Considering these factors is called market research. It helps you understand your product’s target audience so that you can have better sales.

2) Search for Multiple Suppliers

It is good to search for multiple sellers before you select one of them for your purchases. In that way, you will be able to assess the customer service and reliability. At the same time, you will also be able to compare prices and get the best deal. Here is how you can search for multiple sellers”

  • Search online on different social media platforms
  • Attend Trade shows and exhibitions held in China
  • Check on different E-commerce marketplaces, such as Ali Express and Made in China
  • Ask for recommendations or referrals from people who are in the relevant business
  • Attend webinars
  • Hire a sourcing agent like Ejet to conduct the seller search on your behalf

3) Request Product Samples from Multiple Suppliers

This step helps you assess the quality standards of various products. This is sample testing which helps you evaluate important factors about a seller, such as product quality, packaging, and labeling.

For more information about product sampling procedure, you can speak to our sourcing representative. She can guide you with all aspects of China sourcing products. 

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4) Do Proper Quality Checks of Different Product Samples

This step comes after receiving product samples. By conducting quality checks, you find out possible defects or quality flows in products. In today’s globalized world, China is a major player in the manufacturing industry and is a top sourcing destination for wholesale products. However, while it may be tempting to simply source products from China due to lower costs and wider product options, it is important to take quality control seriously and thoroughly check the quality of products before sourcing wholesale products from China.

Firstly, checking the quality of products can help ensure that the products meet the required standards and regulations of the destination country. Importing low-quality or non-compliant products can result in significant fines, legal liabilities, and damage to brand reputation. It is therefore essential to perform due diligence and ensure that the products meet the required safety and quality standards.

Secondly, quality control can also help to prevent any unexpected issues with the products, such as product defects, poor performance, or faulty components. By inspecting the products before shipment, you can identify and resolve any issues before they become bigger problems. This can save you significant time, money, and resources in the long run.

Lastly, quality control can help you to build a strong and reliable relationship with your supplier. By conducting regular quality inspections, you can demonstrate your commitment to quality and build trust with your supplier. This can result in better communication, improved product quality, and more favorable terms.

5) Know about the Minimum Order Quantity of Suppliers

MOQ Meaning

Minimum Quantity order – or MOQ – is different for different sellers. Find out this quantity before placing your order. This helps you determine your own order size and assess its feasibility.

We have written many blogs based on MOQ. You can learn about them from these links below:

Why is MOQ Important when Importing from China? (Updated-2022)

What Does MOQ Means? Negotiate and Get Lower MOQ While Importing

6) Shortlist One Supplier out of the Pool of Multiple Suppliers

After conducting a thorough research through the above mentioned steps, it is time to shortlist your seller. You may buy from more than one sellers. Your selection will be according to who supplies the best quality, most affordable rates, timely delivery and good after sales services.

7) Negotiate the Price

Always negotiate the overall price of your order according to your budget. You may discuss your order quantity, packaging, and delivery terms and get the best deal.

It is important to do your research and have a clear understanding of the market price and your budget. When negotiating, be respectful, build a good relationship, and be prepared to walk away if the price is not right. Also, consider other factors such as quality, lead time, and payment terms. By negotiating effectively, you can achieve a fair price, strengthen your relationship with the supplier, and ultimately increase your profitability.

8) Agree on the Shipment Process

The shipment process includes packaging, delivery and the shipment method. Make sure you discuss these factors before placing your order in order to avoid any hassle or issue later on.

9) Prepare a Legal Contract

Seal the deal through a legal contract with the supplier. This contract should cover terms and conditions of the purchase. Don’t forget to include product specifications, quality requirements, delivery terms, payment terms, and any other important details. Getting all of this on paper makes it official. Moreover, it is then binding on the seller to fulfill the agreed requirements and conditions.

10) Make a Payment

After finalizing the deal, it is time for you to pay the seller. Don’t delay the payment as it is an unethical business practice and loses the trust of local sellers. Use a secure payment method to clear the dues and ensure that the supplier has received the payment before shipping the products.

Chapter 3: 4 Steps to Avoid while Conducting Product Sourcing from China

1) Not Asking for Product Samples

This can be a costly mistake as you might end up with poor quality items. Other issues might include poor packaging and labelling along with delayed delivery. There is a possibility of all of these issues unless you request for samples before placing a larger order.

2) Focusing Only on the Price of the Product and Nothing Else

An item may be available for $100 while another seller might offer it at a much cheaper cost. Don’t rush to buy the cheaper version as it will be costly in the long run. Cheaper items are often poor quality or counterfeit products. You need to focus on the product’s quality, packaging and labelling instead of just considering the price.

3) Not Having a Proper Sourcing Strategy

The lack of a sourcing strategy can result in poor decision-making. It is important to have a clear plan that considers the following factors:

  • product requirements
  • supplier evaluation criteria
  • quality control measures
  • shipping procedures.

A well-planned strategy can help you save time, money, and resources.

4) Not Hiring a Reliable Sourcing Agent

A sourcing agent provides a great deal of help with seller selection, price negotiations, quality control and reliable shipment procedures. Without a sourcing agent, you may end up with poor quality products, expensive prices and untimely deliveries. You may also not be able to avoid seller scams if you select the suppliers without an import agent’s help.

Read our blog article for more sourcing tips.

Chapter 4:  4 Tips to Follow When Carrying Out China Product Sourcing

1) Pick the Right Supplier for Yourself

Choosing the right supplier is important for successful China product sourcing. Consider the following factors while assessing multiple suppliers:

  • the supplier’s market reputation by checking buyer reviews or seller portfolio
  • seller’s experience
  • production capacity
  • pricing

The supplier you choose can determine the quality of your products and the success of your business. It is, therefore, important to do your research and find the best supplier for your product needs.

For more help, use online platforms like Ali Express to search for suppliers. Additionally, you may also attend trade shows and exhibitions to meet suppliers in person. Take your time to evaluate multiple suppliers, and shortlist the one that best suits your business requirements.

2) Properly Verify the Supplier

Verifying the reliability of your supplier is extremely important to avoid scams and fraud. There have been cases where businesses have fallen victim to fraudulent suppliers and lost money in the process. However, conducting proper verification can help prevent the risk of such scams.

Take the following steps in order to properly verify a supplier.

3) Check the Seller’s Business Registration.

First, check the supplier’s business registration to ensure their reliability. According to a report by the China Council for the Promotion of International Trade, there were over 30 million registered businesses in China before the Corona Pandemic, making it vital to confirm a supplier’s registration status. You may visit China’s Administration for Industry and Commerce (AIC) website, where you can check any registered company’s registration number, business scope, and other important details. If you can’t find these details for a particular seller, he or she loses credibility as you cannot find it to be reliable and trustworthy.

4) Check the Suppliers Manufacturing capability

In 2019, China produced over 28% of the world’s manufacturing output, making it a top choice for businesses people who wish to import from China. However, you need to check the manufacturing capacity of individual suppliers. This is important to ensure that the supplier can meet your quality standards and requirements.

5) Have a Look at the Suppliers Certifications

Many suppliers in China have certifications for product quality, safety, and environmental compliance. Sellers with these certifications have an edge over the ones who don’t. You should always pick a certified supplier.

Interesting Fact: In 2018, China ranked second globally for the number of ISO 9001 certified companies

6) Conduct Background Checks on the Supplier

Ensure your supplier has no history of fraud or unethical business practices. You may look for buyer reviews and company ratings for this purpose.

7) Always Ask for Samples

Requesting for samples helps you evaluate the quality and suitability of the product you are going to purchase. It also serves as an opportunity to check the supplier’s professionalism, responsiveness, and communication skills. You should request samples from multiple suppliers in order to carry out a comparison and choose the best option.

When requesting samples, you should provide clear instructions about your expectations as well as specific requirements. This will help the supplier understand your requirements and create the right sample.

Review the sample carefully and perform quality checks. Don’t forget to provide your feedback to the supplier to ensure they meet your expectations in future.

8) Communicate Effectively with the Supplier

Effective communication with your supplier is key to ensure the success of your China Product Sourcing. Clear communication helps the other party to understand your expectations, resolve any misunderstandings, and ensure timely delivery of products.

This communication should be frequent in order to avoid communication gaps. An import agent will be immensely helpful here. Being a local individual, the agent will help you overcome language barriers and negotiate effectively with China’s parties.

Contact our sourcing representative for more tips about China Sourcing Products. Consultation sessions are free. Avail this opportunity to ask any questions you have on this subject. 

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Chapter 5: 4 Business Models you can Use for China Sourcing

China has long been the go-to destination for businesses worldwide that are looking for product sourcing solutions from China. The country offers a large range of products at competitive prices. With over 1.4 billion consumers, China also offers enormous market potential for businesses. However, the process of product sourcing in China can be overwhelming, especially for businesses that are just starting. Using four successful business models can be helpful for every business person who wishes to import from China.

In this section, we will explore four business models that can be used for China product sourcing.

1) Dropshipping

dropshipping china product sourcing

Dropshipping is a popular business model for entrepreneurs looking to start an online business with low startup costs. The business model involves partnering with a supplier who will handle the inventory and shipment of products directly to customers. The entrepreneur only needs to market the products, receive orders, and forward them to the supplier for shipment.

Dropshipping can be an excellent option for businesses looking to test new products in the market without committing to a large inventory.

Interesting Fact: The global dropshipping market is expected to grow to 557.9 billion U.S. dollars by 2025 according to research carried out by Statista. 

2) Reselling

Reselling involves purchasing products from a manufacturer or supplier and selling them to customers for a profit. Unlike Dropshipping, resellers hold the inventory and manage the shipment of products to customers. This is the most popular business model that business people from all over the world adopt. These are the people or companies who mostly look for China product sourcing.

Reselling can be an excellent option for businesses that want to have more control over the quality of products and the shipping process. It also allows businesses to negotiate better prices with suppliers when purchasing in bulk. According to Grand View Research, the global reselling market size is expected to grow at a compound annual growth rate (CAGR) of 7.9% from 2021 to 2028.

3) White Label

White label products

White label products are generic products manufactured by a company. Other businesses buy these products in bulk and can rebrand and sell as their own. In other words, the product’s branding and packaging can be customized to the reseller’s specifications.

White labeling can be an excellent option for businesses that want to offer a unique product to their customers without investing in product development and manufacturing. According to MarketsandMarkets, the global white label market size is expected to grow at a CAGR of 10.3% from 2021 to 2028.

4) Customizing your Products

Creating a customized product involves working with a manufacturer to create a product tailored to the business’s specifications. The business has control over every aspect of the product, from the design to the packaging.

Creating a customized product can be an excellent option for businesses that want to offer a unique product that sets them apart from their competitors. Customization also involves simply putting a company’s brand logo and name on the products. Many manufacturers in China offer these services. Businesses from around the world can avail these customization options in order to purchase personalized items for reselling. This is a common practice for China product sourcing.

Chapter 6: FAQs about China Product Sourcing

1) Why is China Product Sourcing so Cheap?

Buying products from China is cheaper than sourcing from any other part of the world. This is mainly because of the low manufacturing costs and cheap labor in the country. Moreover, the raw materials for manufacturing are also available at low prices. All of these factors lead to low manufacturing costs which in turn put an affordable price tag on manufactured goods.

2) How Can You Ensure Product Quality While Sourcing from China?

  • Here are the steps you can take in order to ensure the product quality for China product sourcing.
  • Research and partner with reputable manufacturers that have a proven track record of producing high-quality products.
  • Conduct a factory audit to assess the manufacturer’s production processes, quality control procedures, and working conditions.
  • Request product samples before placing a large order to evaluate the product’s quality and ensure it meets the required standards.
  • Hire a third-party quality control inspector to conduct product inspections at the factory before shipment to ensure that the products meet the required quality standards.

Provide the manufacturer with a detailed product specification sheet that outlines the product’s technical specifications, material requirements, and packaging requirements.

3) Why do people Source from China?

People from all over the world import products from China due to multiple reasons:

  • Low production costs due to lower labor costs and government incentives.
  • Wide range of products available due to China’s vast manufacturing capacity and diverse supply chains.
  • Quick turnaround time for production and shipping due to efficient logistics infrastructure.
  • Access to advanced technology and equipment for manufacturing.
  • Flexibility in order quantities, with manufacturers able to produce both small and large orders.
  • Access to raw materials at competitive prices due to China’s rich natural resources and global trade relationships.
  • Ability to customize products to meet specific business needs.
  • Availability of experienced and skilled workers in various industries.
  • Growing global demand for products manufactured in China.

4) What Role can a Sourcing Agent play in China Product Sourcing?

A sourcing agent can provide the following services to help you with the process of importing from China.

  • Selecting the right seller
  • Communicating your requirements and terms
  • Making pricing negotiations on your behalf
  • Handling shipment and delivery
  • Carrying out quality control inspections

Conclusion 

That’s where our ultimate guide on China Sourcing Products comes to an end! We hope you’ve learned valuable insights and tips to help you navigate the exciting and complex world of importing goods from China.

As we’ve seen, China Sourcing Products offers businesses a tremendous opportunity to access a vast range of high-quality goods at competitive prices. However, the process of sourcing products from China can be challenging, especially for those who are new to the game. That’s why we created this ultimate guide to provide you with a comprehensive understanding of the ins and outs of China product sourcing.

We’ve covered everything from finding the right suppliers and negotiating prices to managing logistics and quality control. We’ve also highlighted the benefits and challenges of sourcing products from China and provided you with strategies to mitigate risks and maximize success.

At the heart of it all, successful China sourcing products require building strong relationships with reliable suppliers, and that’s where a sourcing agent can play a crucial role. Sourcing agents bring local knowledge, language skills, and cultural understanding to the table, helping businesses to overcome the complexities of the China sourcing landscape.

But it’s not all work and no play when it comes to China sourcing products. Importing goods from China can also be an exciting adventure, offering businesses the opportunity to explore new markets, connect with new suppliers, and expand their product offerings. So, if you’re up for the challenge, we encourage you to dive in and explore the exciting world of China product sourcing!

In conclusion, we hope that this ultimate guide has provided you with the knowledge and confidence to pursue your China sourcing products dreams successfully. Remember, with the right tools, strategies, and mindset, you can unlock the potential of one of the world’s largest economies and access a world of possibilities. Good luck and happy sourcing!