Sourcing from China can be the best decision for your business life.
China has made its mark in the trading world by being one of the biggest exporters in the world.
In this chapter, we will introduce you to the basic knowledge about sourcing goods from China so that you can feel at ease while importing goods from China.
You must be wondering that among all the countries of the world, why you should source goods from China.
Well, China is one of the largest exporters in the world that is famous for the trade of manufactured goods.
In the year 2019, the trade surplus of China stood at almost $422 billion.
So, the export of goods makes a considerable part of the Chinese economy.
The main reason for sourcing goods from China is that China is the global hub of goods export.
You can find manufacturers of anything and everything in China, and the Chinese manufacturers can provide you with customization options as well.
So, by making a simple request to the manufacturer, you can quickly get your brand name added to the products.
1. Significance of trade with China
China is a very significant exporter as it is often referred to as the manufacturing powerhouse.
A total of 26% of global manufacturing in 2018-19 occurred in China and exported goods worth about 2.5 trillion US dollars.
The following points support the significance of trade with China.
Sourcing goods from China is cost-effective. China has a low-cost pool of labor, so one can quickly get goods within his budget.
When it comes to smartphones, computers, technology-related gadgets, clothing, and furniture, you can find China to be the most competitive manufacturer and exporter.
There are a lot of Chinese factories that produce the same goods in different styles, so you find variety among the goods as well.
The well-developed supply chain of China has a massive contribution to making it the most potent exporter.
The heavy investments of the Chinese government in skill development, technology and infrastructure have made it stand out from other countries and improved the economy.
2. Chinese manufacturers
You can find all types of manufacturers in China; the wholesalers, the trade companies, and the manufacturers themselves.
You can easily search them on the internet, connect with them and visit them personally to make your deals.
A reliable Chinese manufacturer can provide you with a variety of goods at relatively lower costs.
You will need a good business strategy to find the best manufacturer for your order and negotiate with him according to your budget.
3. Ways of finding a reliable supplier from China
You can find a reliable supplier from China through thorough research. Buyers’ reviews can evaluate the previous performance of a supplier.
If you have the option to visit the supplier personally, then you should definitely consider it.
Finding a sourcing agent is a perfect option for staying away from scams.
Due to previous dealings, the sourcing agents are better aware of the reliability of suppliers.
You should seal the deal only after making sure that the supplier is reliable.
4. Finding the best sourcing agent from China
There is always a risk of getting scammed, so you should always make calculated decisions and be vigilant.
Sourcing goods from China is no exception to this unpleasant counter.
Finding the best sourcing agent in China takes a little effort and saves you from a lot of trouble that may follow a wrong decision otherwise.
It would be best to have a sourcing agent because the Chinese culture is very alien to the other people.
To get into an effective supply chain and find the best goods, you must fully know China and its customs. Here the sourcing agent comes to bridge the gap.
Chapter 2: Tips to source the best goods from China
Your business is dependent upon the quality of goods you sell.
Getting the best interests should be your first concern when starting with business.
You should take into account the following tips when you source goods from China.
1. Analysis of suppliers
The best suppliers can win you more clients and capital in turn. So, the first thing that should be considered is finding the best suppliers.
China is the giant manufacturer that can provide you with quality goods according to your expectations.
The search engines can help you find dozens of suppliers, and you can shortlist the ones matching your criterion.
You can also take help from an online platform like Alibaba to find the best match.
The pro point of using such media is that they provide a rating with the supplier’s info.
You can easily compare different suppliers and find the most suitable match.
2. Verification of suppliers
You can analyze the technical expertise and the production capability of a supplier by verifying their credentials.
Most of the suppliers often post the formal documents on the internet so that the buyer can evaluate their performance and credentials.
The verification of suppliers is a very crucial tip that most people skip due to their laziness.
Most buyers want to deal directly with the supplier, so this verification also helps you to differentiate between the actual supplier and the middlemen.
You can consider the following points while verifying the data of the supplier.
Verify the name and location of the company and the manufacturing factory.
Ask for an audit report of the accounts of the factory.
Request samples of products of interest.
Check the tax invoice.
Verify the registration record of the factory.
The verification of a supplier can be done in person or through the sourcing agent also.
3. Communicate your demands
Asia is a region of vast cultural diversity that shows in the language, tradition and way of living of the people.
China is no exception to this rule. The communication gap is one of the biggest hurdles in practical dealings between the buyer and the seller.
To be able to receive the correct goods, you should convey the demands rightly, and lack of communication can affect the deal badly.
If we trace back the unsuccessful deals, we will find inappropriate communication and misunderstanding.
Communication is the key, and it covers all aspects from negotiation, product description, packaging specifications, customization demands, shipping, and final delivery of goods.
One most helpful tip to bridge the communication gap is using a writing medium to convey your demands.
Elaborate on every aspect of the order and do not leave anything uncovered. Appreciate questions from the supplier so that there is no possibility of assumption on the supplier’s end.
4. Cost comparison
It should be kept in mind that the higher quality goods are more expensive than the average quality goods.
If someone promises you to provide high-quality premium goods at cheap rates, it is probably a fraud.
It would be best if you always looked for various suppliers’ pricing ranges to get a better idea of the actual cost of a product and then eliminate the fishy low-cost deals.
Cost comparison can save you from getting overcharged as well. It would be best if you always stayed in balance with the average cost range to be on the safe side.
5. Quality analysis
Quality inspection of goods is as necessary as any other step in dealing with the manufacturer, and you cannot skip this critical step in courtesy.
The assessment of quality can give you timely information about any default being done so that you can make up for it before time. It is not a one-time thing; you should regularly check the quality of goods to ensure that they meet the standards or not.
The earlier you detect the problem, the more time you get to fix it and reduce damage.
You should always opt for the options that can check the goods earlier than they reach you.
For this purpose, you can hire a sourcing agent or be actively involved in the process.
6. Right time, right decision
No business can prosper if the owner and moderators do not know how to make the right decision at the right time.
Hassling in business decisions cannot take you anywhere. It would be best to have complete know-how about sourcing goods from China to make the right decision.
Chapter 3: Tips to find the best manufacturer in China
Finding a manufacturer that meets the needs of your business is a technical thing. This needs to be done according to a plan.
This chapter has discussed the essential tips that can benefit you to get the best manufacturer for your business.
1. Deciding your products of interest
You can not find the best seller if you are unsure about the product. The first step of sourcing the perfect product from the best supplier is to decide about your product of interest.
Follow the steps given below for determining the best products for your business.
Decide the niche. (For example; Cosmetics, medical, textile, children, stationery and decorations)
Check the competitors’ websites and what they are selling.
Look for the products in high demand.
Shortlist according to your budget.
Find the ones that have the most considerable profit margin.
Sometimes you need to see what different sellers offer and make a choice out of it. The quotations of sellers and your budget will make a choice easy.
You should always prefer asking other sellers and deciding the products that suit you the most.
2. Searching for the right manufactures
There are hundreds and thousands of manufacturers in China, and you can not opt for all at a time.
You need to make a very sensible choice here. Your manufacturer can help you build your business or destroy your running business.
This is because the product you sell on your platform comes from the manufacturer. Any negligence on behalf of the manufacturer can cost you a lot. So the choice about manufacture should be very well calculated.
You should search for all the manufacturers that work in your niche and the products and goods that you wish to get.
Finding the list of manufacturers is not difficult in this era of the internet; all you have to do is to search on Google.
The main point that needs to be kept in mind is the cost. You should shortlist the manufacturer whose rates lie within the range.
Do not go for the very cheap low rates because the quality of goods will be compromised in that way.
3. Shortlisting the manufacturers
To shortlist the manufacturers and find the best one for yourself, you will need to be very diligent.
It requires you to search them on the internet, look for the reviews of previous buyers, check the details of the buyer and satisfy yourself first.
Once you have a list of authentic manufacturers that produce high-quality goods, you can check the pricing and decide according to your budget.
The best criterion to shortlist the manufacturers is the quality and cost ratio of the goods.
The manufacturers that provide good quality products without exaggeration in cost will suit you the most. For this purpose, you will need to ask for a sample.
4. Verification of credentials
You should always make sure you are dealing with an authentic manufacturer, and there is no chance of a scam.
For this, you need to verify the credentials of the manufacturers. Always demand the credentials from the manufacturer and get them to check vigilantly.
This will cut short the chances of getting into a deal with a suspicious seller/manufacturer.
Your outsourcing agent can also do this on your behalf because it is not easy for people residing in another country to check the credibility of a manufacturer and verify his credentials in person.
Chapter 4: Important things about sourcing from China
You must know about the mode of paying Chinese suppliers, protecting intellectual rights, finding the most suitable shipping options, and ensuring the quality of goods.
While importing goods from China, you are most likely to face a few problems. In this chapter, we have discussed those problems along with their solutions.
1. Protecting your intellectual property rights
Intellectual property is the right to only keep the intangible assets to your name.
If anyone tries to copy something that originated from your mind and is sold by your company’s branding with a new name, it is called an infringement of intellectual property.
For instance, if you came up with an innovative idea for a product and launched it in the market successfully, someone steals the idea and makes a similar product with his own branding. You can call it intellectual property infringement.
Infringement of intellectual property is a primary concern of people around the world. To save yourself from such hassle, you should take care of the following things.
Register your intellectual properties in China. According to Chinese policies, the one who registers a trademark or copyright first owns it.
You should always prefer working with famous and prominent suppliers even if it costs you a little extra. The better the supplier/manufacturer, the fewer problems you will face.
The guidelines are unconcerned if you say that you are the actual owner and that you had already registered the trademark in another country.
Do not leave any loopholes in agreements and contracts.
2. Methods of paying Chinese suppliers
The mode of payment for Chinese suppliers has always been a question of interest among masses.
You will find a lot of answers about this question on the internet. The best way to decide the payment method is to keep in mind a crucial rule that is, never transfer money to the any of the personal bank account of the manufacturer.
Always keep track of payments and make sure you use the official accounts to fulfil this responsibility.
Escrow is a very widely used method of payment these days. In this method, the buyer and seller agree to a fixed amount in exchange for some service or product.
Third-party payment methods can be used for paying the manufacturers in China.It is used when you have hired a sourcing agent, so you pay the sourcing agent, and in turn.
PayPal and western union are also some of the most trusted modes of payment.
The agent makes the final payment to the seller.You can also send money through the traditional wire transfer method of payment.
3. Most suitable shipping option for sourcing goods from China
After deciding the other things, the seller and the buyer have to agree upon the mode of shipment as well.
You can find many shipment modes once you start looking for them. Sea shipping, air freight, and road freight are the primary modes. Every method of shipment does not suit everyone.
Sea freight is cheap and very suitable for large quantities of goods. Airfreight is time-saving and costly. Shipping goods by roads using railway shipping or other vehicles is also used for short-distance travel.
To find the most suitable shipping option for your goods, you must consider your requirements like time of delivery, cost of shipping you can afford, the weight of your shipment, reliability, the safety of goods, etc.,
to finally decide on the best option. The most widely used shipping options are;
4. Ensuring quality control when sourcing from China
Whenever one orders goods from China or any lost cost production country, there are always concerns about the quality of goods.
This issue stayed till last few years such that despite using all your efforts you would find yourself in the loss.
But several efforts have been made in recent years, and now you can source goods from China without any significant concern about quality.
It would be best if you always made efforts on your end to be safe from such problems. Make sure you are dealing with a supplier having a good reputation and always check for the reviews of his previous customers. Asking for samples is a good option for the quality assessment of goods.
Chapter 5: FAQs about sourcing from China
1. How can I find a reliable supplier from China?
There are several means by which you can find a reliable supplier from China, such as; through the canton fair, with the help of a sourcing agent, using the B2B marketplace and search engines.
One possible way to find reliable suppliers is to use your network. Among all these modes, Google is the most commonly used source.
The canton fair is the largest trade fair that is conducted twice a year.
If you want to source electronic gadgets, chemical or building material, consumer goods, textiles and recreational stuff, then you will find this fair interesting.
Sourcing agents are the best bet when you have specific instructions about the goods and need unique services.
The B2B marketplaces like Alibaba have revolutionized the sourcing system.
2. Why should I source products from China?
China is the powerhouse of manufacturing. You can get every kind of goods from China in bulk amount, and the cost to quality ratio of those goods is also reasonable.
You can get good quality products at a wholesale rate from China.
China is one of the best available options to source goods for your business.
Chinese manufacturers are the best in the world with regard to their commitment.
The suppliers also make sure they provide you with the correct product according to your needs. So you should source goods from China due to all these benefits.
3. How can I get premium quality goods from China?
Getting premium quality goods at a reasonable price is the goal of any business person.
Premium quality goods always attract customers and retain them. If you invest in the quality of products, you indirectly invest in the future of your company.
To get premium quality goods, you can take help from the effective supply chain of China. First, you will have to devise a good strategy before any kind of purchase.
A sourcing agent can be the deal locker as he catalyzes the process.
The sourcing agent first does not have a conversations barrier, and thus it can present your demands and specifications about goods effectively to the seller.
4. How should I deal with poor-quality goods imported from China?
Getting tempered or low-quality goods from a Chinese supplier is not shared.
If there is some unacceptable change in dimensions of the products, low-quality material used in manufacturing, sub-standard packaging, wrong product or finishing, you can try the following techniques.
Always ask for a sample, and in case of quality theft, connect with the seller as soon as possible and stop inventory right away.
Ask the seller for a replacement and try to fix the problem with communication.
If replacement is not offered, ask the seller to return the payments and try to solve the issue in a peaceful way. Litigation is the key!
In case of piracy, if the seller is not responding, connect with the company through social media and tell the officials about the tempering.
5. What are the most commonly made mistakes when sourcing goods from China?
Communication is the essential requirement of any deal. The most common mistake made by buyers is a lack of effective communication with the seller.
Due to cultural and lingual differences, sometimes the buyer cannot convey the demands, and there occurs a dispute afterward. Other mistakes include
Lack of interest in testing the samples.
Poor quality management and sourcing strategy.
Failure in auditing the prior reports of the seller/manufacturer before signing the contract.
Not checking for hidden charges.
Being non-decisive about payment modes and other such things.
China is the trade hub and the biggest exporter of manufactured goods in the world. Sourcing goods from China might prove to be your best decision in the coming days.
In this blog, we tried to introduce you to every angle of Chinese trade so that you can easily find and buy the goods of your choice.
The blog also included tips for finding top-notch manufacturers in China.
We have shared some frequently asked questions by the end of this blog.
If there is any question still left unanswered, you can ask us at www.Ejet.com. We will be delighted to entertain your worthy questions.