China has quickly risen to the top of the list of markets from where you can source goods. Additionally, just as with any widely adopted product sourcing trend, a tonne of business owners and organisations are making all kinds of purchases.
Consumer products made in China account for a large proportion in the world consumer market. Many businesses have found success by global sourcing from China. You have great potential as a reseller or buyer because of this.
However, it could be a challenging task, especially for beginners. The import procedure can be quite difficult, perplexing, and expensive. Long transit times, increasing or fluctuating delivery cost, regulatory fees, and unforeseen delays can sometimes wipe out anticipated gains.
Even if you do not intend to travel there, you still need to get ready for the unique difficulties of getting goods from China.
The problem is that the road to effective procurement from China is paved with shady vendors, dashed hopes, and one-sided partnerships. Many people ponder whether it is even feasible to locate the best suppliers without travelling to the mainland. They had heard numerous scary tales like:
Long delivery delays
Incorrect items
Suppliers vanishing into thin air
Poor quality shipments
Although it is understandable to have second thoughts, keep in mind that there is not a single ideal technique to source goods from China. Your level of information about the seller's product specialty, negotiating prowess, interpersonal skills, and a host of other elements will all play a role in your successful global sourcing from China.
However, if you have a sourcing company in China, your job of sourcing from China can become a little easier.
Pros and cons of sourcing products from China without visiting
You should be informed of the benefits and drawbacks of sourcing goods from China without travelling there before learning how to successfully navigate the China sourcing process.
Pros:
1. Easy to compare suppliers
To find factories in China for your product, you can visit a few websites like Alibaba and Made-in-China to receive a list. Comparing vendors based on ratings, reviews, prices, shipping times, and other similar criteria is simple.
2. Cheaper sourcing
If you research suppliers and order online, you will profit from cost-effective product procurement. You will wind up saving money on travel costs, lodging, meals, and other costs related to visiting a factory in China.
Your time and money could be used on finding something more important.
3. Early engagement
WeChat and other messaging apps have made it simple to get in touch with suppliers fast and conduct real-time chats with them. Before scheduling official meetings in China, merchants can start interacting with their suppliers.
4. Entitlement to samples
You would be well-positioned to request samples for your product if you are interested as you will not be traveling to the supplier's factory or warehouse.
Asking for samples from three to five of the vendors you are thinking about is a wise strategy.
When receiving samples, merchants can keep track of delivery timeframes, damage, import charges, and other factors to gain a general picture of how future shipments might turn out.
Cons:
1. Cannot build deep relationships
Online sourcing prevents you from having face-to-face interactions with vendors. Because of this, you might not be able to forge meaningful connections the way you could at lunch or dinner meetings, bar getaways, city tours, etc.
This can make it harder for you to bargain for a lesser price.
2. Risk of scam
When purchasing products from China without travelling there, you run the risk of falling prey to a variety of frauds. For example, the vendors you select to partner with could not actually have a factory, but they might present themselves as reliable wholesalers.
To eliminate the risk, extensive due diligence will be required.
3. Higher minimum order quantity
Chinese manufacturers want to make a lot of money; thus, they might not be interested in customers who order fewer than 10 pieces of pricey goods or fewer than 100 pieces of cheaper goods.
As a result, you might have to cope with greater minimums, which can be too expensive for you.
4. Long waiting times
Most Chinese suppliers won't start producing your product until a real order is placed. Some might ask for a small deposit to cover the cost of the materials.
If you ask for samples, you will have to wait twice as long unless the vendor offers fast shipment.
Additionally, merchants may not offer solutions to cut wait times since they do not treat online clients with the same respect as those who make inquiries in person.
Few tips for first-time importers
1. Have realistic expectations
We regularly receive emails requesting a new product with high-quality requirements and absurdly short lead times.
If you manage to strike a bargain with a Chinese supplier that seems too good to be true, it is almost certain that they are either trying to lure you in with a fraudulent quote or looking for ways to cut corners during the production process.
2. The first order may always take a little longer than expected
To acquire a realistic forecast of the production time for your first order, multiply your specified production time by 3. The first order always takes 2 to 3 times as long since the process needs to be set up first. For example, before manufacturing can start, you must decide on product and package designs, obtain a sample of the item, and approve the final version.
3. People often forget common costs
Remember to account for expenditures like:
Sample purchases and shipping
Amazon or other platform fees
Customs inspection
Returns.
If you overlook these expenses, you might be shocked to discover that, finally, you do not make any margins.
4. In China, your order size and repeat order is king
You must place large orders and place them more frequently if you want great quality with minimal production expenses. Chinese suppliers have extremely slim profit margins, so they don't have time to waste looking for new customers or changing their production methods.
They will be more likely to negotiate with you if you are a reliable and long-term buyer.
How to import from China?
The following are a few important steps to follow if you are planning to global sourcing from China.
1. Identify your import rights
Whether you are a business or an individual, you must determine whether you have the authority to import products before making a purchase.
Many import laws only cover products brought in for commercial use or resale. Additionally, only the customs authority can decide what counts as personal use.
2. Identify the products you are importing
Trade businesses generate revenue by selling goods. You may lose your time and money by selecting the incorrect products. Making the right product selection for resale is the first step to being a successful importer.
3. Ensure the products you are importing are allowed into your country
Imports of some products are prohibited. Different items are forbidden in various nations. Check to see whether your government has issued any licences or imposed any limits or regulations on the products you wish to import.
It is your duty to ensure that the products adhere to a few distinct norms and regulations.
4. Classify your products and calculate their landed cost
For each item, you plan to import, find the 10-digit tariff categorization number. The tariff rate you must pay while importing is determined by these figures and the Certificate of Origin. Next, determine the landed cost.
Prior to placing your order, consider the Incoterms and determine the total landed cost.
5. Find the Chinese supplier and place an order
With the seller, shipper, or exporter, place your order and specify the shipment conditions that will be followed.
Request a Quote Sheet or Proforma Invoice for your potential purchases after choosing your supplier, making sure to include the harmonised system number, item description, and unit price.
Your P/I must include your term of purchase, the weight, and the packed dimensions.
6. Arrange your cargo transport
Shipping goods involves a number of expenses, such as:
Packaging
Container fees
Broker fees
Terminal handling
Each of these elements needs to be considered to gain a clear view of shipping prices.
7. Track your cargo and get prepared for the arrival
Usually, the cargo from China must travel a very long distance and hence may require a longer time. Therefore, you need to regularly track your cargo based on the info sent by your supplier.
This will help you to remain well prepared when the items actually reach your country.
8. Obtain your shipment
Make plans for your freight forwarder to clear the items through customs when they arrive (and quarantine them if applicable). You have the right to pick up your package if everything goes according to plan.
If you choose our door-to-door delivery service, all you must do is wait till your package arrives at the specified location.
Final word
The only way of succeeding in business is to put what you are learning into practice. You can profit by global sourcing from China if you adhere to all these recommendations and conduct thorough research. Hiring a trusted sourcing agent in China can make your job much easier.