China is a famous destination for finding cheap products to resell. Companies can expand the boundaries of their profits by sourcing in China directly. There are several consequences to be wary of when planning to buy products from Chinese manufacturers. When addressed properly, the Chinese market can provide outstanding products at high-quality costs.
A strong supplier relationship can result from direct purchases. When first starting, the procedure may seem complicated and perplexing, but it doesn't have to be that way. For decades, businesses have effectively sourced products from China. Making proper decisions may simplify and secure the sourcing process.
Still, for beginners, there are three options when sourcing from Chinese suppliers. They can opt according to their needs, product specs, budget, and circumstances.
Retail purchasing
Before reaching the customer, retail items may transit through one or more mediators. This supply chain is supported by links between wholesalers and distributors, where each of them often raises the basic cost, which was initially lower. The benefit of a wider item range based on factors like quality, affordability, and design can be provided to customers by retail suppliers at the same time.
Retail shopping can provide a more individualised experience by allowing customers to compare products and look around before deciding. Additionally, buying from wholesalers and retailers saves money on shipping and other related expenses.
Direct buying
Bypassing the entire supply chain and buy products from Chinese manufacturers directly can help avoid additional costs that accrue between interposers. Although there are fewer options available to consumers, it is a more cost-effective option.
Earlier, manufacturers received only a small portion of distributors' margin. To be respected and promote sales, they additionally demanded the endorsement of a reputable retailer.
Direct purchasing gained significantly a decreased original price from the elimination of intermediaries. However, a customer must still factor in everything, including transport, warehouse operations, packaging, retail display, and marketing.
Wholesaler
Although directly order products from China has many benefits, there are some situations when working through a wholesaler and utilising existing infrastructure is still more effective. If the retailer is unable to sell the product within a reasonable amount of time, the wholesaler can be held liable, and/or the product must be stored in an external warehouse with significant storage charges. Or when bigger volume discounts make purchasing via a wholesaler significantly more affordable than doing so straight from a manufacturer.
Thus, it can be said that the most practical and cost-effective way to avoid paying extra fees to intermediaries is to buy products from Chinese manufacturers.
How to buy directly from manufacturer
Find the right Chinese manufacturer
Internet
Reaching out to B2B platforms can be more beneficial than conducting a generic search on Google, Bing, or Yahoo. These are websites that link purchasers and Chinese manufacturers, such as Alibaba, Global Sources, and Made in China.
Peers or industry source
Your professional network is another beneficial resource. This may include referrals from trade associations, your contacts in the industry, or even other businesses.
Trade fairs
If you have the time and energy, attending a trade fair in China like Canton Fair, is a great method to discover manufacturers or suppliers. The size of your company, the kind of products you want to outsource, and your budget will all have an impact on how much time and money you can invest.
Companies that are just getting started with outsourcing can choose to work with sourcing agents who can assist them find suppliers and walk them through the process slowly.
Communicate with manufacturers to verify
You will need to narrow down the list of probable vendors that your initial searches will produce. You can accomplish this by getting in touch with each of them and explaining your needs, such as component specifications, the materials to be utilised, the prototypes to be used the MOQ, and the pricing per unit. Additionally, you can inquire further about them, which would help in the verification process.
You must also verify their credentials. In addition to requesting their business licences and certificates, you should request the factory’s audited financial statements, examine the Value Added Tax invoice, and request product samples. You can also find the Chinese name of the factory, its location, and the original government agency that is in charge of overseeing it.
Benefits of direct purchasing
Direct purchasing saves on retail space costs, transportation costs, and wholesaler fees. Both parties can gain by splitting the costs of the contracting party's infrastructure, people, transportation, and storage.
The chances of poor quality and extended shipment times rise when a distributor is involved. Manufacturers provide better shipping choices, greater control over transit, assistance with customs, and quality control in a direct transaction.
Fewer errors and problems result from direct contact. Furthermore, it enables a more rapid information flow and direct manufacturer assistance.
A steady, long-term relationship with many advantages for both sides can be developed with the use of open communication.
Direct access offers a chance to address the problems and ask questions to get advice and ideas from the manufacturer, who is familiar with their product. That helps in maximising the use of the product and its advantages.
When you buy products from Chinese manufacturers directly, it has its advantages. However, it is also good to know your situation and make decisions accordingly.