Best Tips for Start-ups to Source Innovative Products from China

2022-12-20

WX20221220-102825@2x copy.pngThe nation of China is truly a marvel. The speed with which this nation has grown and become the second-largest economy in the world is truly shocking. The Chinese economy has been prospering despite the various challenges posed to it. It is a global superpower today and thanks to the proper utilization of human resources, it is the world factory today.

Chinese economy has grown at this speed because the leaders of China realized at the right time that it was the perfect opportunity to open the economy. They made economic reforms and laid the foundation of modern China. The factors which influenced the growth of China are the large population and the manufacturing-friendly ecosystem.

The leaders of China realized that if they want to utilize the human capital to the fullest, then they must make some changes in the laws. They developed such infrastructure that China has today become the favourite destination of nations all around the world for manufacturing. This conducive environment allowed the companies to flourish and with that, China flourished, too.

Today, the muscle power of China has risen so much that it even engaged in a trade war with the USA in 2020. China has flaunted its exporting abilities time and again and has proven its mettle to the world. However, there is always an apprehension in the mind of western businessmen for global sourcing from China

Markets in China

This situation has opened the floodgates of opportunities for sellers on a global scale. If you are an entrepreneur, then the best option for you is to buy from Chinese factories as it will allow you to get products at an extremely low price. After that, you may sell these creative products from China in the local markets of your country to generate profit.

Sourcing agents in China

  • However, this is easier said than done because to get creative products from China and for all this to happen smoothly, you will require the assistance of sourcing agents in China. There are a lot of differences between how things operate in western nations and how things operate in the Chinese market. This is why you will need the sourcing agents.

  • It is not easy to adjust to the environment of the Chinese markets. If you go to the trade fairs organized in China, then you will likely get lost if you are doing business for the first time. Finding the right seller, business negotiations, and all the different modalities are extremely difficult to handle by yourself.

  • Further, when you choose an online platform to meet a Chinese manufacturer, then it becomes extremely difficult to trust him with your money, especially in those cases where thousands of dollars are involved. The best thing to do if you want to procure creative products from China is to get a sourcing agent who will be your agent, guide in Chinese markets.

  • These agents are natives of China. This means that not only they are good at English, but they are also fluent in Mandarin. This breaks the gap in communication between you and the manufacturer. Furthermore, they are also aware of what happens in the Chinese markets and how to get the best deals for you.

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Let’s discuss a few points for entrepreneurs to get the best deals:

  • Do the proper research- before you even start to get in contact with the Chinese supplier to manufacture products in China. Internet these days is full of frauds and you should avoid them at all costs. It is imperative that while contacting them, you adopt due diligence.

  • Start your search for China online suppliers on the platforms like Alibaba and other directories which are the most popular and trusted among the companies. These directories have different categories on which the sellers are categorized. Tags like “verified” and others are testaments of the seller being genuine.

  • When you go to the website of the seller, it should be detailed and must not be a one-page brochure. It must appear to be trustworthy with all the relevant details available. One way how you can tell about the trustworthiness of the web page is that they have multiple offerings and that they have contact details too.

  • Just do a Google search of the name of the supplier and observe what you see. Read all the news and the online reviews that are available on the supplier. It is an added benefit if they have a LinkedIn profile or accounts on other social media apps which are allowed in China.

  • If the supplier is genuine, then he must be doing business with other people as well. Thus, he will have other verified people on his profiles. The best way further is to get in touch with some of the shortlisted suppliers on platforms like Zoom, WhatsApp, or the most popular social media apps in China: WeChat.

  • Almost all of the suppliers and manufacturers in China are available on WeChat. This makes it ideal for communication. Further, if you plan to chat then the app has an inbuilt translator. This will allow you both to communicate without a language barrier. If you choose to do a video call, then ask them to show the product.

  • While buying creative products from China the tone of the supplier is enough to tell you whether they are willing to do business or not. Some of the red flags are they asking for a large sum of money upfront or they are not able to answer the basic questions on the product and the process.

Learn about the supplier

  • After shortlisting the suppliers from China, the next step is to finalize and verify their credentials. The basic information about them can be found online easily. Besides that, you must make sure that they are not a middleman posing to be a manufacturer. The manufacturer will have the required technical expertise to make the goods.

  • Seeking details about the value-added tax and the audited accounts are some of how you can verify the suppliers’ trustworthiness.

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Negotiate the prices carefully 

  • The main benefit of getting your products from China is despite the duties and add-on charges due to the low manufacturing cost the products remain much cheaper. However, when you are negotiating the price, then you must be aware of the floor price which is the minimum price below what the sellers don’t sell. 

  • Do your proper research to get aware of the minimum price. If the seller is selling at a price lower than that, then it is a red flag. Further, large-scale orders can help you in getting an edge over the negotiation. There are multiple ways in which the product and other things may be affected if the seller goes below the floor price. 

  • Once the supplier offers you the products below the floor price, then either he will compromise with the quality of the products or he will cut the cost of the labour. He may also skip some important quality check processes which might be important to ascertain the quality of the products. 

Regular communication

  • The language barrier is critical in the communication of the suppliers. However, as discussed above this barrier can be overcome easily. The next thing is that you will have to make sure that the concerns and parameters regarding the quality of the products are communicated clearly to the manufacturer.

  • The problem with China sourcing is that mandarin is the sole language of communication there. However, some big suppliers have an English-speaking client base and which is why they have some level of command of English. Communication plays a critical role and any level of misunderstanding will lead to compromise in the quality.

  • Once the concerns and parameters have been communicated clearly, you should regularly check on the manufacturer to make sure that all things are going as planned. You better encourage them to ask questions about the specification of products.

  • Understand the business culture of China- it is very important to understand the business pattern of the country that you are doing business in. This is especially the case of China because Chinese businessmen are very different from the ones that you find in the local market.

Conclusion

Doing business in China is not an easy task. When you decide on doing business in China, make sure that you pay attention to the details. If this is your first time, then you must play it safe and must avoid taking risks. This will ensure that you do not make rash decisions while trading with China.

Doing business internationally requires a lot of patience and a great level of skills.

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