Buying in bulk usually saves you money by lowering the per unit price of the product. Negotiating a lower overall price for a larger quantity of goods is easier as suppliers are certain of a sale even if they have to take a smaller profit. A returning customer is valuable to long-term sustainability.
Sourcing from a China wholesale supplier works well for products that sell consistently. Validating your product is a necessary first step before looking at suppliers and requesting samples. If you're unclear about the saleability of the product, you run the risk of making a loss.
One of the first things that Amazon sellers have to get right is the product to source from China. What are people interested to buy and why? What is the competition like? How can I differentiate my product? Occupying yourself with these questions early on will help you avoid regrets later.
You can go about it in a couple of ways:
On Amazon USA, consumer electronics is the most popular product category, followed by apparel, jewelry, homeware, and kitchen utensils. The tons of research information online, including on the Amazon website, is helpful in recognising what people buy.
Google Trends tells you about the products people are searching for most online. Knowing which ones are in demand and why is a helpful starting point during market validation. See the search volumes for the product over time to identify whether there are seasonal changes in its market demand.
With a few product ideas to go with, it's time for market validation before proceeding to buy bulk items from China. Your focus group can include friends, relatives, colleagues, and people on forums and social media. Ask them about their experience using your prospective product. Some questions to ask include:
• Have you bought [prospective product] in the past?
• What kind of [prospective product] have you purchased?
• What did you like about it?
• What problems have you experienced?
• How much have you paid?
Some of the things you'll quickly learn are:
• What your target customers want
• Whether they care more about cost or design
• Whether they begin their product search on Amazon
• How tastes differ across genders
Look back at your own experiences using the product. If it isn't a product you've used, you may want to try it to get intimately familiar with it and add more points to your focus group findings.
With a defined product validation process, you can always go back to find new products to sell. You'll have a ready system to use to test alternative product ideas if the initial ones are economically unviable, which is the next step.
On the cost side, question the viability to buy in bulk from China. Can you get the product made at a price that assures you a good profit margin? Shipping accounts for a significant part of overall product cost. Is the product light and easy to ship? Before you source bulk items from China, think about whether they have any risk - shipping wise (fragile) or safety wise (medical equipment or food items). Also, you need to learn taxes and duties for the products imported to the destination country.
A China supplier can be a factory, wholesaler or trading company. Each has its pros and cons.
Amazon sellers looking to customise a product, private label and buy bulk from China work directly with manufacturers.
• More control over quality
• More choice for customisation
• Product differentiation
• Search for the right supplier can be long
• Language problems
A trading company buys products from the manufacturer, and hold them in stock to sell to importers.
• Good English communication skills
• Stock several product categories
• Products from various manufacturers
• No control over quality
• Don't accept liability for defective products
• Can ghost you
A wholesaler buys, imports and warehouses the product.
• Have offices in western countries
• Easier communication
• Warehouses in seller's country helps reduce shipping cost and delivery time
• Usually cannot arrange customisation
• Charge a higher price
A third-party reduces your profit margin. Sorting out quality issues can be impossible or unproductive as trading companies and wholesalers/distributors have no control over production.
Working directly with a factory gives you more control over your quality and order but the large geographical distances and language barriers come in the way of smooth communication. Given the considerable back and forth in the typical sourcing process, these factors can be quite overwhelming, particularly for first-time importers. It's why many businessmen hire a China sourcing agent to buy bulk items from China.
A sourcing agent is a company that handles the full procurement process for western importers. The agent has an office in China, and may even maintain one in the importer's home country though this isn't the case for many sourcing companies.
Where a sourcing agent shines is in connecting you to a manufacturer from their network. They submit RFIs, and assist with negotiation and cost evaluation. This apart, their services cover aspects of procurement, such as:
• Product prototyping, sample preparation and package customisation
• Factory checks
• Order monitoring
• Quality inspection
Also, the import agent helps you fill the documents for importing process. Their staff speaks fluent English, making communication easy and ensuring that things don't get lost in translation between you and the manufacturer. They have an online and phone system to move communication back and forth, and keep you up-to-date on your order.
For quality-obsessed Amazon sellers, sourcing agents are an important ally in a couple of ways. They help you find a manufacturer with the capability to make your product. Their design team's inputs speed up designing and sampling. Factory audits, in-process checks and quality inspections reduce possibility of a large defect rate. A sourcing agent keeps everything transparent and ultimately helps you build a mutually rewarding partnership with the manufacturer.
A sample product is the deciding factor to buy from China in bulk. All manufacturers will be happy to send you a sample and revise it according to your feedback.
The sample indicates how the final product will look, feel and function. It is the litmus test for your product idea. If you're not okay with it, you can tweak the design and bring it up to your target market's expectations first.
The sample is also a litmus test for the factory's capability in making your product. If everything checks out in the factory audit, then the sample should be able to meet your quality standards.
Production processes like injection moulding require the necessary tooling. An initial sample run is the protocol prior to mass production.
The type of sample differs based on the product and sourcing method, as explained below:
Trading companies and wholesalers provide the product already in production that you want to white label. They can send you many example products from different factories during your initial supplier evaluation. Factory samples go out to other buyers in your category that are working with the same wholesaler. It helps you gauge the supplier's quality level but doesn't give you an indication of how well they might be able to make a product based on your design drawings.
When you work directly with a factory or go through a sourcing agent to buy from China in bulk, you can have a sample made to your specifications. You provide the design drawings and other instructions and, if possible, a comparable product sample. The manufacturer or sourcing agent's team (if they have this capability) shares their inputs and assist in tweaking the design. Depending on the product, this can take anywhere from a few weeks to a couple of months.
An in-process check is done to ascertain that products are being made to specified quality standards. Two types of production checks are performed: laboratory testing and quality inspection.
The lab test involves sending a batch sample to a third-party accredited laboratory to confirm its compliance with safety and quality standards in western countries. In-house lab testing is expensive for most manufacturers and as such, they don't offer this service. Accredited laboratories provide accurate reports. Proof of compliance, such as a health certificate for food products, must be presented to customs authorities (along with other documents) for smooth clearance.
Quality control occurs at various stages of production, from initial raw material and component checks to inspecting finished items chosen randomly and a final check prior to shipment. A quality inspector performs the checks and sends you the report documenting his/her observations. The checks include all the requirements you communicated in detail to the manufacturer.
Quality inspectors know what to check for and have the tools to make accurate deductions. They visually inspect for defects and damages, use measuring tools to confirm dimension precision and do function and packaging checks, among others. Photos of products are often included with the report.
You need to set an acceptable defect rate. Based on the number of defects in a batch, as determined by the quality inspector, you can approve or reject the order. If you've set a defect rate of 5%, and find that 7 of 100 products in a batch are defective, then you can reject the entire batch.
You pay for both services. A sourcing agent can provide or assist with lab tests and quality control. The QC inspectors on their staff visit the factory or are stationed there to conduct in-process checks. The cost of the service is included in the overall charge for handling the full procurement process. The sourcing agent may also arrange for lab testing or ensure that the factory sends samples to the lab you've engaged.
An alternative exists but it isn't any cheaper. You can come down to China to inspect your order. This may appear doable if you're an experienced importer with production experience. But what you pay in flight, visa and hotel costs may exceed that which you pay a QC agency and laboratory. If you have no experience with quality control, then it's better to get it done by a professional and avoid the risk of accepting a defective batch.
Validating the safety and quality of products you buy from China in bulk is important to sustain your Amazon business. Defective products can harm your reputation and result in a suspension of your account. The fee you pay the lab and quality inspection agency is a small percentage of the overall cost of your product.
Products tested at a laboratory in China accredited by authorities in your country (ex: a CPSC-accepted testing lab for a product bound to the US) needn't undergo another test in your country. As most of the major testing companies in the US, Europe and Australia have branches in Mainland China, compliance checking is quick and easy.
China bulk wholesale suppliers keep the final price open. They expect buyers to negotiate the price on bulk orders, so asking for a reasonable discount should be on the table. That said, guard against driving the price too low as it will only result in the manufacturer losing interest in you and paying attention to other prospective buyers. Trading companies may be able to source for cheaper but you will be in the dark about the factory in which the products will be made.
A China sourcing agent can help you negotiate the best price for your product, without any impact on quality or delivery time. Successful price negotiations, along with other factors like good product quality, a real demand for the product, positive reviews, on-time fulfillment and effective marketing, lead to an increase in profit. The professionals at Maple Sourcing will be happy to give you more information on how we help you buy bulk items from China at competitive prices.