A creative product sourcing strategy is dependent upon your approach to finding the right online suppliers in China. Most of you are not based in China but have realized that this is an emerging market for nearly all consumer and capital goods. It is no secret that China is considered the 'world's factory and emerged as one of the top sourcing destinations in the world.
With a plethora of suppliers available in the market, it may seem daunting and complex to know which supplier to go to and whether they are the right choice for the type of product that you want to source from them.
It is quite a famous saying that you don't trust what you see online, but you would be creating your entire business model based on Chinese online suppliers over here. This realization can make you hesitate and perhaps even give up on the idea of using the online medium to look for Chinese suppliers. If you look for advice, you might find other people telling you that sourcing from Chinese suppliers, especially those located online, is a huge risk for the order quality and standards. Nonetheless, some people have established themselves by having online suppliers who they have probably never met.
So how did they go about achieving this task? Here are our four tips to help you on how to find online suppliers in China.
This tip seems like the most obvious answer because you would be looking for online suppliers in China. However, that doesn't mean you should randomly start searching for suppliers online. Many scams can easily occur in the online world, and you are just a click away from having all of your hard-earned investment stolen from you.
Hence, it would help if you always looked for a highly reputable Chinese online supplier because you are giving them the most important job of your business: giving your range of products.
In such cases, how do you approach the internet? Well, it's simple you look for online suppliers that should be concentrated on certain websites. It is similar to how you would go shopping for your favorite gadget, where you evaluate all the available brands supplying that product or a close substitute for it. By doing so, you would complete market research of all the online suppliers based on your product.
Websites such as Alibaba or Aliexpress are classic B2B online marketplaces where you can source products directly from online suppliers. However, with that said, such websites also have all kinds of suppliers, so you would need to be careful with whom you create a partnership for sourcing. That means scanning the entire product portfolio of a supplier against other suppliers offering the product you are looking to source and comparing them for prices and customer reviews.
When searching on the internet, customer reviews are some of the most important components to focus on. They give you an idea of the supplier's performance in delivering the product and the product quality that the customers are receiving. Often, products costing just a penny about the dollar can seem highly tempting but, when you look at the number of times people have ordered from the supplier, you find a negligible number. That is one way of knowing which supplier to trust. Another way is the customer ratings that give you an idea of what the product is ranked out of 5 stars. So having a rating of 4.2 above is an indication of a good product for potential sourcing.
By shortlisting online suppliers based on pricing and customer reviews, your approach to using the internet would be similar to how you search for a seller of the product.
The internet has taught us a lot of things, so use that to your advantage. Watch reviews of suppliers and tutorials on YouTube or Dailymotion platforms to familiarize yourself with the process. So that you don't feel alienated or paranoid when looking for Chinese online suppliers. By watching videos of other people's experiences of finding online suppliers, you will feel more comfortable and self-aware about diving into the Chinese supplier market.
You may have come across advertisements for hiring a sourcing agent or sourcing company while searching for online suppliers in China by yourself. Well, don't disregard those advertisements because, as you know, China has a diverse portfolio of suppliers dealing with all types of products. A sourcing agent or a sourcing company is knowledgeable about China's complete supply chain management. As such, they are familiar with which suppliers to target and how to negotiate and coordinate with the factory to manufacture your order.
Not to mention, they take the burden and the worry of finding a supplier off of you.
Looking for a sourcing agent or a proper logistics company also requires skills and some in-depth research, but the reward is that you can rely upon them completely for all of your product sourcing needs. A sourcing agent has a very important role to play in your fledgling business.
Before you look into a sourcing agent or a sourcing company, know the difference between both. A sourcing agent is a person or mostly an agency that will be representing you to the manufacturer or the supplier. A sourcing or logistics company will provide you with a range of services; they are more professional and organized. This means that from manufacturing control to order monitoring, your product will be safely delivered to you. With a professional team handling your order, you are bound to get a great customer service experience from them.
You can look for a sourcing agent or logistics company through a Google search. Searching with the keywords' sourcing agents in China' or 'sourcing companies in China' will provide you with a list of options. Be careful and pay attention to the number of years the sourcing agent or company has worked for and the type of products they have sourced before. It is also important to focus on the region they are located in, especially if you hire a sourcing agent. This is because most of the suppliers for a particular product are concentrated in a specific region of China.
Hiring a Chinese-based sourcing company or agent instead of non-Chinese agents provides an obvious advantage of knowing the Chinese language and China supplier market. But, apart from that, there are other advantages, such as paying a lower commission cost. Just like Chinese suppliers are charging lower prices than other suppliers in the international market. Similarly, Chinese agents and sourcing companies will not cost you an arm or leg. However, that doesn't mean you should trust or hire a sourcing agent based on the lowest commission. Often Chinese individuals can pretend to be sourcing agents to get the money out of your pockets, after which they will disappear.
Hence, this is why you should always create a sourcing contract with a sourcing agent.
It may seem quite strange to you why this tip is included in finding Chinese suppliers online. But it is quite an important tip if you want to avoid having any additional drama or miscommunication while saving costs. Within China, there is an existing difference between a manufacturer, supplier, and a re-seller. You can choose to buy from any three of them, but you should know how to identify one among the three if you are specifically for an online supplier.
This is because, with the rising awareness about low-cost product sourcing, a lot of individuals have jumped on the bandwagon and become the middleman in your product's supply chain process.
So which ones should you choose?
If you are looking to source a private label product, then opting for a Chinese manufacturer is the right decision. Chinese manufacturers should be your top priority if you are looking to work with them to supply you with the product and design and develop it. Chinese manufacturers will cater to your requests and provide you with product samples. However, most of the Chinese manufacturers might refuse to cooperate.
The reason we'd suggest not to opt for them is if your products are without IP protection. A NNN agreement, the Chinese version of the Product Development Agreement (PDA), is meant to prevent the manufacturer from adopting features of your product or cloning it to sell at a lower price. Thereby making the manufacturer your competitor. Another disadvantage would be that they are manufacturing similar products for other clients, which can create issues if you want changes in your product.
You're most likely here to find these guys out, so Chinese suppliers are usually the ones that either manufacture the products or are only buying them directly from the Chinese factory. Opting for a supplier should be your go-to option if you are not looking to get a patented or private label product sourced. Mostly you will find more online suppliers for common items that have higher competition in the supplier market. In other words, you will have an easier time getting a good bargain.
Opting for online suppliers is good for products that you don't need to get a feel off physically, such as jewelry, pet supplies, or metal products. Electronic gadgets or clothing is a slight risk because you need to physically view the product to see if it is up to the quality standard and cater to the market you aim to sell.
Re-sellers are not necessarily from China, and these are the guys to avoid because, without a doubt, they will be charging you a higher price than a supplier or a manufacturer. Never opt for a re-seller because they are doing the job that you wanted to do. Hence, they are the middleman and eat into your share of the profit. As a business to business re-sellers are not recommended. They are a great option if you are going as the final consumer to purchase a product. But even buying in bulk from them will not give you any significant discount or advantage of economies of scale.
Suppose you are a beginner and have no knowledge of product sourcing. In that case, you may take the easy route and opt to buy bulk from Chinese online suppliers present on Aliexpress, Amazon, or Alibaba. For starters, Amazon is not meant to perform as a B2B marketplace, especially if you are looking to get low-costs. You still will have a significantly lower profit margin than if you were to opt for a sourcing agent or reach out to the Chinese supplier directly. There may be Chinese suppliers selling on Amazon, but they could very well be re-sellers or wholesalers, which doesn't give you that much advantage to scale your business.
Similarly, Aliexpress and Alibaba are considered the hub of Chinese online suppliers, and even a search on Google will direct you towards it. They aren't a bad option, but they aren't the best either. As the international wing of Alibaba, Aliexpress does have Chinese manufacturers and suppliers. But here is where you have to apply Tip 1, which increases your workload. On average, you may be spending 2 to 3 hours just scanning one supplier for a product. So if you are looking to source multiple products, this is a time-consuming, not feasible option.
Look for websites or online trade fairs where you directly interact with the Chinese supplier to better communicate with them. Moreover, by sourcing from such websites, you cannot create a sourcing contract that is essential to help you and your supplier remain on good terms. After all, your supplier is your business partner. Having a sourcing agreement will allow you to outline the type of relationship you have with your supplier.
Creating a sourcing contract with such suppliers is also easy because they would be interested in doing business directly with you. You can list many important details in the sourcing contracts, from deciding on the price to the product quality and the warranty in the mishap. This will also prevent any unregistered production activities from taking place.
You might have heard of contact directories; this is a supplier version of it. It enables you to rest assured that you would be contacting verified suppliers. We'd suggest you look at websites with supplier directories. This is because such a website would do some of the work for you by verifying the suppliers for particular types of products and then listing them on their website with the contact details. Thereby making your work easy and allowing you to reach out to them directly.
Suppose you feel skeptical about the process of finding Chinese suppliers online. In that case, there are some clear-cut advantages of using the online medium rather than physically searching for suppliers. One of the major advantages is that you won't need to invest a separate time and cost to visit China. By hiring a sourcing agent or sourcing company, you have delegated the responsibility to them. So if you have any existing businesses or other products that you sell online, you can focus on them without any worries. The sourcing company will look after the entire product sourcing process while giving you regular updates about it.
Product sourcing from Chinese online suppliers seems like a very lucrative opportunity, and it is for the most part. However, with that said, you have to be careful of how you manoeuvre the waters. There are a lot of differences when sourcing from China. Your first difference is a language that can impact your quest to find reliable and reputable suppliers online. It takes effort to look beyond the mainstream B2B websites, but it also a lot more rewarding in terms of revenue and profit generated.
At Maple Sourcing, we provide you with a range of facilities to make your quest for online suppliers a piece of cake so that you can source products as easily as shopping online. As a verified company, transparency in communication is one of our top priorities. Using qualified manufacturers to give competitive pricing, we aim to be the one-stop solution for you to find online Chinese suppliers.