The business dynamics of the world keep on changing because of several reasons and with the advent of internet, particularly direct sourcing has now become one of the most dominant trends in almost all industries of the world.
This business approach, help reduce the FOB price as buying from the factory directly can enable you to buy at a reduced price and it becomes possible to eliminate the many different margins that all the trading companies often demand while making procurement of any kind of finished or raw materials.
Direct sourcing will not only help any business to reduce the overall import cost but also, it will help to become more competitive while doing any further value addition. However, to achieve this, there is a greater need for serious hard work and it must be done professionally.
Just imagine the scenario about 15 years back, when direct sourcing solutions were non-existent and all companies used to take the help of a certain trading company who was an intermediary between the importer and the product manufacturer.
Today, China has become one of the main sources of all kinds of industrial as well as consumable products. Therefore, to directly source from China now you need no longer depend upon any Hong Kong-based companies to import.
Any trading companies used to keep a minimum margin of 20% as a trader, however with this arrangement, they also used to offer certain additional services too, that you also need to consider while importing directly from China.
China is undoubtedly one of the largest countries as far as wholesale sourcing for almost any goods are concerned. They are the world's largest manufacturer, and they are supported by a variety of industries and infrastructure.
The best course of action appears to be to directly buy from China factories. Take into account the fact that now you are purchasing straight from the source, eliminating all middlemen and their influences. There are numerous other benefits to purchasing directly from China, though.
Let us explore the different reasons why should we prefer to directly source from China.
1. Cheap and reasonably quality products
A large selection of products is available from Chinese sources for comparatively modest costs. You might wish to find out why the things are so reasonably priced from these providers. The response is not absurd.
You would see that these elements contribute to your low prices of items if you take a quick look at the large numbers of manufacturing industries and the low cost of labour. Imagine that you are also purchasing in large quantities. Your order prices will be even lower.
2. Great infrastructure
You would concur with us that excellent infrastructure was necessary to provide a cheap product of the highest quality. Production and the entire business process are made simpler by China's sophisticated infrastructure.
You can evaluate how wonderful their infrastructure is by looking at how many highways, railroads, and any other transportation facilities have increased significantly in the last 20 years. How does this extensive infrastructure support your purpose, then? Your goods arrive more quickly, are of great quality, and are safer.
3. Higher production capability
As was already established, China is the world's largest manufacturer and has a variety of sectors and infrastructure. Their production capabilities now fall to a certain whole new level as a result. A good one!
These industries create items for the world economy, and therefore it stands to reason that they do so in a big and extensive manner. You may be confident that you will receive high-quality goods in significant quantities when you will order your products directly from these providers.
4. Production efficiency
If we take factors like labour costs, training expenses, and equipment prices into account, domestic manufacturing in some countries can be expensive. These expenses frequently end in failure.
With Chinese providers, this is not the case though, as the prices are really reasonable. They hardly ever have an impact on how they work. Hence, you must place a direct order with them.
5. Latest trending products
The world's best manufacturing companies are located there, and all different kinds of items are manufactured there. Therefore, it is logical to assume that these providers will have the newest trends in items.
They lead the manufacturing industry, thus any minor upgrade or trend will most likely to be originating there. You can sample these popular products before they are offered in other nations or retail establishments if you directly order from these providers.
6. Cheap labour
China is known for having cheap labour. Together with the basic fact that all these manufacturing enterprises have the advanced infrastructure, the wages are substantially lower.
It does not appear like the production process is all that difficult. When you directly source from China and place an order directly with these suppliers, getting access to these delicacies is simple.
7. Direct access
There is also the aspect of the relationship. When you place an order with a Chinese supplier, you should already have some kind of relationship with them. The truth is that if you have a link or connection with a trustworthy partner there, you may receive preferential treatment when it comes to gaining entry.
In order to contribute to the creation of their products, you can also have a direct connection with their engineers and also the product design team.
8. Fast response time
You might be sure of a quicker response time for your deliveries and questions if you had a direct connection to Chinese suppliers. The response time of such kind is typically unattainable from trading organisations, but it is possible to obtain it from these Chinese suppliers.
9. Product cost
The majority of the time, buying bulk items from China gives you the chance to obtain a product at the most competitive price. Keep in mind that since you are purchasing directly from the supplier, variables like trading companies now have been eliminated.
The following are some of the steps needed when overseas sourcing from China:
a. Sourcing China suppliers on the internet
Millions of individuals use the internet to find items that suit their needs. On numerous websites, sellers and customers from China are in the millions. Credit checks and supplier capability assessments offered by Global Sources can give suppliers important company information including development incline, presentation strength, and setup momentum.
b. Recognize your import rights
When you buy interests from unexpected references, you evolve your importer. If your package is little and intended only for personal use, or if the problem is not too large, the porter will put up with everything and deliver it to your doorway. It can certainly help you to save your time and money a lot.
However, whether you are a businessman or any individual, you must determine whether you have the authority to import goods before making a purchase.
c. Recognize your importing interests
You are aware that the outcomes you want to import are necessary. Make sure the analysis has been done. You should find out approximately how much your goods should sell for break even on sales.
Your top priority should be selecting a result you can sell. Everything you do depends on the goods you sell. Your transaction, your payment margins, and the approach you employ will all be impacted by them. Arriving at slack are logistics and legal restrictions.
By selling results, marketing companies make money. Making incorrect product choices shows that you are wasting both money and resources.
d. Estimate your lighted expenditure
Early arrival at anchored expenses is essential. Nobody loves to give up customers or money. If it turns out to be taller than what you had anticipated, you can try to find strategies to reduce the cost details. If your funding is in order, you can move forward and begin the process.
e. Identify your Chinese supplier and order
Specify delivery conditions when placing your direct order with the merchant or shipper. Ask a certain P/I for your investments in the future to include the report, coordinated strategy number, and value/item once you have chosen your provider.
f. Set your shipment
Shipping goods comes at a price, including charges for containers, packaging, terminal handling, as well as dealer fees. Each of these factors needs to be included in a budget to get a complete picture of shipping expenses.
g. Time of your shipment in China
It takes time to ship items internationally. On average, it takes goods delivered from China 14 days to arrive on the American West Coast and 30 days to arrive on the East Coast.
h. Obtain your shipment
You would send an email to the provider informing them that now you have just received your items but have not yet checked them once you had obtained your items and delivered them at the right rate, packaging, and brands.
Because of the intense competition in the worldwide market, all businesses must prioritise their profit margin while maintaining or even improving product quality. That is the key reason why many businesses throughout the world choose to directly source from China.