For business owners around the globe, the primary goal is to increase revenues while reducing costs. The current global business climate is constantly subjected to shifts in the demands of clients and is more susceptible to disruptions. Both of these tasks appear incredibly challenging.
China continues to be an attractive option for retailers because of multiple options besides low production costs.
Easy access to materials
Cheap labour cost
Surpasses in mass production
Organized production lines.
In short, the Chinese know how to make things! You just need the ideal suppliers.
Importing products made in China is a difficult task but not impossible. There are myriad manufacturing facilities across China with capabilities to provide different quality standards. Finding the best supplier is essential to building a successful business not just for new ventures but even the established companies. Quality and reliability are the leading top priorities for those businesses that work with overseas suppliers.
Choosing a supplier is not as simple as online shopping. It is essential to have a solid understanding of the supply chain process as well as thorough research to support your decision of partnering with a supplier.
Guide on how to find a suitable Chinese supplier
Understand your needs to choose a supplier
Suppliers in China are of two types – Factories and Trading companies.
Factories specialize in a specific product because they have drastically varying machines and equipment.
For example, a metal forgery needs expensive machinery, while a textile factory needs sewing machines. The skill set to manufacture stainless steel products differs from textile production. Factories specialize, so have a small product assortment and high MOQ [Minimum order quantities]. The prices are lower and you gain more control over product manufacturing by partnering with factories than trading companies.
The trading company does not manufacture products but sources from factories. They are somewhat similar to a wholesaler or distributor. The advantage is you get wide product varieties with low MOQ. They help to find a supplier that is normally hard to find, especially if you belong to a chemical or medicine niche. The trading company charges higher prices than factories and you have less control over the real production process.
The type of supplier you choose will depend on the kind of product you need to outsource from China. Ask the potential supplier if they are a trading company or a factory. If they are a factory, then you need to research further about their manufacturing skills, specialization, experience, product certifications, and more.
If your order is in bulk, then working with a factory is great. Besides, achieving the lowest price you can communicate directly, especially when you need to customize products in China. For small products or a variety of goods from different categories, it is wise to work with the local trading company.
Use search engines & online directories
Use search engines and online Chinese supplier directories to build a list. It decreases the feeling of scarcity when you connect and negotiate with a potential manufacturer. At the start, you will feel that every manufacturer is your only hope. So build a lengthy supplier list for direct communication.
Google is usually the primary source to find information. However, when you type Chinese suppliers the search bots will come up with millions of results. You are unaware if the sources are reliable or not. You will need to vet each one strictly.
Check Chinese wholesale websites. Read their return and delay policies and ensure they published their contact details on the site. Google search the specific supplier for scams. There are chances that someone had a bad experience and left a trace on the internet.
There are several B2B directories you can look for suppliers. It includes Alibaba, Global Sources, and more. Check reviews, ask questions, and get references but beware because members are trying to self-promote themselves. Look for established suppliers or those with 2 to 3 years of experience.
Alibaba offers verification services, which makes it easy to trust. On Google, you can come across information about the supplier’s participation in recent trade shows. Repeated participation in trade shows indicates that the supplier is committed to nurturing customer relationships.
Visit trade shows
You can talk in person with potential Chinese suppliers about their products, company values, quality control measures, and production capacities. Direct interaction allows us to see the potential suppliers' competence closely. The two popular trade fairs or shows hosted in China are East China Fair and the Canton fair. The latter is the largest and is held two times a year. It attracts massive participants and attendees demonstrating massive varieties of goods.
The former is a large regional trade fair, which is hosted annually. Most of the deals are completed onsite and are popular for the highest turnover.
Make a call
Scammers don’t offer real registration details on the internet to avoid getting tracked by enforcement authorities. They provide fake company names, addresses, and phone numbers or can push buyers to contact via mobile phone only.
Remember, if the supplier has no landline then it is a red flag.
Mobile phones can be purchased without limitations or restrictions. Therefore, scammers use mobile only rather than landline phones. See what a Chinese landline looks like. The first two digits are the country code and the next two are the area code. Use area code to check location. Call the supplier's landline and ask for its business license and registration number.
Check business license
The Chinese Government issues a unique business registration number. If your supplier cannot provide a business license, then it is risky to work with them. If you are given the registration number, then contact the local Bureau of Industry Commerce or Local administrative government website to verify.
Ask for referrals
It is important to verify that the supplier has the production capabilities, certificates, communication, and technology skills necessary to meet your delivery time, quality, and quantity expectations. To determine if you can recover any losses from a contract dispute, you should verify the financial statements of the supplier.
It is the best way to ask previous customers about the potential supplier’s reliability and quality. Ask for references and contact them.
Ask for factory audits
In the first email or encounter ask for factory audits before placing an order. If the supplier makes excuses or refuses, then it’s a red flag. A factory audit allows verifying the supplier’s production capabilities and quality compliance. You can have a factory audit conducted by professionals or quality control providers.
Order product samples
When you are buying products made in China then ask for samples. Even if you will have to pay for the initial sample…get it. It allows the feeling of the sample and you can check its quality and craftsmanship to identify if it is what you desire. For the initial sample, payment insists to transfer to the supplier’s business bank account [not to a personal bank account]. If they are unable to offer their business bank account details, then it’s a red flag.
You can even get a product sample picked by a China sourcing company from the provided address and pay cash. If they allow it then it is a legit factory because scammers will refuse or make excuses.
Payment mode matters
Common payment modes in China is Western Union, MoneyGram, and TT. Good suppliers even accept PayPal. Be cautious when untraceable wire transfers are used with unknown suppliers because there is a high risk of fraud.
In-person factory visit
To verify suppliers, an in-person factory visit is the best solution. You can discuss products, quality standards, prices, procedures, delay, and return policies, expected delivery time, and more face-to-face with ease. The visits help to understand the process and in the future give you an idea of the issues manufacturers are dealing with. Factory reviews even ensure that the practices and procedures are up to required standards.
You cannot visit every potential supplier but narrow down the selection using the above steps before jumping on a flight to China for an in-person factory visit. It is crucial to communicate but never get obsessed with choosing a supplier that speaks perfect English. You both need to get points across using translation software. It is good to prioritize quality standards compliance and order quantities.
Outsource to sourcing agency
Sourcing agencies play the role of a middleman between buyers and suppliers. If you are a busy or a new business owner, then it is a good solution to make use of a best China sourcing agent. The agency has a specialized team that connects multinational corporations to Chinese suppliers. The main services they offer include -
Find and verify a suitable supplier in China.
They are shrewd negotiators and have a good supplier network. You get competitive rates without quality depreciation.
Perform factory audits, production follow-ups as well as China inspections.
They ensure that the production process is executed according to the contract.
They even handle the complex shipping and delivery arrangements.
Although a reliable online sourcing agent can do some heavy lifting, such as identifying and verifying suppliers. However, you still need direct involvement in the purchase transactions.
The best solution for buyers to source products made in China from a supplier is to do their research before signing an agreement. Even if they partner with a sourcing agency in China it is crucial to be meticulous with the verification process to determine the credibility of the potential supplier.