How Do You Source Goods From China?

2021-10-14

Finding a reliable supplier is the most crucial part of sourcing products from China. After you're satisfied with the sample and mass manufacturing begins, order monitoring through status updates and quality inspections are important. You'll also need to work out payment and shipping terms that reduce your risk and ensure timely deliveries.

Importing from China is not easy. On the one hand, there are fantastic opportunities for cheap custom manufacturing. On the other, finding the right supplier can be complex and time-consuming. Advance planning helps but think about whether you can handle all aspects of the sourcing journey on your own. Mistakes can be costly and leave a bitter taste in your mouth.

This post is for anyone new to sourcing products from China. It covers the key points of the typical import journey you can expect to trace as you set about doing business with the world's factory.

Diving into the supplier pool

Do you want to manufacture a custom product in China or buy a small commodity at a wholesale rate? Depending on your objective, you can work directly with a factory or place an order with a trading company. Here's how you can go about finding suppliers.

Custom manufacturing: Canton Fair and/or HKTDC events

The China Import and Export Fair or more commonly known as Canton Fair is held biannually in Guangzhou. It features more than 60,000 suppliers and attracts over 180,000 buyers. The expo happens over three phases, and lasts 10-15 days.

  • The first phase focuses on electronics and household appliances, vehicles and spare parts, lighting equipment, hardware and tools, building materials, chemical products, computer and communication products, energy resources and machinery.

  • The second phase is dedicated to consumer goods, gifts and home decorations.

  • The third phase focuses on textiles and garments, shoes, medicines, medical devices and health products, office supplies and food.

Research beforehand:

How do you source a product from China? Determine the product(s) you want to sell as opposed to visiting the Canton Fair to decide what you might want to sell.

Depending on the product(s) you're interested in sourcing, you can check out participating suppliers on the Canton Fair website. The point of attending the expo is to introduce yourself as a serious buyer to the suppliers you've already researched. It is also an opportunity to meet suppliers you haven't looked up but who have the expertise and experience you seek. You can have a 1-on-1 with them at the fair and even schedule a factory visit.

How to get there:

Apply for a business or tourist visa to Mainland China. It can take a few weeks to get the visa so apply in advance to avoid rush fees. Alternatively, you can come to Hong Kong and catch a high-speed train to Guangzhou. The fastest train will get you there in less than 50 minutes. UK nationals and buyers from about 170 countries don't need a visa to enter Hong Kong, so this may be a convenient route.

Before you apply for your visa, you will need to register for a free badge and get an invitation letter from the event organizer. The details are available on the Canton Fair website.

A few hotels can be found close to the trade fair complex but their room rates tend to run high. You will also find cheap hotel deals but make sure you read reviews first. If a friend or family member lives in a nearby district, see if you can stay with them or they can put you up in a nearby hotel. You can take a taxi to the expo or your host may be willing to drive you to the place.  

What to expect:

The Canton Fair pavilion is massive! Make sure you wear comfortable shoes and stay hydrated.

At the supplier booths, you'll usually find someone who can converse in English. You can even hire an interpreter at the fair.

Be prepared to negotiate on MOQs and prices. Suppliers are generally more attentive to buyers interested in placing larger orders. Very few will give you free samples, which you'll get only when you visit their factory.

Hong Kong Trade Development Council (HKTDC) trade expos

The HKTDC is a trade promotion organisation that holds a number of signature trade events each year, which are among the biggest in Asia and worldwide. It is also a supplier and product directory. The events calendar, visitor rules and badges are available on the HKTDC website.

Yiwu market

Yiwu is a wholesale market complex in Yiwu city in central Zhejiang. It is the world's largest small commodities market. Not the place to be if you're looking for custom manufacturing, but worth a look if want to buy something off-the-shelf in small quantities.

The wholesalers at the market are trading companies that cooperate with factories to fulfil orders. They charge a percentage commission on your total order value.

It is common for western buyers to hire an agent to show them around the market, negotiate prices and establish delivery terms. Yiwu agents do not offer quality inspection. Their job is to help you strike a deal and coordinate shipment. In contrast, a sourcing agent in China offers product sourcing, order monitoring, manufacturing control and quality inspection.

Networking with business contacts

Becoming an Amazon seller is a pretty big commitment. You may have gathered information and spoken to appropriate contacts about their import/Amazon selling experience. Those among them sourcing from China in a category that does not compete with your product may be able to connect you to suppliers or other useful contacts in the country.

Based on their guidance, you can reach out to suppliers or others who can put you in touch with factories. If your contact is on good terms with suppliers or wholesalers, you may receive special attention, other things like MOQs, price and interest in long-term relationships considered. So, it makes sense to keep this option open.

Online China supplier directories

When looking for China suppliers, your first instinct is to go online for the information. Thanks to the emergence of Alibaba, finding overseas suppliers has become easy. But sourcing products from China successfully is a sum of many things such as quality control, order monitoring and on-time shipments. Conducting business entirely online means you don't have visibility into your order. And unless your supplier is proactive about updating you on order status, you will have to keep chasing them every now and then.

So, while online China supplier directories like Alibaba, Made-in-China, Global Sources, DHgate and HKTDC are simple answers to 'how do I buy from Chinese manufacturers?', there's much more to the sourcing journey.

For example, how do you check the authenticity and quality of a supplier if you're only initially engaging with them online? Supplier directories can help to some extent. Alibaba allows you to filter suppliers by trade assurance suppliers (you're covered if your products don't meet quality standards or aren't shipped on time), gold suppliers (a premium membership for suppliers on the platform) and assessed suppliers (have been inspected on-site by a third-party inspection company).

But is the assurance of a refund enough? You will get your money back but have lost precious time. Just because a supplier has the means to pay for a $10,000 USD gold membership doesn't automatically mean that they can live up to your expectations. Assessed suppliers sound great but how can you be sure that your order will turn out how you want and what do you do if it doesn't?

This brings us to the next topic: reviewing suppliers. Never proceed to place your order with a supplier until you've evaluated the company.

Things to check for before working with a China supplier

When you rely on the internet or a China supplier directory to find a supplier, it is important to review the company before you sign a contract with them. Here's a look at the documents to request. You can even conduct a background check on a supplier who looks great on paper.

Essential documents that your China supplier should provide

A reliable China supplier will have no problem providing a copy of the documents you request.

Business license: All companies operating in Mainland China must be legally registered and possess a business license. This is a certificate containing a unique 18-digit business license number. The registration numbers never change.

Bank account certificate: Scamsters providing their personal bank account details or an offshore account for payment are not unheard of. Ask for the supplier's Mainland China bank account to make sure your money is going to their business account.

Foreign trade registration certificate: The document is necessary for the China supplier to engage in foreign trade. It is useful for verifying the company's operating English name and business address.

ISO 9000 certificate: You want a supplier with a certified quality management system. It contains information such as the certification number, name of company, standard number and revision year, and issue date and expiry date.

Customs registration certificate: This document is important to determine whether the company is registered to make customs declarations with China customs.

A note on quality checks for custom manufacturing

A product that complies with quality and safety standards in China may not necessarily meet UK, US, EU or overseas regulations. So, it's important to gauge the manufacturer's ability to make products that don't pose a safety hazard or increase quality risk in your market.

Choose a factory familiar with the technical, safety and chemical restrictions of western markets and capabilities to manufacture to applicable standards. This is particularly true if you deal in medical devices, toys or electronic gadgets.

If the documents and above check out, be sure to perform an audit by hiring an inspection service.

Contact numbers and factory photos

When using a supplier directory, check if suppliers have provided their contact information and go through their policies. Make sure that their physical address and landline number are provided. Be wary of suppliers who provide only their mobile phone number. It is possible to keep changing mobile phone numbers in China without any restrictions, which can make it difficult to trace scamsters.

When you send an expression of interest email to the supplier, request for photos of the factory and the production line. This is to ensure the factory has the machinery and tools to make your product.

Double-check their contact information in the email and details provided online or on the supplier directory. You can also request copies of essential documents at this stage. However, the supplier may not reply to your queries quickly. Based on your order quantities and whether you're a new or existing Amazon seller, the supplier may take their own time to get back to you.

A background check

It doesn't hurt to run a background check on your supplier, particularly if you're looking to place a large order with a single factory. For starters, do a Google or Bing search for [company name] + scam or [representative name] + scam, and see if anything comes up. If the supplier has scammed people in the past, it is quite possible that the search results may raise red flags.

Another way to verify supplier details provided online is to make a call to their landline number. You can even ask for their business license number just to be sure.

You can offload background check to a third-party authentication service. They help you determine whether the company is legitimately registered, and pull up their financial records and the names of their legal representatives and shareholders. Some may perform local language media searches for information such as customer reviews, lawsuits and complaints that may not come up in Google or Bing searches.

Customer references

When sourcing products from China, you may want to work with a factory that specializes in your product or at least has the capability to make it. You also want to ensure that the company has been in business for at least a few years. How else will they be familiar with Western standards, expectations and communication styles? And if the factory has been around for a while, it should also be able to provide customer references.

Say you'll perform a factory audit

A factory audit is the gold standard for determining the supplier's authenticity and production capability. You should hire an inspection company to perform the audit. Inform the company about the audit during your early interactions. If they refuse, make excuses or don't get back at all, you know they're not who they pretend to be.

How does the process work?

After you have selected a supplier, you can test them with a sample first. The process for custom manufacturing typically involves the following steps:

Sharing requirements: You send your concept or product drawings to the supplier. They make a prototype using laser cutting or 3D printing.

Reviewing sample: You review the sample and ask for changes, if any. At Maple Sourcing, we accept multiple iterations until you're satisfied with the prototype.

Send quote: You receive the quote for the mould cost and unit cost of the product. The moulds are then cut according to your specifications. You review the moulding samples and pass on your feedback, if any.

Mass production: You send us your purchase order. The factory begins to manufacture your product.

Production checks: In-process checks are recommended to ensure that your order is on schedule and made to your specifications. Our sourcing agent in China tracks and monitors your order.

Shipping: Free-on-board is the preferred option among Western buyers sourcing from China. You can hire a freight forwarder and have your agent oversee the delivery of your shipment. If you're sourcing from multiple suppliers, the orders can be consolidated into a single shipment.

Closing lines

Sourcing products from China isn't difficult so long as you have a clear idea of the path involved. You need to be heavily involved in the process and work to establish good relations with your supplier. Sometimes, despite your best efforts, you may not see the outcomes you want. It is also natural to feel anxious about how your order is coming along. Nobody wants to receive a shipment with many defective products.

Our sourcing agent in China can shoulder this responsibility and relieve you of your worries. We offer a turnkey service, from connecting you to the right supplier to sharing your feedback on samples, production checks, quality inspections, order monitoring and delivery.

As we're located close to your factory, one of our agents can monitor your order at the production site and intervene proactively if needed. We keep the factory on its toes so that your order isn't delayed or otherwise suffers quality compromises.

We're your one-stop solution to 'how do I buy from Chinese manufacturers?'. A sourcing agent is not an intermediary that works for factories. Rather, the company works in the best interests of you, the buyer. Learn more about how going through us can make your China sourcing journey smooth and successful. 

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