Being a western country entrepreneur, it is difficult to find a decent supplier overseas. When you are sourcing products from China it gets more difficult because the country is not only a thousand miles away but a large number of people are unfamiliar with English speaking language. Moreover, Chinese laws, business practices, and culture are completely different from Western practices.
Sourcing goods from China is considered a common practice among international businesses. This is because products that are expensive in western countries are available at a one-third price in China. The labour cost in China is also extremely low and it is easy to find extra manpower during sudden bulk orders.
China has the second-largest economy and is the leading existing manufacturer in the world. Being the most influential manufacturing country, China's economy is increasing rapidly and sourcing things from China can be a good decision for business owners. Most international companies find hiring Chinese sourcing agents easier to establish a selling buying connection to flourish in the market.
To excel in the market, a company needs to sell a product that is good in quality and reasonable in price. The only way to keep the merchandise cost minimum with a better profit margin is to buy products directly from the supplier by eliminating middlemen. This is possible only when you source products from China. You can deal with the Chinese suppliers or manufacturers directly by hunting them properly or you can connect with the sourcing agent who deals directly with the manufacturers for your business. Sourcing agents don't work like middlemen, but they work like a part of your company by handling everything from raw material to logistics with the supplier.
When you add a third party to the decision-making process, it is often seen that thoughts and decisions collide. This cannot be beneficial for business owners as it welcomes new difficulties. However, when you source goods from China directly, everything is decided between the supplier and the business. The negotiation, demand, service fee, etc. are all decided between two parties without any discrepancies. When such a decision is made with direct dealings between two parties, the relationship continues for a longer-term.
When sourcing things from China, a business follows a well-planned process cutting down potential dangers that can be involved while dealing with suppliers internationally. Sourcing goods from China directly from a supplier means all processes, communication, and dealings are under your control which results in a lesser chance of fraudulent activities and timely deliveries.
Most suppliers are tied up with sourcing agents who take only bulk orders from businesses. This can be a trouble and challenging task for small businesses that require suppliers to meet minimum order requirements. This may not be a problem for large businesses that have enough capital to meet minimum order requirements. However, start-up companies have to struggle to arrange capital to meet a huge bulk order. Thus, sourcing products from China is better for small businesses to invest according to their capital available.
Suppliers in China are known to deliver wholesale products to any industry. China is called the manufacturing country globally which is growing rapidly. Chinese suppliers know that they have to deal with overseas clients so they groom themselves accordingly. Most suppliers learn English to communicate well with their business owners. By doing continuous business with international companies they understand the methodology, therefore they keep clarity, provide proper details and communicate correctly in all their business dealings to convince clients.
A business can increase its revenue and make a name in the competitive world by offering high-quality products at a reasonable rate. To maintain their brand image, businesses always have to monitor the quality of the product supplied. For this, a regular visit, inspection, and audit are required in the supplier's factory. Chinese law and suppliers give special provisions to business owners to visit their factory and check the quality of the product anytime during an audit. This helps business owners to confirm the legitimacy of the factory and their operating management system. At the same time, the supplier is always alert of being inspected anytime.
When you are doing business with suppliers overseas you have to abide by certain terms and conditions. Western countries prohibit business owners from checking the suppliers' working terms and conditions. This means you may not know what will be delivered until you receive the product. All you can do is sign a contract based on samples and wait. However, when sourcing from China, you can visit the factory in person and check their working environment. Therefore it doesn't matter if you are sourcing homeware from China or electronics, you get to select the right product and the appropriate factory that manufactures the product which meets your specifications.
Whether you are an expert entrepreneur or an e-commerce novice, there are many things that people learn when they source products from foreign countries. You may have a proper strategy and a good team that follows a layout that avoids mistakes and provides the best solution, but there are times when you can miss out on certain things because of overseas dealings. We have put down some best methods which should be used while sourcing products from China.
Before sourcing any Chinese product, you should learn about the market. Don't stick to one supplier, but find at least 2-3 suppliers so that you can check their products and then decide. Why compromise on quality when they don't compromise on price. A legal contract in international trade ensures that everything from order to supply chain management is written down and signed by both parties. This keeps everything transparent and there is no scope for fraudulent activities.
However, the market is full of scammers and frauds. It is not only in China but all other countries and it is difficult to handle such scammers from overseas. When you start contacting suppliers make sure you do your homework properly. The best way is to find out if they are licensed and under the regulated bodies in their nation. At least that will assure you that the factory will not close down at any point in time.
Google is the main search engine where people look for suppliers.
However Chinese suppliers are majorly found in Chinese business directories like Alibaba and Global Sources. Most online directories have a list of suppliers who provide mass-market products in high volume. This means, if you are looking for a unique product or bespoke product, then online directories have to be narrowed down and scrutinized further. For example, when you are sourcing homeware from China, you handle a huge category of appliances, and finding a supplier is easier, but when you are looking for a particular product in the homeware category you need to narrow down your search result for suppliers who work only on those defined categories.
Working with suppliers in China is like ‘trial and error’ dealing. They may make huge commitments, but that doesn't mean they can deliver a high-quality product on time and within budget. To find a suitable supplier with whom you can start a long term business, you need to experiment with at least a few suppliers in the beginning.
When you’re sourcing products from China, don't just stick to what they say but check their profile and business from your end as well. LinkedIn is a common social media platform that is allowed in China and other countries as well. A good Chinese manufacturer will develop a professional profile online to deal with international customers. If you get your hands on their company's website, then inspect it minutely. Professional websites will be organized and systematic with all licenses, accreditations, and certificates mentioned on them.
During the pandemic, it is difficult to travel International but businesses have not stopped dealing because of this. If you are unable to visit your Chinese supplier you can always get online with them on Skype or Google Hangouts for decent communication. Through a webcam, you can inspect the industrial power generator, chat with them about the product, check their samples online, etc. The way they communicate will give you an idea about the supplier.
If you want authentic and reliable suppliers from China, then visit Chinese trade shows. It takes quite a lot of money to set up canopies in trade shows which will be done only by authentic suppliers and dealers. One of the well-known trade fairs in China is the Canton Fair. You can talk directly with the suppliers at this fair and share contact details to continue the conversation later. These fairs have suppliers from every industry including electronics, consumer goods, clothing, cosmetics, medicines, automobiles, gifts, etc.
If you are unable to attend the Chinese trade fair you can still attend other fairs held around the world. However, the possibility of getting an appropriate Chinese supplier in these fairs may be less. This is because all Chinese suppliers do not travel around the world to attend trade fairs. Hence you don't need to get a product that meets your specifications. Either you compromise with the product or you start hunting again.
You should always keep in mind that with a lower price you might not get a decent quality. Large businesses and developed nations are not used to the bargaining trends and negotiations. Thus, it is wise to mention every clause in the legal contract so that there are no financial discrepancies among the suppliers and businesses in the future. Even if you have found the best supplier that delivers products based on the specifications, don't just stick to the price that they quote, but try your best to negotiate.
Now that you have found the right supplier after all searching online, calls, and emails, it's time to pick the best price for the work they deliver. Before making payment, send a message to know the delivery date and wait for the response. Once you receive your first package, inspect at least 10 units to check their quality and defects. Before making payment you should contact the factory and ask them to make changes to the product. If you simply ignore minute mistakes and make the payment the trend will continue and sometimes get worse.
Handling suppliers overseas can be a tedious task because every time you might not get time to visit the factory or inspect the product. This is why it is sensible to hire a sourcing agency for sourcing products from China. Instead of you handling everything and getting confused, a local Chinese sourcing agency will handle all dealings with the supplier which includes raw materials to supply chain management. A sourcing agent’s service fee is generally 5% to 10% of the whole order value, but sometimes depending upon the order size and price, the service fee drops to 3% also.
Chinese culture is a lot different from Western culture. If you are dealing with a Chinese supplier you should know that initially, you would not earn the respect or love that you get from other Western countries. Chinese pay a lot of emphasis on connections or relationships which is also known in their terms as ‘guanxi’. If you have to develop guanxi with Chinese suppliers, you will have to put a lot of effort into it. If you are not accustomed to mixing business and social life then Chinese suppliers may not be for you.
It is very easy to get in touch with fraudsters and scammers because they are continuously looking for bait online. To watch out bad apples, we recommend using the right sources to find dependable suppliers for long term business.
It is China's largest import/export fair which is held twice a year. The trade covers every physical product made in different industries. The fair is so huge that it runs in three stages
First stage deals with building materials, chemical products, machinery, and electronics.
The second stage consists of gifts, home decor, and consumer goods.
The third and final stage holds a fair for textiles, office supplies, medical devices and health products, shoes, and recreational products.
Suppliers and manufacturers holding canopies in Canton fair know they will be dealing with international businesses they find English-speaking representatives for their companies.
The advantage of attending a fair is that you can check the samples with your hands and get an idea of the quality they deliver.
If you like a product you can talk to the supplier on the spot and share contact numbers to talk in detail after the fair is over.
The Yiwu market is in Zhejiang where you can find 40,000 shops that source watches, accessories, bags, shoes, textiles at the lowest price. The majority of the market focuses on buyers in India, Africa, and the Middle East. Businesses from the EU and USA should remember that these products may not follow your country's safety standards and regulations. Thus, if you're looking for a high-end product like medical devices or cosmetics, you should look forward to the Canton Fair.
Whenever you search online for suppliers you don't need to get in touch with scammers. You can also find trustworthy suppliers and manufacturers on Chinese online directories like Alibaba, Global Sources, or Made in China. Remember, only good and professional businesses will spend money to promote themselves online. Through online directories, you can also check reviews, ratings for the company.
It is only a professional business that will make an effort to enlist them in Google My Business. Those who are listed in GMB are given special importance by the Google search engine to reflect them on the first page of the SEO. Once they are listed in GMB, Google inspects its ratings, reviews provided by customers and accordingly shows them in the results to other businesses. Thus, there are fewer chances that you will come across a scammer on a Google page.
Hiring a sourcing agent releases you from all the headaches of searching for a supplier, inspecting samples, auditing factories, negotiating prices, and checking the quality of the end product. Hiring a local sourcing agent will also benefit businesses overseas because they will not have to travel to suppliers every time during emergencies.
Nothing is as good as getting a reference from other businesses. This is because if a supplier is suggested by another business you can be sure that they are tried and tested. Of course, you will not ask your rival for references. Even suppliers know that they have been referred by their old businesses so they will maintain their reputation to increase their chain of networks.
It doesn't matter if you are sourcing items from China directly or through a sourcing agent, you still have to follow certain terms and regulations to receive a high-quality product at a decent price. Finding a reliable overseas supplier is not an easy task. It may take months and if you’re lucky you may find your supplier in weeks. So, be prepared to handle all hurdles patiently.