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How to Effectively Source Products from China?

2024-03-22
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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. Planning helps but think about whether you can handle all aspects of the sourcing journey on your own. Mistakes can be costly.

If you have never visited China and know little about this key economic superpower, finding reliable Chinese manufacturers may feel intimidating. 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.

How to find a reliable supplier in China?

1. Internet

Alibaba, Made in China, and Global Sources are the main B2B platforms that you can visit to discover thousands of suppliers. On Alibaba, for instance, you can search for Chinese manufacturers that specialize in mass-producing products in your niche. You can get in touch with them via live chat and send them messages for more information.

However, if you are completely new to the Chinese business landscape, you may want to look beyond Chinese B2B platforms. There are many key points to take care of, and if you don't have the requisite experience, you could miss out on something that matters and regret it. If you know businessmen from your community who come from China, you could ask them a few questions for more understanding on this complex topic. You may be able to learn certain important lessons from their experiences of dealing with Chinese manufacturers.

2. Trade fairs

One of the best ways of getting in touch with Chinese manufacturers is to visit a trade fair in China. Since this involves travel, this option is no doubt more expensive. Visiting a foreign country requires far more effort than surfing the web for information, but it will give you a more realistic idea of what to expect.

Visiting trade fairs in China will give you a good idea of why the country is known as the "world's factory". You will see for yourself a wide range of manufacturers and suppliers making all sorts of products that you can possibly imagine. Even global brands visit these fairs to find out about good suppliers that they can partner with.

The biggest trade fair in China is the Canton Fair. This mega trade event is orchestrated in Guangzhou, which was once known as Canton. The trade fair which is held in October and April (twice a year) attracts around 180,000 buyers worldwide and over 25,000 exhibitors. 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.

If you find yourself unable to travel to China, you can attend certain international trade shows held in the US. The National Hardware Show is held annually in Las Vegas and is a good place to find major Chinese manufacturers and suppliers. You can also visit the International Manufacturing Technology Show held at 2-year intervals in Chicago. Buyers and sellers from about 117 countries visit this trade show.

The one drawback of attending trade shows in the US is that you will not find as many factories as possible with similar shows held in China.

3. Wholesale markets

You can also visit wholes markets in China. Yiwu wholesale market is 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. Pls keep in mind that typically the wholesalers cannot provide quality inspection services, so you need to hire a local inspector to monitor the quality of each production batch.

4. Sourcing agents

If you are completely new to outsourcing and want to minimize your risks, you can collaborate with sourcing agents who specialize in finding manufacturers and suppliers for your niche. Sourcing agents can guide you through a step-by-step process for locating the most suitable manufacturers and suppliers so that you can source from China.

You can team up with reputable sourcing agents who have long experience in the Chinese trade scene. Consulting such experts may be the safest choice since you can capitalize on their knowledge, research, and experience to mitigate risks and maximize opportunities for product sourcing.

Sourcing agents can guide you through all necessary steps for product sourcing that will improve your chances of finding the right vendor. They can review your inquiries, request quotes from multiple suppliers, resolve any problems that transpire, assess factories in China, clearly convey your manufacturing requirements, oversee shipping, and conduct quality inspection. When you work with proven sourcing agents, you improve your prospects of finding the right supplier who will deliver goods on time and provide the highest quality products.

Since China is such a vast region, you should think of several smaller manufacturing areas. This way, you can find certain areas that specialize in providing your niche products at lower prices. Your sourcing agent can help you to pinpoint such areas.

How to shortlist Chinese manufacturers and suppliers?

Whether you do your own research or consult experts, you will likely have a long list of potential candidates for product sourcing. You will have to exclude certain suppliers from the list so that only the most suitable ones are left.

To start shortlisting, you can contact potential vendors, manufacturers, and suppliers to communicate your requirements. Specify parts and components that you need them to manufacture, and the processes required like plastic injection molding, metal stamping or die casting. State the minimum order quantity (MOQ) that is suitable for you.

If you need a prototype, you must find manufacturers willing to aid you in product development and prototyping. In China, relatively few manufacturers are willing to commit immense time, money, and effort to prototype and product development. Not only does this require a lot of work and resources, but there is also no clear indication or guarantee of good returns. This is a high-risk activity that could lead to losses. So not all manufacturers are willing to go along with product research, development, and prototyping. If you go this route, be ready for extra costs, delays, and plenty of tooling work.

When doing your research and sending out queries to potential suppliers, you can try making a different inbox to maintain communications with prospective manufacturers. You will likely keep receiving promotions and messages months after your send out your queries.

How to verify credentials for potential suppliers?

Verifying supplier credentials is paramount. You will be able to find plenty of information online. You may also be able to gather useful information via their correspondence. It is very important to ensure that the entity you are considering is an actual manufacturer and not just a middleman looking to make a fast buck at your expense.

You will also need to be sure that they have the technical expertise, capabilities, and production capacity for manufacturing goods you desire. Besides their business license, you can request certifications that they claim to possess as well as tax information. Ask them for factory audit reports. Also, it is vital to ask for a few samples so that you can get a realistic idea of what product quality will be like.

People with knowledge of China sourcing will recommend visiting manufacturing facilities before finalizing your choice of supplier. You can combine these factory visits with your business travel for trade shows in China. So, when you are visiting the Canton Trade Fair, for instance, you may also schedule your factory tours.

A factory audit is the gold standard for determining the supplier's authenticity and production capability. If you can't do all of this by your own, you should hire a QC agency 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.

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.

What are the essential documents that your China supplier should provide?

Business license: All companies operating in 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.

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

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.

How does the process of product sourcing 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 samples: You review the sample and ask for changes, if any. At Maple Sourcing, we accept multiple iterations until you're satisfied with the prototype.

Reviewing 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.

Conclusion

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 relationships with your suppliers. 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.

If you cannot work out all the processes by your own, you can hire a reliable sourcing agent in China who can shoulder the responsibility and relieve you of your worries. They usually 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.

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