China sourcing agent

A Cost Down Guide for Product Sourcing in China

Cost down your product sourcing in China is half success of your importing business. As a first-time importer, you need to test your market first with smallest capital at beginning, and put your investment in more important things: marketing & sales. Below is a cost down guide summarized from my experiences of China sourcing business.

#1 Start with sourcing one product at a time

You can easily find many successfully proven cases that just start with one or handful products, and per the response of the market to decide the next step afterwards. Expanding a product line needs a single product to be proven at the beginning.

If you plan to start with a plenty of products, it will be required a lot of time and money to invest. That’s a hard and difficult path to go as a first-time importer or startup.

Investing in one product is a good option to cost down and lower risk for your first step of China sourcing journey.

#2 Find a professional supplier who specialized in your target product

If you focus on single category that you would like to put on a long-term consuming involvement, to work with a professional supplier instead of a vender who provides a vast range of products.

Do some research about the supplier to check if it’s a specialist in the field of your target product before you contact the supplier. And it’s unnecessary to care too much about if they are a factory or trader because a professional trader must have strong advantages of sources that allows them to provide you a still competitive price even lower than a factory.

So, find a specialist as your importing business partner to keep cost down constantly in the future.

#3 Always negotiate price with Chinese suppliers

Remember, anything is negotiable when you dealing with Chinese suppliers.

Thanks to internet, usually it’s easy to find so many suppliers for your products, so, feel free to ask for a lower price once you decide to work with them after compared with different suppliers.

But keep in mind, the seller is a person try to earn money (just like you) – always be respectful. Just don’t be too demanding to lose the quality. Once a Dubai businessman told me he placed an order at a price much lower than the market price, in my opinion, it’s even lower than manufacturing cost, guess what, the supplier disappeared after the deposit was paid!

#4 Try to keep your product design as simple as possible

In the aspect of design, less is more. It will generate a certain cost because most of new products require moulds (metal or plastic) to produce. In some cases, it would even cost more than your total product value. It will be a high risk to invest too much on a new project which is not proven by market. So, don’t pursue a too complex product on design.

You can go with existing product or just change a little about it, like color, material and packaging. Many experienced brands take this way to test the market as the first step of sourcing in China with a low cost.

#5 Consider to go with appropriate quantity

Try to reach manufacturer’s MOQ as possible as you can. Although it increases your total cost, but will significantly reduce your average product cost.

So, it’s important to consider a suitable quantity to cost down your sourcing result.

#6 Select shipping method by sea, not air

Shipping by air is quick but costly, only use it when you need to check samples, small trial runs, or urgent replenishment.

To cost down your product sourcing result, shipping by sea always is your first choice. 90% of trade is through sea shipping in the world. In many cases, shipping cost is only a few pennies for each product.

#7 Don’t expect the highest quality

You maybe hope your products are made of the best material and at the highest quality, but truth is that 80% of major retailers use normal standard materials which just meet the quality requirement of the market average.

It is profitable to import standard quality product; you only need to focus on better marketing skills. No need to chase highest quality unless your ideal product has generated sales by your target market.

#8 Go with simple packaging for your first time of product sourcing in China

It will consume lots of money and time if you attempt to chase a fancy packaging at the beginning. Don’t do that unless the unique selling point of your product is the packaging design.

Conclusion

Keeping cost down always should be the goal of your China product sourcing journey, however, it’s unnecessary to chase the perfect products at beginning, all above points could be improved along with time when your products generate sustainable revenue.