Step by Step Guide for Sourcing from China
Sourcing From China can be a daunting task, especially for small businesses and first-timers who might not have the means and global resources to establish full-scale overseas operations the way big businesses do. That’s where other sourcing tools come into play.
Here is a step-by-step guide that can help businesses like yours get an idea about the various options available out there in the market, and zero-in on the right suppliers to meet your sourcing needs.
1) Look for suppliers
Use various sourcing tools to get an overview of the options available in the market.
An internet search on sites like Alibaba, Google, etc. can generate great sourcing leads on reliable suppliers.
Sourcing magazines & trade shows are also vast sources of information on wholesale distributors, manufacturers and suppliers of products. While social media cannot be used in isolation to identify suppliers or for product sourcing, it can be very useful to get feedback on particular suppliers.
2) Short-list suppliers
Visiting a company personally is the best solution for verifying its authenticity, of course.
When that’s not logistically possible, turn to reputable third party QC companies that do a series of verification checks, such as due diligence, factory audit, etc.
Get samples from the suppliers, review the function, appearance and packages, do test at a lab when necessary. Compare the quality of samples from various suppliers.
3) Negotiate with suppliers
Once you have pinpointed the supplier you wish to deal with, then comes the need to negotiate a mutually-beneficial deal with the supplier. This would involve negotiating the price, payment terms, delivery schedule and contingency plans for unforeseen situations.
At this point, you could also make inquiries about drop-ship product services as these may be drop-ship suppliers as well.
Alternatively, there are local third-party sourcing agents who can represent your firm in all negotiations, easing the process for you. This ensures that there is no miscommunication due to language or cultural differences, and it also reduces the risk of unscrupulous suppliers taking you for a ride!
Common issues like packaging, shipping, taxes, payment terms, etc. should all be clearly spelled out at this stage to avoid later disputes.
4) Establish a long-term relationship with suppliers
Even in business, establishing a long-term personal relationship is very important to the Chinese; hence it should be to you too, to ensure that your sourcing is smooth & hassle-free over the long term.
The cultural, language and business expectations of the East and the West are vastly different and you need to respect these differences in order to maintain a healthy long-term relationship with your supplier.
While factory visits and product QC are key, building ‘Guanxi’ (a relationship) with your Chinese supplier takes personal time & commitment. But it will definitely be worth your while!