Good Practices for Sourcing from China
Here are some good step by step tips I learned from my experiences in import and export business.
Step 1: Confirm the Products
Before sourcing from China, you need to do your homework and decide the products you are after, then, you will need to focus on the main manufacturing areas in China. The supply chain at Yangtze River Delta area specializes on manufacturing small commodities, mechanical equipment, machining parts, auto parts, small tools, die casting parts, and sand-casting parts, however, manufacturers at Pearl River Delta area specializes on electronic products, plastic parts, stainless steel products and home appliances. A list of outsourcing products helps to find the right suppliers.
Step 2: Get the Forecast of Volume
Both the unit price and shipping cost depend on the volume. If you want to purchase products from China, you should match the requirement of Minimum Order Quantity (MOQ). Also, it is high cost per unit to ship the product by sea if the value of goods is less than 3000USD in total.
Step 3: Check the Port
No matter your delivery goods by sea or air, cost is always one of the important considerations to import goods from China. If you need to source various products, try to choose the suppliers close to same port, or at least the products with most QTY are close to the port.
Step 4: Find the Potential Suppliers in China
1. B2B sites in Chinese are useful to find suppliers in China.
2. Chinese search engines are also good ways to find manufacturers.
3. Trade shows are good to find China manufacturers.
4. Recommendations from friends, customers and suppliers.
5. Use a professional sourcing agent.
Step 5: Select Potential Suppliers
It is easy to discover hundreds of Chinese potential suppliers, but most of them are not the one your need, such as, the price is too high, the quality is too poor, the service is too bad. So, it’s necessary to do some surveys.
1. Do online background check for the potential suppliers, including the number of employees, registered capital, facilities, capacity, and reputation.
2. Ask suppliers for doing supplier self-assessment report.
3. Choose 2~3 factories as the final potential suppliers.
Step 6: Sign Non-disclosure Agreement
Non-Disclosure Agreement (NDA) is one of the most important agreement to be signed before giving suppliers any information about your products.
Step 7: Quote for the Best Possible Price
After getting everything ready, you can get quote from the 2~3 potential suppliers. Negotiate with them and get the best possible price.
Step 8: Maintain Ethical Practices
It’s important to ensure that suppliers are not employing underage workers or treating their employees poorly. It’s recommended to hiring a professional 3rdparty company to audit the factory before signing a contract, especially if you are looking for a strategic supplier and will place a large order.
Step 9: Visit Factories
Before spending money, it’s very important to visit suppliers, to verify the factory communications, manufacturing capability, production capacity, quality control system, and so on.
Step 10: Select the Manufacturers and Make Samples
After visiting the potential suppliers, we will select one of them for our customer’s project. It’s important to ask the supplier to make some samples for testing, as some Chinese suppliers do not use the correct material as defined on spec.
Step 11: Test on Trial Production Order
After clients approve the tooling and samples, we suggest clients running a trail order. In some case, the sample cannot say anything. For example, the supplier makes 10 samples and only 1 piece is OK, and then he ships that piece to you. So, running a trail order before mass production can give clients some assurance when importing products from China.
Step 12: Go to Mass Production Process
After trial production is approved, we will place a purchase order for mass production. In order to make sure clients get the best quality of products, we will do quality inspection at each step.