Common Mistakes to Avoid for Sourcing from China
Chinese economy presents lucrative business opportunities for entrepreneurs in United States and other foreign markets. While there are some risks to sourcing goods from China, you can manage and reduce these risks with a smart and methodical approach. Below are the common mistakes to avoid for sourcing from China:
1. Failing to define a sourcing strategy.
When sourcing goods from China, you must have a well-defined sourcing strategy, this includes conducting proper due diligence about who you are dealing with, including intermediaries and manufacturers. You need to know what types of products you need, how much you can sell those products, how much you can afford to spend on those products, and by what date you need the products. You should also have a plan in place for quality control.
An experienced China sourcing agent can help you put together a strategy for sourcing goods in China.
2. Failing to define quality standards for suppliers.
Before you search for suppliers, you must have a general idea of the quality standards your company expects a supplier to meet. The better you define these standards, the easier it will be to determine whether your sourcing efforts are successful.
Once you have identified and defined your expectations of suppliers, you should only seriously consider those suppliers who are able to meet your needs. An experienced China sourcing agent will have existing relationships with suppliers and can help you determine whether certain suppliers are right for your company.
3. Treating international vendors like domestic vendors.
Many clients forget that sourcing from China isn’t like buying from a local supplier. You must plan ahead, take into consideration for production time, and the time it takes to ship your products by sea, which can take another 4-5 weeks, depending on your location.
4. Not getting things in written.
All negotiations between you and your supplier should be in written. Your contract should include important information such as the parties involved, QTY and price, definitions of product quality, production ready date, delivery expectations, and payment terms. It’s especially important to get all of the product specifications in written up front, including dimensions, tolerances, material requirements, and packaging.
An experienced China sourcing agent will be able to help you with all of this.
5. Language barriers.
It is very important to have someone on your China sourcing team who speaks Chinese. In cross-border transactions, you cannot depend on shoddy translation. Language barriers often result in failed business deals!
Find someone you can trust to communicate with suppliers on your behalf in Chinese, preferably a native speaker. A China sourcing agent who has proven experiences can help you overcome language barriers.