The Complete Guide on China Product Sourcing

There are many benefits to sourcing your products in China. However, finding the right supplier, and negotiating and closing a good deal can take a lot of time.

Understanding the Chinese market and how to deal with suppliers takes a lot of experience and time, which is why you need all the help you can get.

In this article, we will give you an overview of China Product Sourcing that will help you greatly.

Spend Time Looking for a Supplier

If this is your first time sourcing from China, your first option is probably a quick Google search. There are many websites that will put you in touch with suppliers such as Alibaba and Made in China. However, it can be difficult to distinguish between dealers and manufacturers online, so you need to be careful.

While choosing a distributor is a good option if you want to get a supply of toys or cheap electronics, it is better to choose a manufacturer when you are offering a product with technical requirements.

If you choose a manufacturer then it is best to take the time to find one and source your products directly from them.

The aforementioned sites like Alibaba can help you filter manufacturers during your search. Because these platforms have a feature, they rate different suppliers and manufacturers across China.

But it’s best to remember that these ratings can be unreliable, as any supplier who pays for Alibaba premium membership can get a gold supplier rating. Therefore, you should not simply rely on the ratings either.

You need to take the time to search and do additional checks to make sure you find the perfect supplier.

China Product Sourcing

Conduct Supplier Verification Checks

After listing the suppliers based on their experience, you will need to verify this information.

The main things to verify are whether the supplier is a factory or just an intermediary and whether they have the previous technical expertise and the ability to produce the product you are looking for.

You can verify this information by checking the supplier’s VAT invoice, audited accounts or the factory’s registration records. You can also call the supplier and ask for their registration number and business licence number.

While this is not always the case, it is often a red flag if your supplier does not have a landline number and only operates from a mobile phone number.

Suppose your supplier fails to provide a business licence or company registration number. In this case, you should avoid doing business with them.

All registration numbers can be verified by the local administration or local business bureau.

Finally, it is a good idea to ask for references from the supplier’s previous customers to verify their history and reliability.

Find a Balance Between Price & Quality

The biggest benefit of China Product Sourcing is that your costs will be significantly lower due to low manufacturing and labour costs. This is much cheaper than in other countries, which makes sourcing in China an attractive option.

When negotiating prices with your suppliers, you should bear in mind that all suppliers have a general minimum cost of manufacture.

Here you will need to research the cost of the product and the market price to understand what is a reasonable price.

With this information, you will know that when you are quoting below market price, the quality of the product may not be the best.

A price below the minimum market price or the cost price of the product should be a red flag, as the supplier is compensating for a shortfall that you may not yet be aware of.

To protect yourself from such consequences, you should avoid working with suppliers who offer you prices that are too low.

Buy Directly From Suppliers

Eliminating middlemen and buying directly from your suppliers gives you greater control over the entire manufacturing process.

In addition, you can avoid paying extra fees or commissions to agents or middlemen.

If you have the time and experience to conduct your own searches, communicate effectively with your suppliers and oversee the manufacturing process, then you should consider doing so as it can significantly reduce your costs.

In addition, communicating and buying directly from suppliers also avoids the risk of miscommunication and delays caused by any intermediaries.

Effectively Communicate with Your Suppliers

The main challenge companies face when sourcing in China is a lack of clear communication due to language barriers and cultural differences. As a result, most problems in dealing with suppliers stem from misunderstandings and miscommunication.

Hiring an interpreter is worthwhile as miscommunication can lead to huge delays in delivery and production times, which can have a negative impact on your business and its profitability.

All technical details, such as product specifications, technical requirements and packaging guidelines, should not be arranged verbally, but in writing in both languages.

You should also ensure that work in progress is discussed so that all issues can be dealt with immediately and to ensure smooth communication.

Conduct Quality Control Inspections

Carrying out regular quality checks is essential to ensure that your products are manufactured correctly and that their quality is not compromised.

Regularly checking the manufacturing process ensures that things don’t drag on until the last minute and that any problems that arise can be dealt with immediately, as it is easier to fix problems during the manufacturing process than after the final product has been made.

Always Negotiate with Suppliers

After spending time screening and searching for suppliers, you must begin negotiations.

Here, the goal is to create a situation that benefits both parties.

Before negotiating, make sure you have all the data and information you need to present your case.

This ensures that you know what you are talking about and gives you a strong case to counter the supplier’s statements.

Another important tip is to be very confident so that the supplier will also have confidence in you and your business.

Finally, you should not be afraid to say no to your suppliers.

Sometimes it is a good idea to put your foot down.

You can find a better supplier that meets your requirements, or your initial supplier will step back and agree to your terms because they don’t want to lose business either.

China Product Sourcing

Make Sure to Order Samples

After collecting various quotes from different suppliers, you can choose the best price for your budget.

It is a good idea to order samples before committing to one supplier and ordering in bulk. This is because you don’t want to make a huge commitment and waste money without seeing the final product.

When you receive your first sample order, you should check about 5 to 10 units to ensure that each product is of the same level of quality. You should also look out for any defects, damage and poor quality.

If you are not satisfied, you can ask for a second round of samples and make the necessary changes, or simply choose another supplier.

Build a Professional Relationship with Your Supplier

Whether you order online or travel to China to meet your suppliers in person, you should always build a professional relationship with them.

If you are purchasing online, make sure you communicate with your suppliers using an app available in China (WeChat).

There are many benefits to having an ongoing relationship with your supplier as they can offer you discounts and better deals.

In addition, if you are looking for another supplier to manufacture a different product. In this case, they can also introduce you to some reliable people.

Hire a China Product Sourcing Agent

If you are buying in China for the first time and are willing to spend some money, hiring a China Product Sourcing Agent may be a convenient option for you, especially if you want to get products with technical specifications.

Equally, if you want to stay anywhere rather than travel to China for factory and quality inspections, this is a convenient option.

Your purchasing agent will handle all of this.

Other benefits include having an experienced agent who speaks the local language and negotiates with suppliers on your behalf.

Companies such as Greentime have a reputation for sourcing products for businesses, saving time and money and making the process extremely smooth.

Finally, when you use a sourcing agent, you are far less likely to be scammed or become a victim of fraud.

 

If this is your first purchase, it is important to keep these tips in mind when China Product Sourcing. If you need a China sourcing agent, you can be confident in choosing our team – 

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