Products are your business’ lifeline, whether you are sourcing for the best offers to sell to your retail customers at wholesale, or you are looking for raw materials for your production chain. Quality, variety, and pricing are important considerations, and the best place to source for most products is in China.
China presently ranks among the largest global manufacturing hubs. From fashion apparel to electronics, you name it, and China probably offers it. It’s not surprising that even some of the world’s famous brands have set up camp in China.
What’s more, thanks to the country’s technological advancement as well as competitive business and supply chain, its products now compete favorably in the international market.
This article looks at seven tips to help you find success in sourcing for products from China. A lot of these tips are things you already apply in your business, except that your supplier is now half-way around the world.
1. Do Your Research
Do your due diligence and use common sense when you approach people and suppliers online to avoid fraudsters and scammers. You can start your comprehensive search at authoritative Chinese business directories such as Alibaba or Global Sources.
Business directories are excellent for high-volume, mass-market products, especially those that you can define into categories. However, they are not suitable for unique, one-off, or bespoke products. Also, just because a supplier features on one of these directories does not necessarily mean that they can deliver at your budget, on time, and at the expected quality.
After settling on a few suppliers, investigate their profile and background. Check their social media sites, LinkedIn profile, and company website. You can also Google their name to check for any news about them.
Next, chat with them through Hangouts, Skype, or WeChat (a popular Chinese social media and chat app). Check out their products through the webcam, if possible.
2. Meet Face-to-Face
Since its quite easy to fake company websites, profiles, and phone numbers, always insist on face-to-face meetings before agreeing on anything. If you can, meet your potential suppliers in person to determine whether they are sincere and trustworthy.
You can also meet suppliers in person during trade shows, which tend to have everything under one roof. Beware that not all trade show participants are manufacturers because some may be trading companies and may attract higher prices. Remember to schedule your visits and meetings to lower your costs sensibly.
3. Bargain and Banter
Bargaining over prices is not a common practice in developed nations, unlike the Chinese market. Therefore, you need to put your haggling hat on and negotiate as much as you can to get the best price. Remember not to concentrate solely on price at the expense of quality. Try and negotiate for lower prices in exchange for substantial or long-term orders.
4. Build Connections and Relationships
Focus on building strong relationships with your network of connections and suppliers that go far beyond the terms of a contract. The Chinese put a lot of emphasis on a hierarchy of relationships and connections, commonly referred to as “guanxi.”
Therefore, when doing business with the Chinese, give trust, dignity, and respect to their place in your network of relationships. As an outsider, you need to earn guanxi by putting effort into your new business relationships.
5. Hire a Sourcing Agent
If all this sounds overwhelming, then you may consider hiring a reputable Chinese sourcing agency to help you, especially if you are a small-sized business. Agents work for a fee and have ready suppliers and contacts at hand. They will handle most of the negotiations on your behalf and arrange for samples for you to inspect.
A sourcing agent can act as your supplier, supply chain manager, or sourcing consultant depending on how involved you wish to be in the entire process. Chick Sourcing is the go-to sourcing agent in Shenzhen with over ten years of trading experience.
6. Offer Value to Your Supplier
Always conduct all your business in a trustworthy manner to cultivate mutual trust and understanding with your Chinese suppliers. Don’t make unreasonable orders and demands that give rise to production issues and lead to delivery delays.
7. Quality Is Directly Proportional to Cost
Buyers across the world flock to China because their low manufacturing costs translate to lower prices compared to sourcing from elsewhere. Remember that all manufacturers have a price floor, which is the minimum cost of manufacturing products.
If you have done your research on the cost of raw materials, the Chinese market, and your target product, you will have a rough idea of the unit price. Therefore, pay special attention to suppliers who go way beyond their minimum price threshold because it will have a resultant effect elsewhere. It could affect the quality of the product, your reputation, or even have legal implications.
Wrap Up
These seven tips are just the starting point if you are inexperienced in sourcing from the Chinese market. If it’s your first time, it’s a good idea to hire a sourcing agent as you get acquainted with the ins and outs of doing business in China. Remember, whether you purchase products locally or from overseas, always use a purchase, order, and inventory management system that supports domestic and international trade.
