A Guide to Sourcing Products from China

Up until not so long ago, many entrepreneurs believed the best way to grow their businesses fast and make big money was going West. That has, however, changed now, and the moment any young entrepreneur looks to expand their business, they’re immediately advised to head China. Sourcing and selling products from China can be very profitable when done right. But how do you do it? We have put together this ‘how to source products from China’ guide to help you with that.

The process of sourcing goods from China can be confusing and overwhelming, especially since the huge country has several manufacturers producing different items. Plus, the language barrier might be a significant challenge. However, whether you are an amateur eCommerce enthusiast, an expert entrepreneur, or anything in between, you can easily learn how to source the products you want and enjoy more profits. Sourcing goods from China may certainly seem a rather difficult thing to do, especially when you have no experience. But, as we will soon see, it is way simpler than it seems.

1. Three Reasons to Source Products from China

1.1 Incur low costs

The cost of product manufacturing in China is low, so finding a reliable supply of goods and services from the country is such an idea. Think about this: the hourly labor cost in China is estimated to be 5.5USD compared to 24.1USD in the U.S. Obviously when the cost of manufacturing is low, the products are more likely to bring you good profits.

1.2 Get good quality products

Contrary to the word out there, most products coming from China are, in fact, good quality products. The fact that they are cheap doesn’t necessarily mean that quality has been compromised. As mentioned earlier, there are many manufacturers in China, and because of the stiff competition in the market, most of them make a point of ensuring that their goods have superior quality.

1.3 Mind-bogging range

It doesn’t matter the kind of business you’re into or the kind of goods you want to source from China; they have it all for you. The Chinese have come up with a mind-boggling range of products that’ll leave you lost for words.

2. How to Source Products from China?

To successfully do product sourcing from China and grow your business, you must have a good strategy and avoid mistakes. Below, we provide the various steps that you should follow when looking to get products from Chinese suppliers.

2.1 Start with an In-depth Internet Search

The most cost-effective and easiest way to look for companies supplying the products you want is doing thorough market research on the internet through various search engines and B2B sourcing platforms. There are virtually thousands of China suppliers listed on various B2B platforms like Alibaba.com. You can easily streamline your search on the platforms and significantly increase the number of legitimate wholesale suppliers.

Sourcing-from-Alibaba.com_ — Search and Learn from Alibaba.com

For instance, most B2B online platforms have filter options, allowing you to filter results for entries like ‘verified supplier,’ accredited supplier,’ or ‘onsite supplier.’ Some of these platforms have also endorsed service provider lists, as well as supplier blacklists. Some offer special services that further protect the buyers. You might also want to look at the supplier reviews from customers. You don’t want to order products from a wholesale supplier with a poor track record.

When doing your research on the best possible China supplier, you will most likely find many ‘verified suppliers.’ Note that this term only means that the suppliers have been verified to exist, and it doesn’t necessarily mean that the quality of their products, production capability and reputation have been verified. Again, not all verified suppliers are manufacturers. Some are simply wholesalers and traders, so if you want to get the best price by sourcing from the manufacturer, you may want to do some more due diligence.

2.2 Use Social Media

Well, social media isn’t necessarily the best platform for identifying a Chinese wholesale supplier, but it is also a good place to start. Of the thousands of manufacturers and suppliers in China, only a few have a strong social media presence. However, platforms like Twitter, LinkedIn, and Facebook have always been a great source for customer feedback and reviews on potential suppliers.

On LinkedIn, for instance, there are many professional groups focused mainly on product sourcing from China. You can get very good information from such groups and end up linking up with a reputable and reliable supplier. Some of these groups include China Sourcing Group, China Sourcing, China Trade Group, and China Sourcing Forum. Again, some forums on various B2B platforms may offer you good tips on who the best suppliers are.

2.3 Attend Trade Shows

Attending a trade show might seem like a very grueling process, but it’s one of the best ways to find the best wholesale supplier in China. While most buyers complete business and transactions without attending any trade shows, some aspects of your business or the kind of business you are into may require face to face interactions with your potential suppliers.

By attending a trade show, you get the chance to evaluate the suppliers and understand whether or not they can offer you what you need.

Many trade shows are held in China every year. The Canton Trade Fair, the largest in China, happens in Guangzhou twice every year and attracts thousands of od suppliers, buyers, and a wide range of products.

Another large trade fair- The East China Fair- is held in Shanghai once every year. Many regional trade fairs held in China are often industry-specific. Google-search China Sourcing Fairs to find out specific fairs for the industry that interests you.

Note also that you don’t have to travel to China for a trade show. If you are in the U.S, for instance, trade shows there have a significant Chinese presence. The Las Vegas International Consumer Electronics Show, for example, has hundreds of Chinese participants. The only downside of such trade shows is that you will not get as many potential suppliers as you’d get in a Chinese trade show and, therefore, you could end up not getting the best deal.

2.4 Visit Wholesale Markets

Wholesale markets are similar to trade fairs, and they are trade fairs opening all year round. In the wholesale markets, you are able to find all kinds of products as well. There are many wholesale markets in China. For example, The Yiwu International Market, Guangzhou leather bags market, Guangzhou watches market, Guangzhou clothing market, Shenzhen electronics market, Foshan furniture market, Shantou toys wholesale center, etc.

In those different wholesale markets, buyers can start importing from a very small minimum ordering quantity. If you own a department store, wholesale markets allow you to buy all the products in one place. Even some of them may not be manufacturers, the price is still competitive when buying a small amount to start out.

2.5 Verify the Supplier

Assuming you have found and contacted a potential China supplier, the next important step would be verifying them. This is where you want to be sure they are really who they say they are, whether or not they exist in the first place, and if they can offer you the products you want, the way you want them. You have to do some adequate diligence here.

You can get as much information about the potential supplier from their website, but this is not always enough. You can do the verification in many other ways. For instance, you may check the supplier’s registration at a local government agency. You want to be sure the manufacturer is capable of producing the products you need, whether or not they are certified, as well as they have the right technology and communication skills to meet your quality, quantity, expectations, and delivery times.

You can also verify the supplier by looking at their financial statements. Request for audited statements done by a reputable accounting firm in China. This way, you’ll get some sense of the manufacturer’s assets, as well as a capital base, and determine whether or not you’d recover any losses should there arise any contractual dispute.

2.6 Buy Directly from Manufacturers

Once you have identified, vetted, and verified your supplier, you will have to choose between buying the products directly from them or through a commission-based B2B sourcing agent or a sourcing service provider. While buying directly will save you some money in case everything goes smoothly, it leaves you exposed to the very real risk of being scammed. Plus, you risk not getting back your money if the goods don’t turn out to be as good as you expected.

If you are looking to source a small number of goods from China, you may want to consider buying from a trader directly. Some of these traders not only supply you the products but also offer you a turnkey export solution. It will also save you all the hassle of trying to source and ship on your own. The cost will, however, be a little higher. This is because trading firms usually make margins on the products being sourced.

2.7 Consider using a Sourcing Agent

Unless you are 100% satisfied that everything is going to run smoothly, it is always advisable to seek help from a reputable commission-based sourcing company. An experienced sourcing agent knows exactly what to do and will do the job easily in the proper way. Many B2B sourcing platforms will help you identify the right China supplier for your industry, verify them for you, and facilitate communication between yourself and them. Plus, they don’t charge much; often, their fees range from 3% to 10% of the actual purchase price.

Note, however, that while a B2B sourcing company will help you with the heavy lifting, which, of course, includes the wholesale supplier identification and verification, you will still have to be closely involved in the entire wholesale sourcing and purchase transaction processes. You see, you are the buyer, and only you know exactly what kind of quality you are looking for. Not all sourcing agents have the right quality control measures in place and ways to ensure that all transactions are made cost-effectively. You also need to understand that there may be hidden commissions and charges between the Chinese wholesale suppliers and the sourcing agents. This is one of those things you need to ask before hiring a sourcing agent to do the job for you.

3. What Can a Sourcing Agent Do?

A commission-based sourcing agent or a sourcing service provider will make the entire product sourcing process from China way easier. They will offer you an array of services, including supplier identification and verification, price negotiation, quality control and management, warehousing and consolidation, supply management, shipment and logistics management, among other sourcing matters.

It should be stressed that while you will incur some extra cost when using either a commission-based sourcing agent or sourcing service provider, it is often the safest way to go, especially when you are making your first order. Their services are often time-saving and exceptional. Besides, you can always, opt-out and start buying directly after learning how things are done.

4. Why Choose Us as your Preferred B2B Sourcing Agent?

Over the years since our inception, we have grown stronger and stronger, and we have continued providing outstanding product sourcing services from China for our clients. It is no wonder our client base continues to grow by the day. We have managed to stand head-and-shoulder above all other sourcing firms in China because of we, among other things: