Contrary to the popular belief that China is the home of cheap and low-quality products, the high-quality products produced by many Chinese manufacturing units are competitive in any market. When starting a business, you can choose to produce your own products, buy them locally, or buy them from abroad. Sourcing products from China seems more daunting than the other two options, but it is also the one with the greatest profit potential. But dealing with the complex Chinese business system requires some preparation steps and strategies. You can overcome complexity and grow your business through a reasonable product sourcing strategy.
Before delving into how to source high-quality products from China, let us first take a look at why China has become the country of choice for sourcing products.
Why source products from China?
You will find a lot of opinions on why China is a hotbed of product sourcing. These opinions often carry personal biases. From a strategic and economic point of view, China offers many benefits that other economies cannot currently provide.
Cost: Cost is the main reason why many companies rely on products made in China. China has huge low-cost labor resources. The cost-effectiveness of this labor force is unparalleled. Other areas where you can save money by buying products from China are tools and molds, unit costs, packaging, design, and engineering functions. When sourcing products from China, you must also be cautious about the quality of the products you get. The Chinese market is flooded with inferior products designed with inferior materials. However, a little knowledge and understanding of your niche market will enable you to obtain high-quality finished products at a much lower cost than products produced anywhere else.
Eliminate middlemen: A safe way to increase revenue is to deliver products to customers at low prices without compromising quality. One way to achieve this goal is to minimize middlemen. Chinese manufacturers recognize this and deal directly with the companies they source from. China Daigou eliminates the role of an intermediary and directly deals with your business. In addition to the huge cost savings that benefit you, you can also better understand how sellers operate and how to get the best products from them.
Chinese supplier base: As we all know, the Chinese supplier base is one of the best in the world, even if it is not the best. China imports parts and materials from other countries and completes all assembly in China. No matter which industry you are engaged in textiles, electronics, automobiles, plastics, or toys, you will find many suppliers in China. Chinese factories are also connected to a strong infrastructure to facilitate the production and transportation of finished products and raw materials. China’s booming economy is the reason why there is such a vibrant supplier base there.
Reduce the risk of fraud: Procurement of products from China is done through a well-managed process. It reduces the risk of fraud in commercial transactions. Since you will be in direct contact with the supplier, you will understand what is happening at every step of the process. You can directly deal with late delivery, poor quality, fraudulent transactions, and other issues without any middleman. When you buy a product from China, you will have a better understanding of what is happening behind the scenes.
Expansion capabilities: efficient Chinese infrastructure and manufacturers with in-depth knowledge and understanding of the global supply chain can significantly expand production scale without additional trouble. You can increase production from hundreds to thousands in about a week. Most importantly, Chinese manufacturers allow lower minimum order quantities (MOQ). If you have a start-up company or small business, you can place small orders at a time and then expand as your business grows. This will be of great benefit to you. The time required to expand production will depend on the availability of raw materials and production time, but it will be better in China than anywhere else in the world.
No wonder China is often the first choice for corporate product procurement. The benefits listed above can take your business to a different level. If you want to grow and increase your income, sourcing products from China is a reliable choice. However, you should always be vigilant about the quality of the products you get. If the quality does not meet expectations, you will lose customers no matter what price you sell the product.
How to source high-quality products from China?
Sourcing products from China is definitely good for your business, but that doesn’t mean it is easy. You need a stable supply chain of high-quality products. In order to get the most value from sourcing products in China, you need to develop a sound business strategy before conducting a business transaction. Since China’s economy, culture, and people are often foreign to us, it is easy to make mistakes and bad deals. Just remember a few points, you can greatly reduce the chance of wrong transactions with Chinese manufacturers.
Types of manufacturers in China
Trading company: A trading company is a large factory that provides a large number of products. In order to be profitable, they will add additional costs to manufacturing costs. If you need a lower minimum order quantity, it is better to deal with the manufacturer rather than a trading company. It is worth noting that when dealing with trading companies, you will not be directly familiar with what is happening in the factory. For large orders of various products, they may be your first choice.
Wholesalers: Wholesalers usually deal with standardized products, and you cannot customize them as needed. Wholesalers usually have warehouses abroad to save transportation and storage costs. In order to make a profit, wholesalers have increased their profits on the basis of manufacturing costs. For emerging e-commerce companies, wholesalers may be a good choice.
Manufacturer: Dealing directly with the manufacturer is currently the most cost-effective option. The profit margin is higher than the profit you get from trading companies or wholesalers. The difficulty lies in effective communication with manufacturers because many manufacturers do not have front desk staff who can speak English. Many manufacturers have also been acquired by big companies like Alibaba, so it is difficult to find what you are looking for.
Now that we have distinguished the three ways you can get products from it, it is important to understand exactly how to prepare for sourcing products from China and the things to remember.
Do your research
It is imperative to study the market for products with high demand but low supply. In the Chinese manufacturing industry, you can grasp whatever you want. However, if the product you want to sell is already sold by an established company, it will be difficult for your business to develop. To stand out in a highly competitive market, your products and marketing must be unique. Check online to find out how to obtain these unique products from Chinese manufacturers and whether the total cost is profitable.
Search for suppliers online. It is a great starting point.
Methods To Find China Suppliers Online
Alibaba, Global Sources, and Made-in-China are the most popular product sourcing platforms in China. On these platforms, you will find various suppliers are marked as “Gold Member”, “Certified Supplier”, “Onsite Supplier”, “Certified Supplier”, etc. However, these labels do not guarantee the quality of the products they produce. This just means that the existence of these companies has been verified. Platforms like Global Sources will provide buyers with additional protection. Global Sources also released a report called China Procurement Report (CSR). These reports are a good source of information about your niche product suppliers, their reviews, performance, etc.
Negotiate
Chinese suppliers have received a large number of orders from all over the world. In order to get the best price, you must show your business ambitions, and if you like product samples, you plan to order in bulk. If your order quantity is not enough to bring the required revenue to the supplier, the price quoted to you will be higher than usual.
Visit supplier
If you can choose to visit China in person, you can get a lot of benefits by talking directly with the manufacturer. A visit will cost you time and money, but usually, you will negotiate with the supplier to get the best price at certain trade shows or after seeing the samples in person. If you plan to visit, please pay attention to Chinese social methods and maintain the necessary etiquette. It is wise to use an experienced Chinese purchasing agent. They can guide you through the entire process and can also manage the daily tasks of the supplier.
China has become a giant of the world economy. Purchasing products from China is a good way to take full advantage of this booming economy. It takes time and patience to maintain business relationships with Chinese suppliers. With strong interpersonal relationships, your business contacts will also be strengthened. Trade with Chinese suppliers needs to overcome language and geographic barriers, but the results are worthwhile. Market competition is becoming increasingly fierce. Once you decide that you want to grow your business, you should start researching immediately. Good research and close contact with suitable suppliers, coupled with the Chinese market, will immediately promote your business.
Union Source is a professional Chinese sourcing agency team that has been helping Western customers to manufacture and purchase products from low-cost regions since 2005.
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