There are many benefits of sourcing your products in China. However, it may take time to find the right suppliers, negotiate, and secure a good deal.
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Most suppliers often face many issues when finding a supplier or after going into business with one, the product delivered did not match the specifications and was of poor quality.
It takes a lot of experience to understand the Chinese market and how to deal with suppliers which is why you need all the help you can get.
This article will outline some of the best practices, tips, and everything you need to know to help you source products in China effectively.
Sourcing is when you look for a supplier to help deliver you the best quality of goods or services for your business.
Similarly, Chinese sourcing is when you find quality goods and services with the help of local suppliers in China. Depending on the size of your business, importing goods from China may require many suppliers with different experiences for your industry.
For example, if you're a small business owner, you may require a few Chinese suppliers, whereas large enterprises may require a sourcing company in China.
China is one of the biggest countries that trade globally with supply chains that can serve businesses of all sizes. They can produce, maintain, and distribute products on a large scale.
For this reason, sourcing products in China would already be a good idea. But there's more.
Here are other reasons why you should consider sourcing in China:
If you're looking to source products from China, you might find it challenging. The process is often time-consuming and complex, but it doesn't have to be.
Let's take a look at a step-by-step guide to sourcing in China that can help you navigate the complexities and streamline the process.
If this is your first time sourcing in China, your first option might just be to do a quick google search.
There are many websites where you can get connected with suppliers such as Alibaba and Made in China.
However, it is not easy to distinguish between a reseller and a manufacturer online, so you need to choose carefully.
Websites like Alibaba mentioned earlier can help shortlist manufacturers during your search. These platforms have a feature where they rate different suppliers and manufacturers across China.
It would be best to keep in mind that these ratings might not be reliable as any supplier that pays for the Alibaba premium membership can get a gold supplier rating.
So, you need to take time with your search and conduct additional checks to ensure you have found the perfect supplier.
&#;&#; Pro Tip: It is better to choose a manufacturer when you supply products with technical requirements as you can source directly from them.
If you are sourcing in China for the first time and are willing to spend some money, hiring a sourcing agent might be a convenient option for you, especially if you are looking to acquire products with technical specifications.
Again, this is a convenient option if you want to stay wherever you are and not travel to China to conduct factory and quality inspections.
Your sourcing agent will take care of all of that.
Other benefits include having an experienced agent who can speak the language and negotiate with suppliers on your behalf.
Companies such as Lazpanda have a strong reputation for sourcing products for businesses, saving them time and money, and making the entire process extremely smooth.
Lastly, when you use a sourcing agent, you are far less likely to get scammed or be a victim of fraud.
After making a list of suppliers based on their experience, you will need to verify this information.
Things to verify include whether the suppliers are a factory or just a middleman and whether they have had the previous technical expertise and the ability to produce what you are looking for.
You can verify this information by examining the suppliers' VAT invoices, audited accounts, or the factory's registration records.
You can call the supplier and ask for their registration number and business license 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 using a mobile number.
Suppose your supplier fails to provide a business license or a company registration number.
In that case, you should avoid doing business with them.
All registration numbers can be verified by the local administrative government or the local Bureau of Industry Commerce.
Lastly, it would be best to ask for references from the supplier's previous clients to verify their history and reliability.
The biggest benefit of sourcing in China is that your cost is significantly reduced due to low manufacturing and labor costs.
When negotiating the price with your supplier, you should remember that all suppliers have a general minimum cost to manufacture the product.
Here is where you need to research the costs of the product and the market price to get a good idea of what a reasonable price is.
With this information, you can tell that when you are offered a price below the market price, the quality of the product may not be the best.
Going below the minimum market price or the product's cost price should be a red flag as the supplier is compensating for something missing that you might not have realized as yet.
To protect yourself from dealing with such consequences, you should avoid working with suppliers that offer you a price that is way too low.
Eliminating the middleman and buying directly from the supplier gives you more control of the entire manufacturing process.
Additionally, you also avoid paying extra fees or commissions to the agent or middleman.
If you have the time and experience to carry out your own search, effectively communicate with suppliers, and oversee the manufacturing process, this is something you should consider as it can significantly lower your costs.
Moreover, communicating and buying directly from suppliers avoids the risk of miscommunications and delays in sending money to China as you no longer have to rely on them.
The major challenge businesses face when sourcing in China is the lack of clear communication due to the language barrier and cultural differences.
Therefore, most of the issues in dealing with suppliers come from misunderstandings and miscommunication.
It may be worth hiring a translator as miscommunication can cause huge delays in delivery and production times, negatively impacting your business and its profit margins.
All technical details such as product specifications, technical requirements, and packaging guidelines should not be arranged orally and should be put in writing in both languages.
You should also make sure to discuss the progress of the work so all issues can be dealt with immediately and ensure that there is a good flow of communication.
Conducting regular quality inspections is crucial to ensuring that your product is made correctly and that its quality is not compromised.
Having a regular check on the manufacturing process ensures that things are not left to the last minute and that any issues that turn up are dealt with immediately as it's easier to fix problems during the manufacturing process than after the final product has been made.
Now that you know the steps you need to take when sourcing in China, it's important to understand some of the important factors, which will be beneficial to you in your journey.
Let's dive deeper into each tip.
After you have spent your time shortlisting and finding a supplier, you have to start negotiating. The goal is to create a situation where both parties benefit.
Before you negotiate, make sure you have all the data and information to present your case. This gives you strong reasons to refute your supplier's claim and that you're aware of the situation.
Other important tips you should consider are:
It is always a good idea to order samples before committing to one supplier and ordering in bulk. You don't want to make a huge commitment and waste money without testing the end product.
When you receive your first order of samples, you should:
If you are not satisfied, you can ask for a second round of samples with the necessary changes made or simply opt for another supplier.
Other factors to consider when ordering your first round of staples are the location of the factory, the payment methods available, and the time it takes to deliver.
Whether you are ordering online or physically going to China to meet your supplier, you should always build a professional relationship with them.
There are many benefits of having an ongoing relationship with your supplier as they may give you discounts and better deals.
Additionally, suppose you are looking for another supplier to manufacture a different product.
In that case, they can introduce you to some reliable ones using their network.
&#;Recommendation: If you are sourcing online, make sure to use applications available in China, such as WeChat, QQ, and Momo to communicate with your supplier.
It is important to keep these tips in mind when sourcing in China, especially if it is your first time.
As a beginner, you do not want to be scammed or taken advantage of, as it can severely impact your business.
Taking your time throughout the process and not rushing things is the best option as you can carefully consider all factors and make an informed decision regarding who and where to get your supply.
China is the world&#;s manufacturing hub, and it makes sense for western companies to take advantage of the highly competitive prices of suppliers in China. Chinese labor is cheap and abundant. However, additional factors enable low-cost Chinese products, including a solid business ecosystem, minimal regulatory procedures, and low taxes and duties.
As prices in the west continue to rise, suppliers in China provide ideal opportunities for western companies to buy and sell products at competitive prices, rather than increasing pricing on goods sourced outside China.
There are various established methods of finding Chinese suppliers: online research, networking with companies who successfully import from China, including importing from China to UK and visiting Chinese trade shows. In this section, we&#;ll look at these methods in-depth. You can also see how to import furniture from China.
How to Find Trusted Suppliers in China
The most straightforward option for Western companies looking for trusted suppliers in China is to begin online.
Online supplier hubs for wholesale China products include Alibaba, DH Gate, Global Sources, and Made In China. These sites are not niche-specific. Instead, they are general marketplaces offering a broad selection of products from independent suppliers who advertise on various platforms.
Each platform has procedures to promote its advertisers&#; honesty and reliability. We&#;ll use Alibaba as an example.
If you go to Feeds> Discover on Alibaba you will find verified companies and additional information: company profile, products, and production methods. Alibaba&#;s verified companies are third-party assessed.
In addition, there are Gold suppliers in China on Alibaba, which means that they have paid Alibaba accounts rather than free accounts, another indicator of reliability.
One low-cost, low-risk method of tracking down wholesale China products is to use Alibaba&#;s sister company Ali Express. Companies advertising on Alie Express will deliver small sample product quantities via Air Mail, saving time and enabling western companies to evaluate product quality and speed of supplier response.
Ultimately, there is no way of determining rock-solid reliability when buying from online Chinese sellers. Unfortunately, some Chinese suppliers contribute to a reputation for poor service and product quality in goods from China, so many Western companies do not consider online bulk purchasing to be appropriate.
How to Find Reliable Wholesale Suppliers in China
Word of mouth is one option when looking for reliable wholesale suppliers in China. If you have trusted industry contacts in your home country, ask which Chinese suppliers they recommend.
An online search in your niche can be helpful to get unsolicited testimonials that attest to the quality of Chinese suppliers.
A good sourcing agent will ensure that you find a reliable Chinese supplier. They have a wide range of contacts within China and will put you in touch with an honest and efficient company that will meet your production needs. For many companies, a sourcing agent is the best option to find reliable suppliers in China.
Are you looking for a supplier in China?
When evaluating wholesale options from suppliers in China, it&#;s best to focus on your industry, rather than conducting a broad search. In this section, we&#;ll investigate some of the most important niches related to China supplier wholesale.
To find wholesale suppliers in China, narrow your search within your industry. Usually, different Chinese provinces serve different niches. Here, I will describe the best purchasing practices for industry-specific niches.
Find China Manufacturers for Clothing
One of the most popular searches for western companies online is China manufacturers for clothing. Here we discuss your options for suppliers of clothes in China in-depth.
Seventy percent of China manufacturers for clothing are in the provinces of Zhejiang, Fujian, Guangdong, Shandong, and Jiangsu. China is the global industry leader in garment manufacturing, renowned for timely and cost-efficient clothing production.
If you are wondering how to find a manufacturer in China for clothing, online B2B marketplaces like Global Source and Made In China are good places to begin.
Suppliers of Clothes in China: Investigating your Competition
As clothing is such a popular industry, finding companies in your country who import from clothing suppliers in China is a good option. Look for companies that already sell similar clothes to those you plan to import and ask them if they can recommend any specific suppliers.
Use your Contacts to Find Out more about Suppliers of Clothes in China
If you already know clothing importers in your niche, they will be the best companies for you to approach for guidance and recommendations, so that you can find out more about suppliers of clothes in China.
Wholesalers in China: Working with Gym Equipment Suppliers
Chinese gym equipment manufacturing centers around China&#;s southeast coast in provinces like Jiangsu, Shanghai. Shandong, and Guangdong. Most gym equipment comes from China; western companies benefit from the knowledge and expertise of wholesalers in China for gym equipment production.
Find Chinese Suppliers for Gym Equipment
Gym equipment is a large and growing industry in China; there is no shortage of suppliers in China. Providing that you do due diligence in determining the best company for your products, there is less risk in partnering with gym equipment suppliers in China.
The Advantage of Well-Known Gym Equipment Suppliers
If you buy from established gym equipment suppliers, the chances of you getting scammed are minimized. Among the most successful gym equipment suppliers are Johnson, Impulse, Tanre, and WNQ.
Find Chinese Suppliers for Toys
About eighty percent of toys come from China. Most toy manufacturing in China is in Shantou City, Chenghai District, and Guangdong Province. The low production cost and the cheaper materials used for production make China wholesale suppliers popular with western countries for importing toys.
All toys for importation need a certified tracking label on the packaging or product; these should include
The name of the manufacturer
Toy production area and date
Batch or run numbers for the manufacturing process
Product source information
Toy consignments for children under 12 should include a Children&#;s Product Certificate. Testing is at a CPSC (Consumer Product Safety Commission)-approved laboratory.
Find Chinese Suppliers for Furniture
Over 50,000 furniture manufacturers in China account for over forty percent of the world&#;s furniture. In China, most furniture wholesalers in China are in the Yangtze River Delta and the Pearl River Delta regions.
Lecong Town is home to the Shunde Empire Furniture market and is the capital of furniture production in China.
China wholesale suppliers have a reputation for high-end furniture, but as with other wholesale China products, the quality varies; it is essential to find a company that understands your needs.
A signature Chinese style enables wooden furniture without glue, screws, or nails. This furniture is designed to last over 20 years but demands high raw material quality and expert supervision of product creation. Because of this, the best option is usually to employ a china furniture sourcing agent to oversee all aspects of production and importing.
Find Chinese Suppliers for Construction Material
The majority of industries now source their construction materials from China. The main provinces in China for construction materials are Jiangsu, Zhejiang, and Guangdong in the east. Qinghai, Tibet, and Ningxia are also buoyant construction sectors.
Amongst the materials for construction in China are stone, tiles, and bricks. Tu-mu is the combination of wood and earth, synonymous with construction throughout China&#;s history.
If you have found a promising building materials supplier in China, check that they have appropriate patents, trademarks, and safety certificates.
If the supplier is on AliExpress, you can order a low sample quantity for expedited delivery so the evaluation process will be straightforward.
Your potential China wholesale suppliers should have a sound and verifiable background within the industry. Check for reviews on the internet that affirm a reliable local and international reputation. There should be no problems with their monetary history.
As with other wholesale products from China, the complexities of importing from China soon mount up; it&#;s best to get a good sourcing agent to handle construction material import processes on your behalf.
Where and How to Find Suppliers in China
When investigating how to find suppliers in China, it pays to dig a little deeper for wholesale products from China than a basic internet search. Before you begin, ensure that you know what your initial requirements will be.
Define Product Specifications for China Supplier Wholesale
Regardless of the method you choose to find a China supplier wholesale, it&#;s crucial to define product specifications.
Using multiple channels to convey product specifications to a supplier will be unhelpful to your company and theirs. Avoid a mix of threads, Zoom calls, samples, and face-to-face meetings.
Instead, if you&#;re not buying products off the shelf and there is any degree of complexity to your product specifications, assemble a master document that contains all product specifications in one place.
The supplier&#;s designated sales assistant should also be able to translate the document into Chinese and convey the instructions clearly to the technicians and engineers assigned to manage the production of your goods.
Wholesalers in China: Source Providers
When a western company wants to source providers from China, it&#;s beneficial to choose direct, straightforward wholesalers in China to avoid complications and difficulties further down the line.
Trade Fairs and Events in China
Visiting trade fairs shows is a helpful method of finding wholesale products from China. Meeting companies is an excellent way for western companies to build relationships with potential suppliers in China. Unfortunately, governmental responses to Covid both in and outside China make trade show visits difficult.
Sourcing Agent
Sourcing agents make commissions on product orders by contacting various suppliers and finding the products you want to buy. The agent receives a commission on the supplier and buyer-created order.
There are additional benefits to using a sourcing agent in China rather than going it alone when buying wholesale products from China. They can also supervise the product creation process and undertake quality control checking.
Sourcing agents usually deal with multiple clients at once. It&#;s unusual for sourcing agents to investigate your company. They are most suited to off-the-shelf products sourced from one of the manufacturers they know.
As a result, sourcing agents may miss out on better deals. You will find it challenging to ascertain if they have done an appropriate amount of work to get the best deal for you.
Nevertheless, if your product needs are straightforward, a sourcing agent may well be the best choice for you.
Sourcing Company
If you plan to sell bespoke products requiring an in-depth production process with closely supervised quality control, a sourcing company will be better for your needs than a sourcing agent.
The downside is that you will pay more for a sourcing company. But if a sourcing agent isn&#;t the right choice for your needs, you may lose money in the long term.
A good sourcing company will provide:
Bilingual support to facilitate negotiation and communication
Access to high-standard Chinese suppliers
Genuine suppliers in China &#; no middle-men to dilute your profits
Constant production updates
Flexibility in shipping and supply options
First-class customer service
Improved return on investment
Optimization of production and fast delivery
Find out more about how smart sourcing can help your business.
Request a Quotation
A request for a quote, or RFQ, should only be sent when you are sure that you have included every element needed for your order. If your sourcing needs are straightforward, enclose a specification sheet with your RFQ. If the sourcing process is complex, you should supply a concise but detailed spec sheet with your RFQ. Send the RFQ via .
Share your spec sheet with relevant individuals within the Chinese company. You may have been dealing with an individual within the company up to this point. Remember to include every detail of the production process within your spec sheet. If you have given details on production to your contact via Zoom, , or , remember to include those details too.
To expedite your RFQ, ensure that the title is clear and relevant. The content of the should include the following details:
Product size and dimension
Initial and repeat order requirements
Manufacturing requirements
Material needs
Blueprints and pictures
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The more professional your RFQ presentation, the more seriously your supplier will take your order, and the better the response will be.
Include full company details at the end of your . Repeat the address and contact information, and consider including your company website link; this will help your get to the inbox. Many emails scant in personalized detail will end up in the spam folder.
Ensure that you don&#;t send identical quotation requests to different suppliers in China. Companies may receive multiple RFQs every day and will not respond to all of them. The best option is to create an RFQ template and tailor it to each company you approach.
Create a List of Potential Suppliers
Use the following methods to compile a list of potential suppliers in China for your company. Begin with a shortlist of companies and then undertake a process of elimination to determine suppliers in China that are unsuitable for your needs.
First search online. Check that each wholesale company on your shortlist has policies for damages and returns. Ensure that their website contains their contact information.
Search Google for [name of company] scam, which will help weed out unreliable companies from your list. Then look for reviews and references on sites like Alibaba and Global Sources. A general search for reviews for companies will also yield more information.
If a company has participated previously in Chinese trade shows, it&#;s a good sign of its reliability.
Ask for a sample. If you can get a good quality sample from the company, this is another sign that you&#;re dealing with a reliable company.
Can the supplier create the kind of products you want to source?
Does the business have an excellent reputation, or is it highly unreliable and approaching bankruptcy?
potential suppliers in China. A scammer will usually not provide legitimate information online about their business. It is customary for a fraudulent supplier to use a fake address and number. The only point of contact is often by a mobile number.
When you a Chinese supplier, ask for their business license number. Also, ask for the supplier&#;s landline number. There is no restriction on buying multiple mobile numbers in China. A landline is an indicator of legitimacy.
The preceding steps will narrow the shortlist of companies you plan to approach; this is where you can begin the more exacting task of verifying suppliers in China.
Verify your Chinese Suppliers
Once you have eliminated unsuitable or fraudulent Chinese suppliers, you should use more exacting methods of verifying the legitimacy of Chinese suppliers. A landline number is usually 12 digits, beginning with the 86 Chinese country code. The following two digits are the area code. Check the company&#;s location by ensuring that the area code corresponds with the address on their website.
Tell your potential suppliers in China that you would like to pick up samples from their address using your local agent. Offer to pay cash on delivery. If your supplier is legitimate, they will comply with your request.
Notify potential suppliers of your plans to conduct a factory audit before ordering. There&#;s no need to go to this expense; it is another process to eliminate fraudulent suppliers. Mention this early on in your communications with possible suppliers.
A request for a Chinese supplier&#;s bank reference letters will determine their level of credit worthiness. Also, ask for the details of previous customers for reference purposes so that you can contact them and ask about their experience and level of satisfaction with the supplier.
You can add to your list by contacting suppliers of similar products in your industry. Ask them if they can recommend any Chinese suppliers &#; many will be pleased to help.
Order a third-party background check from an authentication service like China Checkup.
Their credit report service has valuable information on Chinese suppliers. On China Checkup, you can access financial records from a company&#;s preceding three years of business and details of legal representation and shareholders. China Checkup caters mainly to companies outside China, making it easy for westerners to navigate and access the information they want.
Visiting a supplier is the best way to verify them. You can get to know the people in the organization and discuss all your product and processing needs with them after you&#;ve used the other methods detailed here to narrow down the suppliers in China you may wish to work with, or it will cost you a lot of money and time.
Be exact with the methods described here. You will ensure that you settle on a professional and reliable Chinese supplier.
Importing from wholesale suppliers in China is ideal for companies that want to reduce manufacturing costs and finished products due mainly to China&#;s low labor and material costs. Chinese suppliers specializing in customized product creation will help with new product designs. China is particularly suited to companies creating products in these industries:
Toys
Games
Gym Equipment
Furniture
Shoes
Clothing
Iron, steel, and plastic products
China&#;s manufacturing base, skilled workers, and in-depth industry experience make China a perfect place for cutting costs and expanding western businesses. However, the process can be complex and confusing. Here, we break down the steps to import from Chinese suppliers.
Product Sourcing
As the importer, it is your responsibility to ensure that your products comply with your country&#;s regulations. As a general rule, avoid the importation of these products:
Food products
Plants
Seeds
Animals
Tobacco and related products
Fireworks
Non-flame retardant products
Lighters
Fireworks
Drugs
Cosmetics
Medical devices
Precious metals
Animal furs
Trademarked and branded goods
Alcoholic drinks
Boats
Motor vehicles
Failing to comply with your country&#;s rules may result in hefty fines for your company.
Once you have decided on the products you want to import from China, you need to find a manufacturer rather than a middle-man, as an intermediary will decrease your profits. Some importers make an exception to this rule when importing cheap toys and electronics.
Negotiating with Chinese Suppliers
Rather than narrowing your options to one supplier at this point, it&#;s best to contact a few wholesalers in China and ask them for product samples. If you plan to import bespoke products from China, you won&#;t immediately get the exact product you want as samples; ask for similar products that will give you an idea of their manufacturing abilities and quality control standards.
Negotiation should result in a win-win scenario for you and your potential supplier. You are seeking to get low-cost goods and initiate long-term relationships.
Once you have narrowed down your search to one supplier, you need to get an agreement in place with the supplier.
Your supplier in China should agree to keep a bill of materials (a list of components with prices and sources) that you can access.
Ensure that your supplier has granted you intellectual property rights, which means that trademarks, patents, copyrights, and trade secrets are protected. Intellectual property rights are commonplace in other countries &#; less so with wholesalers in China.
Design
If you anticipate delays in the product creation process, it&#;s best to identify them in prototyping rather than mass manufacturing.
Ensure that during prototyping, product finishing levels are up to standard. Make sure that the retail packaging is appropriately sturdy. If a part needs replacing by an end user, ensure those parts are available.
The more complex a product design, the more likely it will need multiple prototypes. For complex hardware, insist on three prototypes.
Identify manufacturing milestones for bespoke products as follows:
Confirm that the design will be attractive to the target market.
Create drawings detailing work in progress and finished product.
Identify a similar product and confirm that it is successful and in high demand.
Confirm that the product functions successfully.
Employ a third party to perform product certification.
Allow for delays in the design process, and build them into your schedule. Even with careful planning with wholesale suppliers in China, some delays in the product creation process can occur.
Payment and Deposit
The standard payment to suppliers in China is 30% in advance, with the balance paid on completion, usually before shipment. Payment upfront will disincentivize the supplier from delivering in full, on time, and to the high standards stipulated. Initial part-payment will help you avoid payment fraud which is unfortunately common in China.
There are multiple payment options; each has its advantages and disadvantages.
Telegraphic Transfer / Bank Transfer
All Chinese suppliers accept telegraphic transfers, but you must pay a standard fee for every transaction.
Bank exchange rates are usually poor. An alternative is the negotiation of a decreased transfer rate with your bank. Or, decide with your supplier who will pay the bank fees and include the adjustments within your contract manufacturing.
Letter of Credit
A letter of credit for supplier China wholesale is suitable for large orders and offers protection to western companies. A letter of credit negates the necessity of a deposit payment because the payment doesn&#;t get made until your supplier meets the goods delivery deadline.
If there is a delay, you have the right to determine whether or not the transaction progresses. You have the right to cancel the letter of credit, which incentivizes your supplier to deliver on time.
The disadvantage with a letter of credit is the excessive paperwork involved in the process.
PayPal
Paypal is suitable for small orders and samples for supplier China wholesale. Their standard fees are high and prohibitive to Chinese suppliers, who need a third-party service to move the Paypal payment into their account. There are also additional commissions for balance conversion payments.
Chinese Currency
Paying your supplier in Chinese currency (Yuan/Renminbi) often results in an improved exchange rate and is fast and straightforward. However, there may be fluctuations in the exchange rate; also, payment acceptance in China is restricted with this method.
Western Union
Western Union is used for sending money to individuals worldwide but is best avoided by companies because it involves high charges and little payment protection.
Escrow
With Escrow, a third party holds payment until the seller agrees to predetermined conditions to be met by the supplier. When the conditions are met the payment is released.
The supplier is also protected because payment occurs when the agreed conditions are met. However, this is not a popular payment method with suppliers in China because they don&#;t receive any upfront payment.
Lead Times
There are notable benefits of short lead times. It makes sales forecasting easier, responding to market changes is more straightforward, and there is less likelihood of goods running out of stock.
The challenge for western companies is lead time reduction from suppliers in China without sacrificing quality.
Building a relationship with your supplier will encourage them to prioritize your orders.
Be aware of where your supplier buys components. If there are delays with component deliveries, have an alternative supplier ready as an alternative.
Reduce your order sizes, as this can overwhelm your supplier. Instead, increase order regularity. It may cost more with price-based order size but offset that with the advantages of increased supply predictability.
Using enterprise resource planning (ERP) software may streamline your supply chain and reduce lead times, so it&#;s well worth considering.
Price per Unit
When negotiating price per unit, don&#;t immediately settle on prices dependent on a fixed order quantity. No matter how much you plan for smooth order processes, there will inevitably be trial and error. Instead, negotiate pricing tier quantities. You may find that you and your supplier are more comfortable with a change in order quantities.
When negotiating tier quantities, try to increase price differentials. For example, if you only get incremental 5% discounts per tier, tell your prospective supplier that their quote is disappointing and you had hoped for better prices for large quantities. In the negotiation stage, this is perfectly acceptable.
You&#;re more likely to get positive responses during negotiation if the supplier thinks you have a large business, whether you have or not.
To look like a large business, talk about your business team. Talk about your boss giving final permission for pricing decisions, and tell them your boss will visit the factory when he&#;s next in China.
Exaggerating business size is a standard business practice and shouldn&#;t be considered unethical.
Minimum Order Quantity (MOQ)
Chinese suppliers always observe MOQs (minimum order quantities), and no supplier is willing to send orders below an agreed threshold. Often these thresholds are high, which is part and parcel of Chinese companies supplying goods at low cost to westerners.
Chinese companies order raw materials for goods that are in turn subject to high MOQs. Goods destined for markets outside China need special certifications and may require components and materials that are higher quality than Chinese suppliers use for customers in their own country.
All these factors contribute to high MOQs.The exception to the rule is for sample quantities only.
Factory Inspections and Audits
Factory inspections are manufacturing facility assessments to assess quality control systems and production capabilities. The factory is usually out of 100, 100 being the maximum score.
The factory inspection should determine whether or not the factory is equipped to create your products if quality control standards are high and the machines they have for goods production.
Additional factory inspection results may include
Number of employees
Important customers
Number of highly skilled staff
Specialist products
Subcontractors
A list of machines
Hours of work
High volume production months
Subcontractors
Factory inspections don&#;t cover product quality, as they are usually made before order placement by a company.
Factory inspections don&#;t account for working conditions or environmental practices, which is where they differ from audits.
An audit is a neutral survey in which equipment and practices are assessed based on a supplier&#;s written procedures; the auditor often conducts interviews to confirm that their work experience and actions are as per the supplier&#;s written procedures.
For example, if the supplier has ISO certification then the auditor will look for proof that all processes, forms, and records meet ISO standards.
Sample Development
Sample development is the best way to test design viability. If poorly managed, the sample development process can take months or even years, so it&#;s essential to ensure an efficient sample development process.
Before product assembly, there must be a paper product plan. A supplier expects the following information before proceeding:
An ASI (Architectural Supplemental Information) or ISO (International Organization for Standardization) standard drawing.
CAD files
Product and component sizes
Color codes in either RAL or Pantone
Bill of materials
If anything is missing on the sample sheet, the sample will mimic the omission, so a complete sample overview is essential in the product plan.
Product regulations, standards, and restrictions must be conveyed to the supplier. Suppose the initial sample is deficient in any way that will be corrected in mass production. In that case, the company must insist that the supplier provides the relevant information related to the proposed correction.
Include packaging specifications such as artwork and packaging design files in Illustrator .ai format. If the product requires any additional labeling, be sure to specify your requirements, which may include:
FCC imprint
CE imprint
Warning label
Country of product creation
Serial number
Batch ID number
EAD code
Even when all the above is adhered to, it&#;s rare for initial bespoke sample products to meet required standards, so factor in more time for multiple sample creation.
Quality Control
Mass production is never infallible. Quality control is damage limitation; fault reduction rather than complete fault prevention.
Because goods can&#;t be returned to China by western companies, quality control is particularly vital when importing from China.
A quality inspector will
Photograph products
Take the product measurements
Inspect products for damage
Test products
Inspect product packaging
A day after the inspection, expect a PDF report of the collected data. Request videos if needed.
It is now your choice whether or not to accept the results and continue with the supplier.
Most quality control inspectors have online booking systems, so usually, an inspection is easy to organize.
Shipping
Shipping from China involves getting your finished order packed and loaded on a cargo ship that will sail to your home country; this means you must factor in the shipping cost and wait time. You must also be prepared to handle the goods after arrival in your country or employ a freight handler to assist you.
Depending on the size of the consignment, you can choose either FCL (full container load) or LCL (less than container load). LCL shipping is often set at low prices, as it&#;s not cost-effective for cargo ships to send out half-full shipping loads.
Other variables that affect cost are location and destination.
Shipping costs have increased dramatically due to governments&#; responses to Covid 19.
Finding and employing suppliers in China is a complex and involved process. An alternative is to a sourcing company. At Easy Imex we&#;ll handle the process of sourcing from a Chinese supplier for you.
If you need a sourcing company that will handle the sourcing process for you while you concentrate on running and growing your business, we&#;ll be happy to help.