From supplier research to placing a purchase order, here’s everything you need to know about China product sourcing
For many years, China sourcing has been the cornerstone of the eCommerce industry. With a variety of suppliers spread across the country, you can build a thriving business by accessing a wide range of products available at low prices. Whether you’re a newcomer or an established eComm brand, this China sourcing 101 guide is all that you need to get started and find reliable suppliers.
What is China sourcing?
China product sourcing is a strategy in which companies get their products from Chinese manufacturers and ship them to their warehouses abroad. It involves a wide range of processes, including factory research, supplier vetting, sampling, placing purchase orders, quality control, and much more. The term has become popular in recent years thanks to the rise of new eCommerce sellers who adopted the strategy of China sourcing to grow their business.
Benefits of China product sourcing
Sourcing from China brings a host of benefits for any business, especially eCommerce brands. Here are some benefits of getting your products from the ‘world’s factory’:
Variety of products: There is a Chinese factory for everything. Whether you’re looking for toy manufacturers, clothing suppliers, or any other product, you can source it from China.
Lower costs: Well, of course! China’s labor costs are low enough to allow manufacturing at affordable prices. What’s more, warehousing, transportation, and order fulfillment costs are also cheaper in China compared to other countries.
Large scale: China’s manufacturing capability is unbeatable. The country’s hundreds of millions of factory workers, combined with an advanced infrastructure, allow for a scale that can meet the demands of both large and small orders with remarkable efficiency.
Quality: The negative perception of quality in Chinese manufacturing is a thing of the past. Today, many of the world’s most advanced electronics, including the iPhone, are manufactured in China. The country’s factories have developed enough to meet stringent international standards and produce high-quality goods.
Production speed: China’s factories have become accustomed to tight deadlines and speedy production. In fact, some goods can be produced or boughtin a matter of weeks if not days!
A growing number of trusted sourcing companies: The growth in the country’s manufacturing sector has opened the door for a thriving ecosystem of Chinese sourcing companies and purchasing agents. Today, there is a myriad of trusted specialists who can navigate the complexities of product sourcing and help eComm brands get what they need.
Step-by-step guide for sourcing from China
Whether you’re planning to source by yourself or work with a China sourcing company, these steps will provide you with everything you need to get started.
- Research to find the best Chinese suppliers
It all starts with research. After you decide what products you need, you can look for suppliers through China sourcing websites. These websites provide you with a diverse list of names from which you can source. Spend enough time finding reliable sourcing sites and learning the difference between them before looking for individual suppliers.
Keep in mind that not every name that pops in your search results are suppliers; they might be middlemen or wholesalers, which can charge higher prices.
- Hire a China buying agent or sourcing company
If you’re not an expert, many people can help with sourcing from China. Independent agents and specialized sourcing companies can help you find suppliers and support you throughout the process.
China sourcing companies, like Lansil Global, are based in China and often have a dedicated team of specialists who understand the market and have established connections with suppliers. They can save you time and money especially if you’re new to the industry.
- Verify the supplier
Supplier verification is an important step for buying products from China. After making a list of suppliers you’re considering, it’s time to verify their information and make sure they’re legit. Search for things like registration records, technical expertise, reviews on sourcing websites, and more.
You can cross-reference a supplier’s registration information through the local administrative government or the Local Administration for Market Regulation. There are plenty of third-party services that can help you better verify the supplier.
- Find the optimal balance between price and quality
Upon searching for your ideal supplier, you’ll find a wide range of prices for the same product. You should be aware of suppliers that offer prices way below market range, as they might be compromising on quality to save on costs. It’s better to do a thorough search for your product to learn about manufacturing costs. However, keep in mind that other factors can also affect pricing, including the order volume and production time.
- Request samples
Asking for samples is an essential part of the China sourcing process. No matter how complicated or simple your product is, a sample can provide valuable insights into the product’s quality, functionality, and adherence to your specifications. Never settle for just photos or videos!
- Place a purchase order
Now the time has come to place your order! Before finalizing the purchase, make sure you read the terms carefully and understand all the details. Check production time, price, and other fees related to your order. It’s a good idea to also double-check if you’re buying directly from the supplier and not a middleman.
In terms of payments, most China suppliers accept the conventional methods of bank transfers. If they offer you to pay through unknown platforms, or even in cryptocurrencies, you should consider this a red flag.
- Conduct quality checks
Quality control is now a standard procedure of any manufacturing process. However, the results aren’t always guaranteed to meet your specific standards without additional oversight. Chinese factories are known for their lack of quality control documentation, which presents another challenge.
Opt for a third-party quality control service that can check your products after production, or work closely with the factory to ensure that all quality standards are met.
- Find a shipping method
Now that your product has been successfully sourced and checked for quality, it’s time to find the best way for shipping. The first option is to bulk ship it to your warehouse by sea or air through a freight forwarder. The second method is direct China order fulfillment, where you keep some inventory in China and fulfill orders to ship them directly to your global customers.
Tips for successful China product sourcing
Here’s a list of tips and essentials to keep in mind when starting with China sourcing:
- Always negotiate with suppliers
There are plenty of tips to master China supplier negotiations. The most crucial strategy is to gain a thorough understanding of the market and your product, enabling you to negotiate from a position of strength. At the same time, you should keep note of China’s business culture and the way of communication, which is more contextual and focused on maintaining respect and harmony in relationships.
- Keep China’s holidays on your calendar
During China’s Spring Festival, over 470 million Chinese took trips or went on holiday – a third of the population! China is known for its long holidays in which factories often shut down or operate at reduced capacity. These holidays take place at different times every year depending on the lunar calendar.
Here’s a list of China holidays to be aware of:
- National Day (1 week): falls on the first week of October.
- Mid-Autumn Festival (3 days): takes place usually in September or October
- Chinese New Year (3 weeks): falls between January and February.
- Qingming Festival (3 days): falls on either April 4, 5, or 6 each year.
- Labour Day (1 day): Takes place on May 1.
- Dragon Boat Festival (3 days): Usually takes place during June.
- Enhance your MOQ strategy
Minimum order quantity (MOQ) is the minimum amount of product that a factory is willing to provide in a single order. For new brands that have lower order volume, you can apply some strategies to go around a supplier’s MOQ requirements. For instance, you can search for a single supplier in which you can source all your products, look for factories with a surplus inventory, and better anticipate demands to increase your order before the Peak Season.
- Build a rapport with your suppliers
Business (and personal) relationships are important in China. Building long-term connections with suppliers can lead to better communication, more favorable terms, and priority treatment.
Best Chinese cities for sourcing any product
With an area of 3.7 million square miles, China has a host of manufacturing hubs spread across the country. It’s recommended that you learn more about China’s manufacturing regions and their specialties to effectively source products.
Here are the best cities for China sourcing:
- Shenzhen: The city boasts a wide network of suppliers specializing in consumer electronics and other sectors.
- Guangzhou: Known as the “Canton City”, Guangzhou is among the top locations for sourcing cosmetics and jewelry.
- Dongguan: From toys to electronics, Dongguan is the city for all things sourcing, known for its outstanding manufacturing capabilities.
- Shantou: The city is responsible for half of China’s toy production, making it a prime destination for eCommerce brands specializing in selling toys.
- Zhejiang: Another great city for sourcing household items, textiles, and more.
Mistakes to avoid when sourcing products from China
Making mistakes during your first days of China sourcing is normal. To ensure your process is flawless, make sure to check this list of common pitfalls when sourcing:
- Focusing only on the price
Low prices often come with compromises. When a supplier offers you a cheap price that is much lower than market rates, something might be wrong. Some suppliers tend to cut corners to offer competitive prices, so it’s better to research your product and submit multiple quotes to compare and decide which one is best.
- Not verifying suppliers
Failure to verify suppliers can result in receiving substandard products, facing delays, or even not getting your order at all. With the increasing numbers of suppliers popping up online on sourcing websites, it’s important to stay vigilant and double-check all available information.
- Not asking for enough samples
If you ask for samples from only one supplier and that sample isn’t up to your expectations, you can easily search for another. But why waste time? Samples are often free or come at a low price to cover transportation costs. Therefore, it’s best to request samples from multiple suppliers, compare them, and decide which is best for you.
- Neglecting quality control
Having quality issues can negatively affect your business. Low defect rates can lead to more returns, hurt brand reputation, cause shipment delays, and push customers away. Some sourcing companies like Lansil Global eliminate this problem by having an in-house quality control team to check products after factories and before they leave China, reducing the risk of issues down the line.
- Using ‘Made in PRC’ for products in the US
‘Made in PRC’ is a Country of Origin label and a vague way to say ‘Made in China’. While the label has been growing in popularity in some countries, it’s not legal in all countries. The US, for instance, restricts the use of ‘Made in PRC’ on products sourced from China and requires the country of origin to clearly state China.
- Doing everything on your own
Whether you’re a seasoned sourcing pro or a newcomer, doing this complicated process on your own can be time-consuming and overwhelming. From supplier research and communications to checking samples and finalizing terms, sourcing is best handled by experts. China sourcing companies or buying agents often have years of experience dealing with suppliers, helping you secure better prices than if you were to go do it on your own.
China sourcing company vs buying agent: Which is best?
China buying or sourcing agents are independent specialists who help businesses find suppliers in China and buy products. In contrast, a sourcing company often has a team of industry specialists and buying agents who work together and have a much wider network of suppliers.
While sourcing agents tend to charge lower fees, they’re not recommended for those who have regular sourcing orders. While charging a bit higher than agents, China sourcing companies are usually able to secure better prices thanks to their long-term connections and their customers’ high order volume. In addition, sourcing companies can offer additional services that you might need, such as trademark filing, order fulfillment, in-house quality control, and more.
Skip the hassle of China sourcing with Lansil Global
If you’re an eCommerce brand or planning to start one, you understand the importance of having a unique product to stand out in this competitive market. Sourcing the best product is an essential pillar for a successful business, and at Lansil Global, we bring you the best of China with our team of sourcing specialists.
Here’s a glimpse of what we offer:
- A network of 2,000+ suppliers specializing in a variety of products.
- Ability to secure better prices.
- In-house quality control team.
- Shenzhen-based warehouse close to manufacturing hubs and trade lanes.
- A wide range of additional services to handle your supply chain.
Too good to be true? Submit a quote today and connect with our experts to see yourself! – https://www.lansilglobal.com/contact-sales
