Best Ways to Source Wholesale Products from China

sourcing-in-china

Best Ways to Source Wholesale Products from China

As a progressive business owner or purchasing manager, one of your most important jobs is to source products and materials at the right price. This helps you remain competitive and protects your profit margins.With the emergence of China as an economic and industrial super-power, you’ve probably wondered, like many other business owners, if sourcing your products direct from the manufacturer in China is a worthwhile and viable option.

If you get it right, the rewards can be well worth the effort. If you get it wrong the consequences can be costly. Over the past ten years we’ve seen many businesses do very well from China. We’ve also see the others who weren’t so lucky.

Here are the important steps to source products from China.

1.Use an Independent Agent

It is possible to “go it alone” when sourcing products from China – if you’re prepared to visit the country yourself and spend time looking for suppliers you can trust. There are many risks associated with this approach – but it is possible.

The other option, and the one that most governments recommend, is to use an independent sourcing agent from the West, with local offices and staff in China. The key word here however is “independent” as there are many sales agents in China who pose as “independent” sourcing agents.

Most of these are ambitious, young Chinese people who become agents overnight and represent only a few carefully chosen manufacturers. This means that you’re not getting real value for money as your job is not being distributed to several suppliers for quotations.

It also makes it less likely that you’ll receive quality products, as this small group of manufacturers won’t be held accountable for quality in the same way as they would be with a proper “independent” sourcing agent.

read more about why use a sourcing agent in China?

2.Check the Agent’s Business Credentials

As with any new business relationship, when looking for an independent product sourcing agent for China, you should take time to check out their track record and their business credentials.

read more about what we should consider when choosing the sourcing agent.

3.Provide a Detailed Specification

It’s essential that you provide your agent and their manufacturers with a detailed specification for the product or materials you require. Having dealt with the Chinese for several years now, we’ve come to realise that they have a very different understanding of the word “detail” than we have in the West.

Unless you’re very clear about what you want, you’re sure to get something different. This can be a very time-consuming, costly and frustrating process if you have to spend weeks and perhaps months wrangling over details. So make sure you put everything down on paper.

If you’re currently manufacturing your own products, then send the manufacturer a sample of the product you require and ask them to copy it. Or ask them to copy it and make changes according to your new specification.

The more detail you can provide about the products or materials you require, the better. Provide detailed drawings if applicable. Write out in detail what you require from the product and what it’s to be used for.

Is it an original design which you own the rights to?

There are many cases of counterfeit goods coming from China and other places. Don’t get involved in the supply of counterfeit products as this is a criminal offence. A legitimate product sourcing agent will not get involved in sourcing counterfeit goods. If they do and get caught, their license would be revoked.

For raw materials such as steel, make sure you know and communicate what grade of steel you require. Explain to the agent what exactly the raw material will be used for. This reduces the risk of purchasing materials that are unsuitable of their intended purpose.

Here are some tips for communicating your requirement to the Chinese:
• Provide detailed drawings and plans for the product you require.
• Specify the exact materials you want your product made from.
• Use colour codes to specify colours.
• Send them a sample of the product you require. • Send photographs – if possible

4.Request an Exact Sample

If you decide to deal directly with a manufacturer in China, even when you do provide a detailed specification, it’s no guarantee that the manufacturer will give you what you want. That’s why it’s vitally important to request a sample of the product or raw material you require.

Quite often, the first sample they send you back won’t match your exact specification, so you’ll have to make a note of any issues, and relay them back to the manufacturer.

For the most part, when you return the sample to the manufacturer, they will adapt the product based on your feedback and then manufacture it correctly.

This will depend a lot on the experience of the manufacturer, their attention to detail and the value of your order. If they see you as a valuable source of new business, they’ll pay more attention to the detail. If you are a small business with small orders, they’ll probably drag their feet a little and not be as responsive as you would like.

Working with an independent agent however should eliminate any such issues. They will only work with reliable manufacturers who will deliver on their promises. Providing you with a sample product and fine-tuning the detail to suit your specification is the responsibility of the agent.

So always insist on a sample before you place an order. Take time to test the product out to make sure it works correctly or meets the requirements of the end user. Show it to your staff, and a select group of customers or prospects if possible – to get their opinions.

5.Consider an Independent Quality Inspection

If it’s your first time buying products or materials in China, then you may consider hiring an independent quality inspector to check them out before they leave the factory.

Once your products have been manufactured and are ready to be shipped, you can request that an independent quality inspector visits the factory to inspect your goods.

Your agent should be able to recommend a reliable firm of inspectors. There will be an extra charge for doing this but it could be money well spent. It depends on the nature of the goods you’re ordering, the value of the order and whether you’ve used this supplier before.

It is vitally important that you use a reputable and experienced firm of inspectors who will give a truly independent report on the quality of your goods. As you can imagine there is an opportunity here for dishonest inspectors and unscrupulous manufacturers to “do a deal”.

Warning – As the manufacturing industry in China continues to expand at a phenomenal rate, there are always hucksters out to make a quick buck – at the expense of the unsuspecting newbie. So be careful about who you hire and always use partners with verifiable credentials. Ask your agent to recommend inspectors they have used before.

6.Understand the Quality Controls

Even though it’s the agent’s responsibility to ensure proper quality controls are in place, it is still re-assuring for you as the client to understand the process they go through to ensure good quality products are delivered to you.

Learn 4 things to insist on from your agent.

7.Don’t Make Price the Primary Factor

As with anything in business or life, it isn’t always wise to make important buying decisions based on price alone, as what you end up with doesn’t always live up to your expectations. In fact, when it comes to sourcing products in China, we’ve found that it’s usually wise to avoid the cheapest.

New manufacturers are springing up all over China at an amazing rate. As with any competitive situation, the new entrants will always try undercut the established players, so they can gain a foothold in the market. While the more established manufacturers can produce your products to a high standard, many of the new ones simply won’t have the same attention to detail.

So when considering quotations and proposals, from different manufacturers, while price – is obviously important and one the main reasons for purchasing from China in the first place, don’t make price the primary factor in your final decision. Look instead for companies that are well-established focused on quality and serving other companies likes yours.

Summary

Sourcing products from China is a great opportunity for your business. You can have quality products and materials manufactured to the highest specification at a very attractive price. It’s the reason so many other businesses are looking at China as a way of becoming more competitive and profitable.

The problem of course is that China is a long way off should anything go wrong – which many business owners have discovered to their cost. For that reason, it only makes sense when sourcing products from China to do in partnership with an established and reliable product sourcing agency.

I hope this report has provided you with helpful tips and ideas for sourcing products and materials in China, and finding the right product sourcing agent. If you do decide to go it alone, I wish you every success.

If you need more help or if you would like to use the services of EC4U as an independent sourcing agent, then please send your email enquiry to info@ec4ulimited.com and we will do everything we can to help.

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