Sourcing products from China has many advantages.  However, finding the right supplier, negotiating, and striking a good deal can take time. Most of the suppliers often face many problems while looking for suppliers or after doing business with suppliers, the products delivered do not meet the specifications and are of poor quality.

Understanding the Chinese market and how to deal with suppliers requires a lot of experience, which is why you need all the help you can get. This article will outline some best practices, tips, and everything you need to know to help you source products effectively in China.

1. What is China sourcing?

Procurement is when you find suppliers to help you provide the best quality goods or services for your business. Likewise, China 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 varying levels of experience in your industry.

For example, if you are a small business owner, you may need some Chinese suppliers, while a large enterprise may need a Chinese sourcing company.

China sourcing

2. Why purchase products in China?

China is one of the countries with the largest trade volume in the world, and its supply chain can serve companies of all sizes. It is possible for them to produce, maintain, and distribute a wide variety of products. Therefore, sourcing products in China is already a good idea. But there’s more.

You should also consider sourcing in China for the following reasons:

  • Supplier Selection: There are dozens of suppliers to choose from in China. So, depending on the size of your business, you can choose a provider that suits your budget.
  • Quality Products at Affordable Prices: Since there are a variety of suppliers available in the market, you can look for those that offer affordable prices and high-quality products.
  • Cheap Labor Costs: If you are looking for skilled labor at low and reasonable prices, China is definitely a place to consider. As a country with a large population, one of the factors that affects product sales is labor costs.

3. A step-by-step guide to sourcing in China

If you want to source products from China, you may find it challenging. This process is often time-consuming and complicated, 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 simplify the process.

1) Take the time to find suppliers

If this is your first time purchasing from China, your first option may be to do a quick Google search. There are many websites that allow you to connect with suppliers, such as Alibaba, Made in China, Toopus, etc.

However, it can be difficult to tell the difference between a dealer and a manufacturer online, so you need to choose carefully. Sites like the aforementioned Alibaba can help you filter manufacturers during your search. These platforms have a feature that rates different suppliers and manufacturers across China.

It’s best to remember that these ratings may not be reliable, as any supplier who pays for Alibaba Premium membership can receive a Gold Supplier rating. Therefore, you need to take the time to search and do additional checks to make sure you find the perfect supplier.

Pro Tip: When you are offering a product that has technical requirements, it is best to choose the manufacturer as you can source directly from them.

China sourcing

2) Hire a purchasing agent

For those sourcing in China for the first time and willing to spend some money, hiring a sourcing agent may be a convenient option, especially if you want to buy products with technical specifications.  Again, this is a convenient option if you want to stay anywhere rather than travel to China for factories and quality inspections.

Your purchasing agent will take care of all of this. Other benefits include having an experienced agent who can speak the local language and negotiate with suppliers on your behalf.

Companies like Toopus have a great reputation for sourcing products for businesses, saving them time and money and making the entire process extremely smooth. Finally, when you use a purchasing agent, you are significantly less likely to be scammed or become a victim of fraud.

3) Conduct supplier verification checks

Once you have compiled a list of suppliers based on their experience, you need to verify this information. Things to verify include whether the supplier is a factory or a middleman and whether they have the previous technical expertise and the ability to produce the products you need.

You can verify this information by checking your supplier’s VAT invoice, audited account, or factory registration record. Call the supplier and ask for their registration and business license numbers.

While this isn’t always the case, it’s usually a red flag if your provider doesn’t have a landline number and only operates from a mobile phone number. Let’s say your supplier fails to provide a business license or company registration number.

In this case, you should avoid doing business with them. All registration numbers can be verified by the local administrative government or the local industrial and commercial bureau. Finally, it’s a good idea to ask for references from the vendor’s previous customers to verify their history and reliability.

4) Price and quality should be balanced

The biggest benefit of sourcing in China is that your costs are significantly reduced due to low manufacturing and labor costs. When negotiating prices with suppliers, you should remember that all suppliers have a general minimum cost to produce their products.

You need to research the cost and market price of the product to know what a reasonable price is. With this information, you can know that when the price you receive is lower than the market price, the quality of the product may not be the best.

Prices below the lowest market price or product cost should be a red flag because the supplier is compensating for something missing that you may not yet realize is missing. To protect yourself from such consequences, you should avoid working with suppliers who offer you prices that are too low.

China sourcing

5) Buy directly from suppliers

Eliminating the middleman and buying directly from the supplier gives you more control over the entire manufacturing process. Additionally, you avoid paying additional fees or commissions to agents or middlemen.

If you have the time and experience to conduct your own searches, communicate effectively with suppliers, and oversee the manufacturing process, you should consider doing so as it can significantly reduce your costs.

Additionally, communicating and buying directly from suppliers avoids the risk of miscommunication and delays in sending money to China because you no longer need to rely on them.

6) Communicate effectively with suppliers

The main challenge businesses face when sourcing from China is the lack of clear communication due to language barriers and cultural differences. As a result, most problems in dealing with suppliers arise from misunderstandings and miscommunication.

It may be worthwhile to hire a translator, as poor communication 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 verbally but should be recorded in writing in both languages.

You should also make sure to discuss the progress of the work so that all issues are addressed immediately and to ensure good communication.

7) Conduct quality control inspections

Regular quality checks are essential to ensure your products are manufactured correctly and quality is not compromised. Regular inspections of the manufacturing process ensure that things are not left to the last minute and that any issues that arise can be dealt with immediately, as issues are easier to fix during the manufacturing process than once the final product is made.

China sourcing

4. Tips to consider when sourcing in China

Now that you understand the steps you need to take when sourcing in China, it’s important to understand some important factors that will help you on your journey. Let’s delve deeper into each tip.

1) Always negotiate with suppliers

After you have taken the time to screen and find suppliers, you must begin negotiations. The goal is to create a situation in which both parties benefit.

Before negotiating, make sure you have all the data and information to present your case. This gives you a good reason to refute the supplier’s claims and that you understand the situation.

Other important tips you should consider are:

  • Be confident when making transactions so that suppliers will also have confidence in you and your business
  • Don’t be afraid to say “no” to a supplier if the deal isn’t right
  • Always remember, there are better suppliers out there who can meet your requirements

2) Make sure to order samples

It’s always a good idea to order samples before placing a bulk order with a supplier. You don’t want to make a huge commitment and waste money without testing the final product.

As soon as you receive your first sample order, you should:

  • Inspect some units (to ensure consistent product quality levels)
  • Look out for any defects, damage, or any inferior components used.

If you’re not satisfied, you can request a second round of samples and make the necessary changes, or simply choose another supplier.

Other factors to consider when ordering your first round of staples include factory location, available payment methods, and delivery time.

3) Build professional relationships with your suppliers

Whether you order online or travel to China to meet with suppliers in person, you should always develop a professional relationship with them. There are many benefits to having an ongoing relationship with your suppliers, as they may be able to give you discounts and better deals.

Additionally, let’s say you’re looking for another supplier to manufacture a different product. If this is the case, they can introduce you to some reliable people through their network.

Recommendation: If you purchase online, be sure to use apps available in China such as WeChat, QQ, Momo, etc. to communicate with your suppliers.

China sourcing

5. Frequently Asked Questions

Below are answers to frequently asked questions about sourcing from China.

1) Why is China suitable for procurement?

Chinese suppliers have extensive manufacturing experience and know the ins and outs of the industry. Thanks to their unparalleled mastery of manufacturing nuances, they are able to produce high-quality products quickly and efficiently. Chinese suppliers also have access to the best and cheapest sources of high-quality raw materials. Due to their in-depth expertise in global supply chains, they are able to obtain the cheapest prices for raw materials. Therefore, they are able to provide customers with high-quality goods at an affordable cost while still making a profit.

2) Why do I need a quality control check?

Quality control checks are vital to the purchasing process as you need to ensure that the products you receive are of high quality and standard. Without quality control checks, you receive a defective or damaged product, or worse, it could be extremely dangerous. Ultimately, if your customers receive poor quality and delayed products, it can lead to reputational damage. Quality control inspections help identify any issues before your product is shipped, allowing you to work with your supplier to resolve them and avoid any potential problems.

3) Can you negotiate with Chinese suppliers?

Yes, you can negotiate with suppliers in China. This is a common practice in Chinese business culture, but it is also important to note that negotiations should be professional and respectful between all parties. Most Chinese suppliers tend to expect you to negotiate.

6. Conclusion

Be sure to keep these tips in mind when purchasing in China, especially if it’s your first time. As a beginner, you don’t want to be scammed or taken advantage of as this can severely impact your business. Taking your time during the entire process rather than rushing is your best option so you can carefully consider all the factors and make an informed decision about who and where to get your supplies.