Many importers want to source goods from China and sell them in their own countries. Because lots of reliable factories in China can produce high-quality products at affordable prices. Importers can gain higher profits.
Today’s post shows detailed information about sourcing from China. Keep reading.
How to start sourcing from China?
Sourcing from China is the process of finding Chinese suppliers to obtain products for resale. Typically, it involves:
- Clarify the type of product you want
- Find and evaluate Chinese suppliers
- Balance prices & quality and control product quality
- Determine shipping terms and arrange logistics
Although these steps seem simple, they are actually quite challenging, especially for beginners who are likely to encounter many issues. In the following sections, I will explain the main aspects to focus on.
Clarify the type of product you want
When sourcing from China, you have a lot of options. Most of our clients will choose the following two common ways.
- Wholesaling existing products: You buy products in bulk and resell them to your customers, or label them with your own brand, which is a white-label business.
- Creating private label products: You can make adjustments to already-proven products on the market or make a new product, and then sell it to your customers.
I will introduce how to source products from China in these two ways.
Sourcing an existing product from China
You can directly find suppliers on Alibaba and similar Chinese wholesale websites. To find the best supplier on these platforms, you’d better compare several suppliers and ask them for quotations and samples. After receiving the samples, you can choose the best one to place the order. Then you can negotiate shipping incoterms with the supplier and arrange shipment.
Create your own product in China
If you want to create a new product and then sell it on your brand, it is a more complex process.
First of all, you need to understand what product you want. This is the most important prerequisite. If you have your own design draft or product spec sheet, you can send it directly to your supplier. If you only have a rough idea and the number you need is very small, like a few hundred, the factory will not accept your order.
So you’d better find a purchasing agent, like JingSourcing. With a professional design team and 10 years of product development experience, they can help you develop a new product from scratch, including product outlook, materials, techniques, etc.
The next step is to find suppliers who manufacture your product. You can either search for suppliers yourself or use a sourcing agent to help you. Once you have identified potential suppliers, request quotations and make samples. Compare them and choose the one you think is the most suitable to place a small trial order for testing. If OK, you can place a bulk order. The supplier will then begin mass production and arrange shipping according to the agreed terms.
Wholesale websites vs sourcing agents: what's the best choice?
Though you can find lots of suppliers on Chinese wholesale websites, most importers still choose sourcing agents to help them. Why?
By wholesale websites
Though there are countless suppliers on Chinese wholesale websites, it’s hard for you to know whom to work with. What’s more, 70% of suppliers on wholesale websites are actually trading companies, and are not all reliable. In many cases, you may spend a lot of time and effort and still not be able to find suitable suppliers.
In addition, the factories you find directly are more focused on production than service. If your product requirements are unclear, they will produce them based on previous experience and industry standards, which means that the product you receive may not meet your needs at all.
Moreover, suppliers on many wholesale websites have high MOQs, such as thousands of pieces. If you are not up to their requirements, and your product is too complicated and needs several factories to work together, they will reject you.
By sourcing company
Cooperating with an experienced China sourcing company can solve the above problems.
Here I take JingSourcing as an example. Located in Yiwu, the largest wholesale market in China, there are many factories around it. So they can integrate supplier resources here or even all over China, many of which you can not access on wholesale websites. This means that once you tell them your needs, whether it is an off-the-shelf product or a complex custom project, they can quickly find suitable suppliers with competitive prices for you.
As a professional sourcing company, they can deeply understand clients’ product needs and ideas. They customize products from the client’s perspective, greatly reducing communication costs. And compared with Alibaba, their MOQ and product price have more advantages, friendly to startups and small businesses.
Furthermore, they provide many other services, such as sample collection, production follow-up, quality control, customs clearance, and shipping. They can control the whole supply chain, which greatly improves your procurement efficiency.
Therefore, they are a better choice for importing from China, especially if you are:
- first-time buyers with little importation experience
- purchasers with customization requirements but low MOQ
- importers sourcing special/multiple product categories
Three tips when sourcing from China
Balance prices and quality
Although you can get huge profit margins from Chinese manufacturers, price should not be the only factor to consider. If your supplier offers a much lower price than others, he may cut corners on raw material quality, packaging, and other aspects. Remember that quality is directly proportional to cost. Your consumers won’t pay for your low-quality products. Given this, it’s important to balance both price and quality.
Arrange for product QC
Suppose you purchase products from China, and you are not satisfied after receiving the goods. You want to return them and make compensation, which is not a simple matter. Unlike buying things in your local country, the whole process will take a lot of time and effort.
Therefore, you’d better do a quality inspection before shipping. For unqualified products, you can immediately communicate with the factory and ask them to re-produce or compensate you.
Negotiate shipping terms
Based on our experience with clients, DDP and DDU are ideal for startups due to their simplicity.
DDP (Delivered Duty Paid)
The seller handles everything, including shipping, insurance, and import duties, and delivers the goods to the buyer’s location. The buyer just needs to receive the goods.
DDU (Delivered Duty Unpaid)
It’s also a door-to-door service. The seller will transport the goods to your location. They’ll assist you with all the import procedures. You need to handle clearing customs and pay import duties.
Read More: Common 11 shipping term knowledge hub.
How to find a good sourcing agent in China?
The best China sourcing agent is JingSourcing. They are the most reliable choice. Generally, good sourcing agents share common traits: specializing in specific products, being located near industry clusters, offering client referrals, and having years of sourcing experience.
What is the risk of sourcing from China?
Sourcing from China involves risks such as variable product quality due to diverse manufacturing standards, shipping delays or damages, concerns over intellectual property protection, and communication challenges arising from cultural and language differences.
