In this article, I’m going to show you the common mistakes that importers make when buying wholesale from China. This list of mistakes is gathered from our experience in serving more than 3,000 customers, and surprisingly, even the ones with 5-year importing experiences still fall victim to these common mistakes.
Let’s go ahead. We are going to list the mistakes one by one based on the process of buying wholesale from China as the following,
- Mistakes when choosing products
- Mistakes when selecting suppliers
- Mistakes when buying from Alibaba
- Mistakes when looking for and visiting suppliers in China
- Mistakes before massive production for your product
- Mistakes when communicating with Chinese suppliers
- Mistakes in paying suppliers
- Mistakes when shipping products from China
I’m also working on another article that introduced over 10 experts who have rich experience in China importing, manufacturing, drop shipping, Amazon selling, trade law, etc. They will share their experience with mistakes don’t make when importing from China. Please subscribe our blog to get first notification when it’s published.
Common Mistakes when Choosing Products
1. Always going after the fad
With perfect timing, there’s no doubt that you can rack up millions from the latest product fads. For instance, the hot item of 2016 through 2017, the widely popular fidget spinner helped two of my customers earn big money because their timing was right.
But as time passed, the decreasing popularity of fidget spinners bewildered these two customers. Now they are faced with the problem of deciding what new products to sell.
To nurture a long-term business, we do not suggest this speculative behavior. The timing for exploiting product fads is critical. Being either a little too early or a little too late makes a huge difference. But identifying the perfect timing is difficult to do for most of you. Therefore, focusing on products that would sustain a long-term business would be the wiser choice.
2. Never take your eyes off of the low-value products
There are a few problems with the low-value products that we can see:
- Fierce competition
- Low value-added
- Non-substantial profit caused by the shipping cost, though product price is low
Low-value-added potential, meaning any product enhancement will not increase its value. For example, the selling price of a cheap bottle opener will not significantly increase even if you put it in fancy packaging.
Besides, low-value products only seem cheap initially because the international shipping cost has not yet been taken into account. After doing a careful check, if there are already plenty of players in the field, consider stopping and giving a second thought to whether this business is suitable for you.
Back in 2017, one of my customers once checked out disposable food containers with us and sold them on Amazon. Indeed, it seemed like a good business, especially because the product price from China is just $ 0.75/piece. But there were already too many sellers selling the same product on Amazon. As a result, many of the food containers are still lying in his warehouse until now.
3. Thinking that highly consumed products equate to GOOD products
When talking about a good product imported from China, market demand is one of the main factors to be considered. This is definitely true.
Highly consumed products meet the criteria without a doubt. There were customers inquiring about the A4 printing paper. When they started selling some, they found out that it was not as easy to sell as expected.
Selling highly consumed products has had thousands of players sharing the cake. The profit is totally transparent. Moreover, they have been in this segment for a long time, they have already established their own stable sales channels for it. It is utterly a cut-throat competition.
4. Choosing large-sized products, thereby paying high shipping costs
For large products, take the dressing mirror as an example, shipping will cost even more than the product itself.
Aside from that, the probability of the product breaking must also be considered. If the product will be sold through Amazon, there will be an extra charge in terms of storage and handling fee. Same goes if you plan to store it at your own warehouse.
For someone who is just starting out, picking a product with lesser value compared to a higher shipping cost and which takes up bigger storage space, nobody will agree that it is a good choice.
Common Mistakes When Selecting Suppliers
5.Thinking that cooperating with a factory is the best solution
People who import from China prefer to buy direct from China factory. In their opinion, factories would offer more favorable prices than trading companies, thereby enabling them to gain better profits. We can’t say they are wrong, but it is also not right to limit yourself to factories while ignoring your business model and scale.
Especially when sourcing suppliers from Alibaba, it is not easy to identify which are real factories despite all the suppliers claiming to be one. But you don’t have to worry too much about differentiating between factories and trading companies. Instead, making a tradeoff between products, prices, and services are the key aspects that you should consider.
Personally, I believe that all the good suppliers similarly have the following characteristics:
- The right balance between quality and price
- The expertise of the supplier’s salesman
- Efficiency of communication
- Responsibility – Attitude towards problems and ways of solving them
Both trading companies and factories have their own advantages. Previously, I wrote two in-depth articles: nothing on Google will tell you the same things except me. You can check to learn more:
- 8 Powerful Principles to Find Reliable China Wholesale Suppliers
- 5 Types of Chinese Trading Companies. How to Choose The Best
6. Only choosing the supplier with the cheapest quote
Cheaper prices make importers palpitate with excitement. There always exists the cheapest prices in the market. Not daring to tell you not to choose the cheapest options, but you should at least be aware that the cheapest prices sometimes mean more problems.
Many smaller importers have experienced such situations. Some suppliers will lure you in with cheaper prices. But once you remit the deposit, some suppliers will raise the prices using a variety of excuses. What will you do? Ask for the money back? Impossible.
You will lose a lot of time arguing with such suppliers and only end up feeling tired. If you insist on not paying the extra money, they will adjust the product quality according to the prices. In the end, you will spend more money and energy than necessary.
My suggestion is, don’t take any chances. Seldom will you get good quality products with the cheapest prices in the business? You should choose a reasonable price as plan B. Once you find something unusual, please shift to plan B immediately.
Common Mistakes When Buying from Alibaba
7. Trusting “Alibaba gold supplier” too much
Some tutorials, online guides, or some, so-called, experienced importers may teach you to choose a “gold supplier” when sourcing products in Alibaba. They equate “gold” with “great” and think that the supplier would be wonderful.
In fact, most of the suppliers in Alibaba are gold suppliers. Surprised? “Gold supplier” refers only to a paid membership in Alibaba, which means that anyone can pay to get it. Therefore, “gold supplier” is never the standard of judging the quality of suppliers.
So you have to think about the suppliers from these aspects:
- Study the samples from the supplier.
- Never avoid any responsibilities once problems arise.
- Timely communication.
8. Trusting trade assurance too much
Many importers simply regard Ali trade assurance as to the third party e-payment (like PayPal). They believe that they could simply ask for the money back if they are not satisfied with the imported goods. Many of my clients once asked me the same questions by email. I will tell you the truth today.
It’s not that easy to get a refund from Alibaba suppliers. Trade assurance is not like PayPal which always protects the buyer’s interest. After all, we are talking about thousands of dollars or even more when placing an order on Alibaba.
Three powerful pieces of evidence are needed if you request refund due to quality issues:
- Sales contract
- Inspection report
- Lab testing report
Sometimes, it’s very hard to define what the problem with quality is, so disputes usually happen between customers and suppliers for weeks and even months. This means that you have to spend both money and time during the whole process of requesting the refund, in which case, you may have missed the best time for selling and all your previous efforts on this order are wasted.
I am not saying that trade assurance is useless for buyers. Instead, what I’m saying is that trade assurance is not 100% safe when choosing suppliers. Buyers should highly consider the supplier’s professional experience, communication efficiency, attitude towards problems, product’s quality, and, of course, the price.
Common Mistakes When Looking for and Visiting Suppliers in China
9. There are quite a few importers who won’t do any research about sourcing in China before coming to China.
Many foreigners still have some misunderstandings about China. When they talk about China, they will first think of Shanghai. There are some exhibitions in Shanghai, though, such as the China Beauty Expo (Shanghai), Shanghai International Cosmetics Packaging and Raw Materials Exhibition, etc.
Of course, there are also some local wholesale markets in Shanghai, but they cater to the locals. In other words, foreigners will get a very high price from them.
Often, I receive phone calls from strangers who got my contact details online via my company’s website. “Jing, I am in Shanghai now, but I didn’t find what I was looking for. Can I visit you to get some advice?” I can really understand how helpless these unprepared people are.
Last year, I met a customer, Jannie. She was planning to find a supplier for cosmetic packaging. And guess what? She flew directly to Shanghai and found nothing there. The thing is, she could have gotten the information she needed from Google before coming to China, and find out that the kinds of suppliers that she was looking for are more concentrated in the areas around Guangzhou or Yiwu instead of Shanghai.
10. Not sourcing your product at the right place in China
In China, there are many industrial clusters. You may be familiar with the industrial clusters in Guangdong province including Guangzhou, Shenzhen, Foshan, Zhongshan, etc.
The industrial clusters in the southeast of China include Zhejiang province – Yiwu, Zhuji, Ningbo; Jiangsu province – Kunshan, Wuxi; Fujian province – Fuzhou, Quanzhou, etc.
Back when I have not yet started my own sourcing company, I met someone in Yiwu who wanted to import a crystal chandelier to the USA. However, a crystal chandelier is hard to find in the Yiwu wholesale market. He complained to me that there are very few crystal chandeliers in Yiwu market.
So I told him that each industry cluster has its own product specialization. For example, the main production area for chandeliers is in Zhongshan. Yiwu is definitely not the right place for that. This means that it would be harder to find a competitive price for chandeliers in Yiwu than in Zhongshan, right?
11. Knowing about the Canton Fair but having no idea if the Canton Fair is suitable for you.
When talking about taking part in the exhibition in China, many foreigners will think of the Canton Fair, the largest exhibition (includes a wide variety of products) in China. But the suppliers there will have a higher demand for MOQ or have low MOQ but with an uncompetitive unit price. Moreover, many of the suppliers in the Canton Fair are big trading companies.
If you’re cultivating 1 to 2 products in a niche, Canton Fair is perfect for you. But, if you have lots of different items needed to be purchased (low MOQ), the Canton Fair may not be suitable for you.
For example, if you have a small supermarket chain in your country, you will need a lot of consumer goods. In this case, cooperating with a sourcing company or trading company seems to be the smart choice.
Common mistakes before massive production for your product
12. You believe the mass goods will be better than your sample
The sample provided by the supplier is not the one you want. But the supplier promises you that when the mass-produced product comes out, it would definitely be the one you want. “It’s just a small problem with the sample” is the common excuse. Sadly, many experienced importers will still believe in such unreliable words.
You should pay attention if you are in such a situation. A supplier like that is irresponsible: how can a reliable supplier make such a bad sample?
Below are two solutions for your reference:
A. when there is a problem with the sample you should ask the supplier for another sample until you get exactly what you want. If this supplier refuses your request and would just tell you that they will produce it perfectly during mass production, you better change to a new supplier. Keep in mind: a reliable supplier will work well with you from the beginning to the end.
B. you need a QC or a third party inspection agency in China. They can help you in inspecting the goods during production. If the goods don’t match your quality standards, you can ask them to refuse to pay the balance payment unless re-work on the products is done. In this case, the risk of receiving unqualified goods can be greatly reduced.
13.Consult your supplier about the details of your product certificates/patents
Many importers think that the supplier knows everything. Honestly, many Chinese suppliers don’t know much about product certification/patents. The certificates that are generally required are the Customs Clearance and a test report or certificate needed in the local market where the products will be sold.
So here are the 2 reliable ways to get information about the required certificates:
- Consult with your local forwarders about the product permission in customs clearance.
- As to certificates related to product sales, you better consult relevant institutions in your country.
Especially when you’re sourcing products on Alibaba, many vendors don’t really have an idea about the relevant certifications. A German customer once sourced bibs on Alibaba before he came to us, and asked us why the certificate from our factory is different from the one he got from his supplier on Alibaba. We found that it was a certification for the USA and not for Europe after we checked.
Sometimes, some suppliers won’t deliberately lie to you, it’s just that they themselves do not have a clear understanding of these certifications. But of course, there are a few actual dishonest suppliers who will offer you a fake certificate created through Photoshop, or send you an invalid one.
Regarding product patents, you should not rely solely on some suppliers’ words. You must verify it on the patent office’s website. Especially when you are intending to sell the product online, such as in Amazon, you will get into trouble if you sell a product with an infringed patent.
Common Mistakes when Communicating with Chinese Wholesale Suppliers
14. Relying only on email for communication and having no other instant messaging tools
A delayed response from your Chinese supplier always gives you a headache, especially when there are urgent issues.
It’s generally important to use email for business transactions with Europeans and Americans. The email is more formal and makes it easy to keep evidence in the event of a dispute. But when it comes to more urgent matters, a number of instant messaging tools will be very useful including WeChat, QQ, and Skype.
However, the means of communication is much different in Chinese culture. What I recommend is for you to use WeChat when doing business with Chinese suppliers. It’s the most common communication tool in China that even a child or an old man’s mobile phone has a WeChat application that they use as their daily communication tool. You are more likely to get an immediate response if you send an instant message through WeChat than via email.
Especially when you’re following up the status of your order, checking samples or the production, or in cases when an email is not clear enough, the video and voice functions of WeChat can help you clearly get your message across and even help show you the actual state of your goods, or in which step in production it is currently in.
Unlike in other countries, Skype is certainly not the most popular local communication tool in China. In fact, not every supplier uses Skype.
15. Your best time is not their best time
Many importers may think that Chinese suppliers have 24-hour customer service. But they are wrong. Many Chinese salesmen will not check emails after work. Therefore, it’s better to be aware of the time difference between China and your country.
I want you to know that many suppliers usually work in high efficiency from 10 am to 4 pm. Even though they can still receive updates from you outside this time period, many of them will wait until the next day to reply. In other words, it would be best to contact them within this time period if you have something urgent.
For example, if you are from the Western US, it would be best to contact them from 9 am to 12 pm in your time zone. But of course, you can still choose to contact them early in the morning if you’re awake by then.
Common Mistakes in Paying Suppliers
16. Many importers DO NOT check the holiday schedule in China during payment processing.
Generally speaking, it takes one work day to receive the payment from the US to China. Europe is slower, 3-5 days. As the delivery term usually states: production could be arranged after the deposit is received and product details are confirmed.
Now I want to remind you that you should avoid paying on Chinese holidays, such as during China Labor Day. In such situations, the time for the Chinese supplier to receive the payment will be extended by 1-3 days. Therefore, when Chinese holidays are approaching, it’s necessary to make sure that the transfer gets to your Chinese supplier before the festival in order to avoid production delay due to payments not received.
I prepared the following table of Chinese Holidays in 2019. If you want to know future holiday schedules, click here.
|New year||30 th ,December-1st,January||3 days|
|Chinese new year||4-10 th ,February||7 days|
|Tomb-Sweeping Day||5-7 th ,April||3 days|
|Labour Day||1 st -4 th ,May||4 days|
|Dragon boat festival||7-9 th ,June||3 days|
|Mid-autumn festival||13-15 th ,September||3 days|
|National Day||1 st -7 th ,October||7 days|
17. Not familiar with the handling fee and arrival time of the common payment method.
When it comes to payment, the most common way is by T/T. But this is not a cost-saving method for all possible amounts of payment. For example, transferring $100-200 will deduct $30-40 as bank charges.
I have sorted out the details for four common payment methods to China, suitable for small and medium-sized payments, in the following table for your reference. It will help you make quick decisions based on applicable amounts.
|Payment method||Handing charge||Applicable amount||Time of Arrival||Remark|
|Money gram||Check your Estimated transfer fees here||$500-$3000||Arrive in minutes||Maximum $10,000 if you choose send money online.|
|Western Union||Check your Estimated transfer fees here||$500-$3000||Depend on how you’d like to pay and how your receiver want to get the money.||/|
|Wire transfer(T/T)||$20-$50||≥$3000||1-5 days||/|
Also, it’s very important to prioritize big banks instead of the small local ones. The latter will cause more bank transferring. At this point, I’d like to suggest that you try VEEM.COM, wherein you will only be charged $20 regardless of how much you plan to remit.
Common Mistakes When Shipping Products from China
18. Always choosing sea shipment and thinking that it’s the cheapest even for very small volume shipments
To save on expenses in the import business, sea shipping has always been considered as the cheapest way of shipment. However, this is not the case.
Sea carriers charge per container rates for shipping in standard containers (20’ and 40’ being the most common sizes). While weight can factor into the price from sea carriers, the charge they make tends to be based more on the size of a shipment.
If you are shipping less than a container load, your price is often determined by cubic meter. With larger and heavier shipments, it is often much cheaper to ship by sea. As a shipment gets smaller, the margin between the prices gets smaller and sometimes, air shipment will even end up being less expensive.
19. Don’t take a risk for low cargo value declaration
It’s understandable that many importers want to declare a lower value for their goods to avoid customs duties. But don’t declare it too low. If your total declared value is deemed artificially low, the cargo is flagged, goods will be detained directly or the importer may be asked to provide additional evidence of the transaction value.
Undervaluing the declared value amounts to tax fraud and is a criminal offense, especially for European and American importers. You should pay attention to the fact that there is no chance of being lucky. Even if the event of getting checked by customs is just a probability, once it happens, it will bring you a lot of losses.
20. Not avoiding shipping rush
Did your goods’ production finish during the Chinese New Year period? Are there no more available spaces in the loading port, and the sea freight prices have gone up?
TWO peak periods need your HIGH attention: before Christmas and Chinese New Year.
Christmas is the shopping festival. Many importers will choose to store up before Christmas in order to have enough supply for selling. On Chinese New Year, on the other hand, many places may have to take long vacations for 1 to 2 weeks, and many freight prices will rise during the festival period. So try to avoid the peak seasons as much as possible. They don’t only bring with them limited port spaces but also increases in shipment pricing and lower efficiency.
My suggestion is that it’s better to make a plan for staggered shipments during the holiday period. For example, ship 15 days earlier before CNY and 2 months in advance for Thanksgiving and Christmas Day.
Finally, I’d like to hear from you,
Have you ever had any problems when buying wholesale from China that I didn’t mention here?
If so, let me know by leaving a quick comment below right now or feel free to consult our sourcing agents.