Strategic sourcing from a China wholesaler is about three things: Cost management, Stability and Risk management.
Strategic sourcing is a win-win for the buyer and supplier. A huge attraction of choosing a low-cost manufacturer is the cost advantage that is pretty much guaranteed to you. However, it helps to be realistic about how low you can drive down prices. Anything below the price floor of a specific item and you’ll have to deal with inferior quality and poor sales, however you may be able to negotiate a lower price for larger orders and maintain quality.
After finding the right supplier for your product, you will enter a formal partnership. The Chinese way of doing business is to maintain harmonious relationships, exchange favors, and be emotionally invested in the partnership. Ethical obligations supersede contractual obligations. The key to long-term China wholesale success is maintaining stable relationships with quality, savvy suppliers.
A relationship based on mutual trust and benefit is instrumental toward effective risk management. This is especially important when working with Chinese manufacturers as they are often reserved about sharing bad news or talking openly about risks. Chinese business culture also leans strongly towards social unity and centralized decision-making. You need to establish goodwill and show strong leadership before you can expect your supplier to have an honest conversation about a temporary cash crunch that may affect production or some legal trouble that may impact their business operations.
Find products to sell
You may have an idea for a product that solves a new or evolving need. You may want to join an existing pool of buyers that sell some of the most-purchased products on Amazon. Your market research will help you determine a profitable Amazon strategy.
Take into consideration how easy it may be to ship your product. Heavy products have higher shipping costs. Fragile items may suffer damage in transit and cause heavy loss in the event of an accident. Avoid products that are at the end of their lifecycle and likely to be phased out.
Your China wholesale strategy doesn’t have to revolve around a product, creatively you can source components for cheap and resell them or assemble them with other components for added value and sell the final product under your brand name.
Calculate your landed cost
The landed cost is the total cost of getting a shipment to its destination. Determine the rate of duty you need to pay when you import your goods. There is a 13-digit HS code for products arriving from China to your country. The price of the product, shipping charges and clearing charges at customs, along with the total duty, tax and transportation costs to your warehouse all adds up to a bundled landed cost.
Know where to look for suppliers
A China wholesale strategy is popular among international buyers. A successful Amazon business, however, hinges on partnering with quality suppliers. You will find many on Alibaba, Global Sources and Made in China. These directories are a good place to start your search.
If you prefer to meet wholesalers and tour factories in-person it would be advantageous to schedule a trip to China in time for major fairs and tradeshows, such as The Canton Fair, East China Import and Export Commodity Fair, Yiwu International Trade Fair and Bauma Fair. The Canton Fair is the largest of its kind in the country. If you’re scouting the market for potential products to sell, you may get good ideas here.
Be aware that you can get ripped off
With support from government policies, China’s manufacturing enterprises have strengthened technological innovation and transformation. Opportunities to procure quality goods at competitive prices abound, but not every supplier can promise the same level of quality. In fact, those who advertise as being suppliers online may actually be intermediaries looking to trap unsuspecting Amazon newbies.
Anyone who has sourced from or otherwise worked with Chinese suppliers will tell you that quite a few supplier descriptions and promises are smoke and mirrors. When quality is a priority or if you require private labeling, your manufacturer should have the expertise, tooling and capacity to meet your technical, labeling and packaging requirements.
For this reason, Alibaba has different tiers of supplier checks. Even then, those who have undergone basic checks may only have tooling for less than half of the products advertised in their catalog. With just approximate 3D renderings and no molds, spec sheets or design drawings; generating trust may prove difficult. Enticed by a suppliers’ product catalog containing showcased items creates the illusion they have already manufactured items that in actuality they have yet to produce, sellers may fail to underestimate the risk until it’s too late.
So, don’t expect every China supplier to have fixed product specifications, such as material specifications and design drawings. They will expect you to provide explicit requirements for materials, design, labeling and product compliance.
If you go with a cautious mindset and the knowledge that product catalogs don’t represent the full truth, you’re less likely to be bowled over by rock-bottom quotes. No supplier worth their salt will quote or negotiate unbelievably low prices. A healthy expectation regarding both price and quality is important to make a smart choice.
Supplier due diligence is critical for China wholesale success
Making relevant inquiries about a potential business partner is a necessary step regardless of whether you’re sourcing locally or globally. Checking business registrations and public documents, verifying trade accreditations, and speaking to previous customers take time and more so if you’re unsure about where to start. Getting in touch with the supplier also provides the clarifications you need to decide whether to go along with the business or look elsewhere. Don’t be afraid to trust your instincts even if that means going back to square one.
