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How to Source Products from China

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China is an attractive marketplace for Amazon sellers who are looking to establish a profitable business. Once known as the ‘world factory,’ China can now produce high quality and high value goods. Before you start your google search on the best suppliers in China, you need to have a sound China sourcing strategy. This will help you avoid getting scammed, find a reliable supplier and negotiate the best deal.

Here is a quick guide to sourcing products from China

It’s not just about finding deals. Try to build relationships

Business transactions are carried out differently in China and in most other eastern countries as compared to the West. In China, the way business is carried out is through ‘Guanxi’.

Pronounced as ‘gwon-she,’ Guanxi means “connections” or “networks” that facilitate deals and open doors for business transactions. A person with plenty of guanxi is in a better position to grow their business than a person who lacks it. The Chinese term originates in Confucianism with the underlying philosophy of conducting any type of transactions, be it personal or business, is based on hierarchies and filial piety (‘xiao’).  In business transactions as well, it is about establishing a relationship on a personal basis with the supplier first using communication channels to build respect and trust. The success of a deal depends on how well you can build a personal rapport with the Chinese supplier. The stronger your foundation, the higher the pay off in terms of an ongoing successful business relationship.

Research the supplier carefully

Sourcing products from China is a complex process for Amazon sellers who are just starting out. It will take some thoughtfulness, effort and time to find the right supplier who is reliable and can meet your quality specifications.

Here are some of the most common platforms where you can look for suppliers in China:

Alibaba

Alibaba is a good place to start your search due to its sheer size. In fact, its size has prompted many to call it the Chinese Amazon. Founded in 1999, Alibaba had 960 million active customers in 2019 while close to 1.3 billion businesses are on the marketplace. To start searching for suppliers, you need to first create your Alibaba account. The next step is to go to “Sourcing Solutions” where you need to submit your request for quotations by filling in the relevant details. These details include:

  • Keywords of products- Put in a few keywords related to your product that might attract the attention of some suppliers. Including as many generic terms as possible can help capture the attention of as many sellers as possible. On the other hand, if you have a niche and complex product, using specific keywords will help attract the attention of those who do manufacture the product.
  • Detailed product description- Give the exact description of the product you want and include the measurements, dimensions, materials, logo and other customization required.
  • Quantity- After the product, one of the main things China suppliers look at is the order size. The more the order quantity, the lower the per unit price likely to be. If the order quantity is very low, suppliers may not show interest.
  • Photos-  Ensure you have good quality photos of the product you are looking for. Take a few close ups from different angles to give the suppliers a clear idea of what you are looking for.

The other way to find suppliers on Alibaba is to actively search for potential suppliers on the website. Type the product name in the search bar and Alibaba will throw up dozens of results. All of the results may not match with what you want and you have to spend some time to find the ones that match.

Ensure that it is a manufacturer and not a reseller before you message the supplier. Many resellers also pose as manufacturers which can be confusing to sort out. Although Alibaba is the biggest marketplace, the possibilities of you getting scammed is high. It is important to find legitimate suppliers, which can be challenging for first time Amazon resellers. Here are some tips that you can follow to find a legitimate supplier on Alibaba:

  • Look for Gold Supplier- Alibaba provides a ‘Gold Supplier’ tag for suppliers who have been vetted by the marketplace and passed their scrutiny. If you also see that the supplier has Trade Assurance, it means that Alibaba acts as escrow service for the transaction.
  • Find out the product line- If the supplier offers hundreds of products that are unrelated, it is a clear sign that you’re talking to a reseller or a trading company. A manufacturer makes a limited number of related products.
  • Ask for documents- Ask the supplier for documents and certification such as ISO 9001. Check if the supplier can show you business registration certificates and confirm the dates. Ensure the information given to you by the supplier matches with the details on the business certification.
  • Personalization- A manufacturer is typically able to customize your product as they directly access the machinery.
  • Tell the supplier you plan to visit- A legitimate supplier is fine with your visit. Red flags are when a supplier makes excuses and tries to discourage you from visiting.

The other platform you can go to is Global Sources. While this is not as huge as Alibaba, it has much better quality as each supplier undergoes a pre-qualification process of vetting which is much more stringent than Alibaba. You can also see the China Sourcing Reports on the site, which provide an in-depth look at different industries.

If you are looking to establish Guanxi, the best way is to head to trade shows and contact the supplier in person. Here are some of the most important trade fairs in China:

The Canton Fair

This is the largest trade fair in China and is held twice yearly and covers every industry related to physical products. The three phases of the trade fair are:

Phase 1 where you can find building materials, chemical products, machinery and electronics

Phase 2 is about home decor, gifts and consumer goods

Phase 3 deals with office supplies, textiles, health and premium skincare products, shoes and medical products

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