Although manufacturing costs in China have risen in recent years, the country remains the go-to destination for wholesale sourcing due to an important reason: faster and more efficient supply chains that remain unrivalled elsewhere. In today’s fiercely competitive and dynamic ecommerce world, where trends vanish quickly and copycats thrive, rapid time-to-market results are a critical competitive advantage.
What is your China wholesale strategy?
Wholesale, a catch-all term for sourcing large quantities of goods at a low price, can mean different things to different foreign importers. Do you want to contract with a Chinese factory? Are you looking to buy from a wholesale market or supplier in China? Depending on your sourcing strategy, you can consider the following options.
Where to find Chinese suppliers
At the Canton Fair
China Import and Export Fair (Canton Fair) is one of the biggest trade fairs in the world. It is held in Guangzhou twice a year (end of May and beginning of November) – in three phases – covering electronics, consumer goods, gifts, textiles, garments, shoes and office supplies.
The fair is massive, involving participation from suppliers and manufacturers throughout Asia. You will be one among potentially thousands of importers from the United States and Europe attending the Canton Fair.
Many of the Chinese suppliers at the trade show have been showcasing their business for many years, and are familiar working with foreign clients. You’re very likely to find someone who trades or can make the product you will retail, although sourcing directly from a manufacturer is often more reliable and cost-effective. Companies bring samples, so you can review product quality and short-list potential manufacturing partners. The full supplier list can be accessed at the Canton Fair website.
Suppliers may also speak limited English, so interactions may seem manageable but are often problematic. To avoid this you can hire the services of a translator at the trade show for a reasonable fee and you will quickly appreciate the advantages of communicating with a translator.
A China visa isn’t expensive but processing can take up to three weeks. Book your flight to Guangzhou a few weeks in advance of your trip as last-minute flight costs can put a big dent in your budget. A cheaper option is to fly to Hong Kong and take a high-speed train to Guangzhou (travel time of approx. 50 minutes).
Canton Fair is free to attend and the cost of living in China is far cheaper than any country in the west. The ballpark figure for a one-week stay in Beijing, Guangzhou or Shanghai is $1,000.
On Alibaba
Alibaba outshines other supplier directories in the sheer number of wholesalers, dropshippers and manufacturers. The website is popular among importers looking to lower their sourcing costs and amplify margins. Alibaba is on good terms with the Chinese government and a safe platform to find products to sell online – as long as you know how to spot the scammers and middlemen.
Specifically, if you need to have your product made in a certain way or don’t want to sell a widely available commodity that many are selling anyway, then you will want to watch out for trading companies posing as manufacturers. You will also pay more when you wholesale as the company will purchase from a factory and add a mark-up to large orders that’s usually more than what you can negotiate directly with the factory. The only advantage is that you can make smaller purchases in contrast to the minimum order quantities (MOQs) set by Chinese manufacturers.
How to spot a middleman
– They usually advertise many categories of products. Manufacturers usually specialize in bulk-producing specific products, parts or components.
– They may have a well-designed website in English and market excessively. Chinese manufacturers generally have basic websites with poor English translation. They’re more about face-to-face marketing and relationship-building than digital marketing.
– The address they provide may be a building in the city center. Factories are generally located in industrial parks outside cities. So, if Google Maps points you to the center of Shanghai rather than around it, you may want to make more inquiries.
Of course, middlemen can cover their base and give you all the right answers. They may send pictures of the factory (not theirs), their location may check out, and you may also find a couple of positive customer testimonials. Still, to be really, really sure, it is best to tell the company that you’d like to audit their factory. If they act evasively, your suspicions will seem plausible. On the other hand, if you’re okay buying from a long-term wholesaler and manage to get a price that supports your margins, you should go for it.
Other supplier directories: Global Sources, Made in China, DHGate and Hong Kong Trade Development Council (HKTDC).
At the Yiwu market
Zhejiang’s Yiwu Market is home to 40,000 shops, and open all year round. It is an excellent place to purchase bags, watches, shoes, textiles and accessories at competitive prices. Yiwu wholesalers work with factories in Zhejiang and Jiangsu. You can make purchases then and there, and have your bulk order shipped to your location.
If the goods you want aren’t ready for sale, specify your quality requirements so that your supplier can place the order with the right factory. Be wary of fake products and knock-offs at the market. You could hire a Yiwu agent to get in touch with wholesalers and outsource all aspects of procurement. Note that the agent only offers administrative assistance, and won’t audit factories or perform pre-shipment quality inspection.
