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Any Amazon seller will tell you that the risk of finding dishonest Chinese supplier or getting stuck with a poor-quality shipment is high. Whether you delve into an online B2B marketplace, an online supplier directory or visit a tradeshow or wholesale market, you’ll need to watch out for the few bad apples. In this post, we discuss your sourcing options and recommend the best way to find a dependable supplier for long term relations.
1. The Canton Fair
China’s largest import/export convention is held twice a year and covers virtually every industry that makes physical products. It is so huge that it runs in three phases:
Phase 1: Electronics, machinery, building materials and chemical products
Phase 2: Consumer goods, home décor and gifts
Phase 3: Textiles, recreational products, office supplies, shoes, medical devices and health products
You can attend for free but once you’re in, be prepared for what’s in store. Here’s a teaser:
– The sales representatives can speak basic business English. Some are hired for the fair and may not work for the company. You’ll learn about MOQs and some product details only.
– You can hire an interpreter at the fair at 400-500 RMB or $60-$75 per day. Service charges are higher for minority languages.
– Suppliers bring samples so you can see and touch the product to get an idea of quality.
– Low prices and not-so-great quality go hand in hand. Unless you’re willing to pay more than the advertised price, you won’t see the quality you want.
– After you speak to suppliers, they will ask for your business card to follow-up with you after the fair. Some Amazon sellers are hesitant to give their business cards to every vendor they meet out of a fear of their details being sold to other vendors. For etiquette’s sake, they may pass out fake cards to give to everyone except the suppliers they’re interested in.
The Canton Fair is HUGE. Find the list of exhibitors and their booth location on the trade show’s website in advance to save time and energy. The same suppliers participate each year, so novelty is missing. Don’t expect to see innovation either – the companies with a newer design or function may show prototypes and only be looking for distributors rather than OEM or private label manufacturing.
2. Yiwu Market
Disclaimer: Yiwu wholesalers are trading companies, not manufacturers.
The Yiwu Market in Zhejiang is open all year round. It has 40,000 shops and should be on your radar ONLY IF you want to source bags, shoes, textiles, watches and accessories at low prices. This is because the marketplace is heavily tilted towards buyers in India, Africa and the Middle East, and therefore their products don’t reflect the regulations and safety standards in the EU or USA. If you want toys, cosmetics or medical devices, you should look elsewhere.
Here, prices can go as low as you want but quality will go up or down accordingly. If your target market is highly segmented and you’re selling on multiple channels or distributing to other sellers, Yiwu Market can be an option. Some sellers use Yiwu as a complementary supplier for their existing suppliers when their stores are empty and need filler products.
Yiwu wholesalers work with factories in Zhejiang and Jiangsu. An advantage is that you can buy products off-the-shelf on the spot or have them shipped to your location in bulk.
If the goods you want aren’t ready for sale, make sure you’re clear about your quality requirements so that your supplier can place the order with a matching factory. Bickering on price will only result in the factory using cheaper materials which results in adjusting quality downwards.
You can hire a purchase manager to simplify sourcing. Yiwu agent services typically include picking you up from your hotel and driving you around the market to meet wholesalers, negotiating price and order terms, and coordinating procurement, including collecting different orders in one shipment. Agents are not responsible for reviewing quality control at factories.
You will bump into fake products at the market. Any famous brand you see at a Yiwu shop is likely a knock-off. Not to knock on Yiwu but it should have a place in your sourcing strategy only for equivalent products at low prices.
How to tell the difference between a trading company and a factory
Trading companies can pose as manufacturers, making it essential to know who you’re dealing with. Here are tips to differentiate correctly:
– Most factories make a specific type of product or focus on a specific type of manufacturing process to keep costs and overheads low. A company that advertises a range of items is more likely to be a middleman rather than a manufacturer.
– Trading companies generally have business names that appeal to global buyers. On the other hand, manufacturers usually include the town or city they’re based in within their company name.
– Check the company’s business card for the factory address. If the location is a downtown area or on the 20th floor of a building, you may be looking at a trading company. See if a separate office address is mentioned – it could be their sales office and located in the city.
– Trading company websites are in English to cater to foreign buyers. Small Chinese manufacturers may not even have a website, or it may be a basic site with inadequate Chinese to English translation, although bigger manufacturers may have sophisticated sites. This could be yet another clue to the company’s true identity.
– Ask for the company’s quality certificate (CE, UL and other certifications). A factory will be listed as an ‘owner’ on the certificate.
These checks become necessary when you seek out China suppliers without help from a sourcing agent that not only cooperates with but has strong relationships with Chinese factories. Agents are a safe bet to source quality goods in a hassle-free way.
3. B2B marketplaces
Your search for Chinese suppliers can start online. Alibaba, Made in China and Global Sources are all popular websites to find suppliers and manufacturers in China. As always, you’ll need to be wary of a few things in order to avoid getting scammed on these B2B marketplaces:
– Resellers may advertise as manufacturers, which isn’t much of a problem if you’re sourcing toys, clothes, accessories and cheap electronics. For products that must be made to specific technical requirements, only a manufacturer will do. So, if the product you will sell is made using a manufacturing process like metal stamping or plastic injection molding, you will need to verify the supplier’s capabilities early on. These websites rate their suppliers, but nothing is 100% transparent. For instance, suppliers who become premium members on Alibaba with an annual fee can get gold supplier status, which increases their visibility on the site but doesn’t mean anything as far as ethical behavior and quality levels are concerned. So, the vendors that get the most exposure on Alibaba – the ones who may pop up when you search for their product category – must still be vetted.
– After you’ve contacted a supplier, you can request samples and place your order. But the process can be lengthy, taking weeks rather than days from initial contact to receive samples.
– Given the back and forth with the supplier, you’ll wish that both of you shared a common language. The communication barrier makes explaining your exact requirements via email or live chat quite challenging.
– As major B2B sites offer an easy platform for just about any Chinese supplier to showcase before buyers, this over saturated venue may incline many quality vendors to opt out.
Other China supplier directories include:
· DHGate, which is great for buying products in bulk. Over two million sellers and 26 million businesses and individual buyers use the website. A ‘Superior Suppliers’ tab connects you to companies the directory deems reliable. DHGate offers guaranteed refunds and escrow protection on every order.
· The Hong Kong Trade Development Council (HKTDC) is a statutory body that develops Hong Kong’s trade, and organizes international conferences and exhibitions. Its supplier directory lists fewer companies compared to other directories.
A reminder:
– Trading companies can pose as suppliers on online directories. If they pay a fee, they will rank higher in search results regardless of feedback and ratings from buyers.
– Finding reliable suppliers on B2B marketplaces can be daunting. You need to separately screen each supplier, which should ideally involve a visit to their factory.
– It is easy to get drawn to the lowest prices or MOQs. Rock-bottom prices come at the cost of product quality. Costs can change once production begins, so the massive price advantage is not set in stone. If the supplier has never made the product it has advertised on the site, quality will suffer. Find out the market price/price floor of the product – offers that are 20%-30% below this price should set off a warning bell.
4. Sourcing agents
A China sourcing agent is ideal when you need products manufactured to exact technical specifications. Agents based in China visit factories to inspect quality controls closely. After you’ve greenlighted mass production, the agent will visit the factory again to inspect raw materials and even check the first few batches for quality.
Agents with boots on the ground in China are well-versed in Mandarin, so you can overcome the language barrier and communicate your requirements clearly. Chinese suppliers are very careful about what they share – they’re unlikely to inform you about production delays or ask questions if they aren’t sure about your product specifications. Sourcing agents can be helpful here as well, ensuring that the supplier is on the same page as you before production begins.
When you partner with an agent, you get comprehensive support throughout the sourcing process. If you want to get it right the first time and build along-term relationship with your supplier, engaging a sourcing agent is the right way to go.
5. Google
A Google search of Chinese suppliers may seem like a logical first step for new Amazon sellers. Chinese suppliers have business websites and a presence on social media. Generally, they have generic names like China Direct Supplier or China Wholesale Market on social channels. Some of these suppliers may actually be agents offering to help you find suppliers.
As mentioned earlier, many of the supplier websites in English are traders rather than manufacturers. If you find a manufacturer site that appears genuine, go ahead and make inquiries. You may get a quick quote, obtain a sample without waiting long, and find yourself on a plane to China for a factory visit.
Search using specific keywords for products or location, such as “Langfang furniture suppliers” or “Shenzhen electronics products”. A Google search using key terms is also a quick way to find relevant supplier pages on directories and B2B websites.
6. Baidu
Most Chinese use Baidu, and you can use a translation tool to find leads or see if those suppliers are on Google or Alibaba, and follow-up if they look promising. You may find more corporate details or information such as whether they’ve been involved in legal disputes.
7. Your industry network
Your business contacts may be able to connect you to Chinese suppliers or know someone who can guide you along the way. Also check with local trade bodies and Chambers of Commerce. It’s not just what you know, it’s also who you know.
Your supplier is your business partner
There will be some initial hiccups, and your relationship may weather ebbs and flows but staying on good terms with your supplier will help your business. It’s a lot easier to overcome language and culture barriers when you go through a sourcing agent. But you can manage on your own if you’re willing to travel to China every now and then, and really invest in the relationship.
