What You Must Know About Sourcing from China
- December 25, 2015
- Posted by: Kevin168
- Category: Source from China
Known as the manufacturing center of the world, China boasts a massive capacity for manufacturing. Due to the low cost of production, many companies continue to move their manufacturing base to China. Although in recent years the relative cost of production in China has risen, the country is still often the cheapest place to source goods. Also, its factories are often superior when it comes to speed, quality, efficiency, and higher output.
For these and many other reasons, China remains one of the best places to have your products made. However, there is a steep learning curve when importing from China some of which is the language and cultural differences. In this guide, we’ll explain some of the most important things you need to know about sourcing from China.
Do Your Research
If you want to avoid problems with sourcing from China, then you have to be prepared and do your research from the beginning. Work on your product and do as much upfront research as possible before approaching any factory or supplier. One of the common hurdles about sourcing from China is choosing a company to work with. However, there are lots of ways to find the right company for your business. For instance, you can start your search on the internet via Google and sourcing platforms like Alibaba and Global Sources.
You should also put the type of service you require into consideration. Is it an enhancement, pre-existing product, or a brand new innovative product? Each of this requires a different level of specification which is while you have to do more homework. You should also ask a lot of questions from your potential supplier or manufacturer; you can start by asking for samples, the company’s portfolio, payment method and more.
Negotiate with Your Supplier
You will have two significant opportunities to negotiate with your suppliers. At first, during the quotation phase and after you have received samples and done order testing and decided to go with the company. During the negotiation, there are more at play besides just the final price. For instance, you are also negotiating the payment terms, quality of the product, delivery times, and more.
It is essential to be able to communicate the value of your business to the potential supplier and stand out as someone who is ready to buy with huge capital to invest and prepared to build a long-term relationship. If suppliers see these qualities, they will take a significant interest in you and your business and get back to you as soon as possible with the best quote for your request.
Request For Product Sample
Requesting for product sample is one of the most critical steps you must take when sourcing from China. Once you’ve found your list of potential suppliers, you should ask for a couple of product samples. Requesting for samples helps you decide whether or not a supplier can offer what you are looking for in a product.
Most legitimate suppliers will be willing to send a sample for a relatively small fee. Getting samples allows you to scrutinize every area of the product, from the materials used and parts to the attention to details and product dimensions. Moreover, with a product sample in hand, you can run comparison testing against samples from other suppliers.
Place a Test Order
Now that you have received samples and confirm the suppliers you may be working with, the next key to sourcing from China is to do a test order. By placing a test order, you can make sure that your supplier can deliver on everything they promised.
Placing order gives you more insight into the way the company works. When they start saying things like “delivery time is now going to be 60 days and not 30 days” or they start asking you “what material do you want,” then you need to think twice about the supplier. Also, it is better to have a lot of questions during test order than when you have already placed $200,000.
Hire Commission-Based Sourcing Agent
Commission-based China sourcing agent is someone who can help you with your sourcing and procurement process. When you hire these agents, they can help you with the whole buying process and identifying legitimate supplier to logistics and shipment management.
The most significant benefit you will get from hiring the services of commission-based China sourcing agent is the fact that they are usually from China. The agents know better than you when it comes to dealing and negotiating with these suppliers to get you the best deal.
Sourcing goods from China are quite challenging, and there is usually the potential for unforeseen problems. But the significant cost reduction makes it worth the while as long as you do your research beforehand. You can also protect yourself and investment by following the steps above. Most importantly, working with your suppliers is predicated on building relationships. Your relationship is the base to your future growth so invest the time in building the relationship, and you will be greatly rewarded.
- Growth through innovation/creativity:
Rather than be constrained by ideas for new products, services and new markets coming from just a few people, a Thinking Corporation can tap into the employees.
- Increased profits:
The corporation will experience an increase in profits due to savings in operating costs as well as sales from new products, services and ventures.
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The link between profits and business value means that the moment a corporation creates a new sustainable level of profit, the business value is adjusted accordingly.
- Lower staff turnover:
This, combined with the culture that must exist for innovation and creativity to flourish, means that new employees will be attracted to the organization.