As we all know, it is highly recommended that you engage the services of Chinese suppliers to do business with a Chinese manufacturer, . While it may be difficult to find reliable suppliers, all the effort to obtain them is worth it. While importing business can be a bit tricky and stressful, reselling Chinese products can be highly profitable.
- 1. Why Should I Find Suppliers From China?
- 2. Types of Chinese suppliers
- 3. How To Find Reliable Chinese Suppliers?
- 4. How To Find China Suppliers
- 5. How To Verify China Suppliers
- 6. How To Negotiate With Chinese Suppliers
- 7. Top 10 China Wholesale Suppliers
- 8. Final Thoughts on Chinese Suppliers
In this article, we will be discussing the processes of finding reliable Chinese suppliers. Without further ado, let’s get to it.
Why Should I Find Suppliers From China?
Since China’s economy is still growing to some degree, manufacturing costs are low compared to the rest of the world.
As a seller, this provides you with an opportunity of a lifetime. If you decide to do business with a Chinese businessman, you will enjoy the incentive of buying goods at a low price and selling them at a high price in your home country.
For example, Apple, one of the richest technology companies in the world, initially produced iPhones at a cost of $40. Although they kept their manufacturing costs low, they still lost money due to efficiency issues.
After realizing that they needed to take drastic measures in order to get back on track and produce high quality phones as well as meet the high demands of their customers, they entered into a partnership agreement with a well-known Chinese manufacturer.
This partnership resulted in more profits for Apple, despite the fact that the cost price dropped to $8. This Chinese man produced top-notch phones while keeping manufacturing costs low.
The deal was a win-win situation for Apple – they produced the phone faster and cheaper while making a huge profit.
3 Types of Chinese suppliers
Manufacturers create products for resale or use. In the import process, Chinese manufacturers are the first link in the supply chain.
Most of the time, their price offer is low; however, the minimum order quantity is always high. Often, manufacturers prefer to deal directly with wholesale suppliers in China because they always buy in bulk.
For this reason, most retailers find it difficult to reach Chinese manufacturers when they want to source products. As a retailer, it may be easier to deal with smaller manufacturers because they are still growing and need all the customers they can get. A little questioning and research can help you find some.
Being a wholesaler means that you buy in bulk. This means that most of the time, you buy goods at a discounted price; therefore, the higher the quantity, the better the discount. Manufacturers offer better prices to wholesalers because they have the resources to create more products, which gives them more money.
As long as you have enough money and storage space, you can enjoy every benefit of being a top wholesale supplier in China.
Using the drop shipping service means that there will be no bulk purchases because you will only be buying one product at a time.
If you are dealing with a wholesale supplier, using the dropshipping model will mean that you do not have to pay for the product until it is sold. The downside of drop shipping is the price.
It is difficult to get a good deal from the manufacturer because there is no upfront payment; however, the same is not true for wholesalers. Another disadvantage of dropshipping is that branding can be a bit of a hassle and delivery can be slow.
On the bright side, dropshippers don’t have to deal with inventory, packaging and shipping issues. Also, in most cases, you don’t have to worry about customer service issues.
How To Find China Suppliers
Finally, you have been able to generate a nice product idea in your mind. What is the next step?
Find a Chinese suppliers. This task is difficult but worthwhile. When it involves finding reliable Chinese suppliers, you need to do your homework well and devise a good strategy. Mentioned below are the various ways of finding a good supplier.
China Wholesale Supplier Online Directories
Using an online directory is one of the safest ways to find suppliers. A good online directory must be able to reduce risk, allow for easy searching, and faster navigation. The following three online directories meet these qualities
Alibaba is the most common online directory for finding Chinese suppliers. However, you must be aware that most of the listings are made by manufacturers, not suppliers.
This means they may not have a website, have low English skills; you have to pay for your order by wire transfer rather than credit card, and most of the time, there is no guarantee that you will get the product you ordered.
Assuming you can’t afford to attend trade shows in Hong Kong and China, the next best option for finding reliable Chinese suppliers is to use GlobalSources.com. They have over tens of thousands of suppliers in their database, making your search easy. All you have to do is enter what you are searching for and everything related to that keyword will be displayed in front of you. You can go ahead and make your selection.
The platform was established in 1998 and has grown to become one of the top third-party B2B e-commerce platforms. It is operated by Focus Technology Ltd. and has been dedicated to providing high-end Chinese suppliers information and products to the international community. This company has successfully bridged the gap between buyers and reliable suppliers.
Google has risen to fame as the world’s most popular search engine. Almost everyone uses this platform as their number one source of information. This is the best place to look for dropshipping companies, although it has its pros and cons. You must be aware that you need to review any information that Google gives you to verify how legitimate it is.
Attend Trade Shows/Trade Fairs
Trade shows allow you to meet and physically interact with potential suppliers. With this, you can easily learn about their company values, products, production capabilities and quality control procedures.
The most popular trade shows are Canton Fair, Global Sources Trade Show, East China Expo and International Consumer Electronics Show.
This is touted as one of the best ways to find manufacturers in China. The event is held twice a year (usually in May and November) in Guangzhou, China.
Canton Fair is one of the largest sourcing fairs in the world. The show beats everyone in the U.S. It has grown so big that the organizers have had to divide it into three phases.
The first phase is for electronics suppliers; the second phase refers to suppliers of consumer goods, home decorations and gifts, and the last phase covers office supplies clothing, textiles and shoes.
The size of Canton Fair can be compared to 218 soccer fields. Have you ever tried to find reliable Chinese suppliers with the help of an online directory like Alibaba?
We are pretty sure you found that to be time consuming. You will have to evaluate many companies and assess the quality of their products just by looking at pictures.
This gives room for making mistakes. In addition, cultural and language barriers can be a challenge when it comes to communication.
What makes this fair unique is that it connects factory owners and suppliers from all over Asia; therefore, you can easily find suppliers who have the products you want to sell.
Suppliers are obligated to bring samples of their products so that buyers and suppliers can see for themselves before they buy.
Most of the suppliers you meet at this show have experience dealing with US and European companies, which means that exporting to your destination will not be a problem.
Another benefit of attending Canton Fair is that most suppliers speak basic English; this means that conversations won’t be much of a problem.
Hiring an interpreter is also inexpensive; for as little as $15, you can hire one for the day. Attending this fair may seem intimidating, but you don’t have to pay to attend. It’s free to attend and the cost of living around the area is quite affordable.
Global Sources Tradeshow
Just like the Canton Fair, this show is always a big event. Factory owners from all over the world gather here twice a year. This event is held before the Canton Fair; this means you only have to travel once to attend both events.
Although Global Sources is different from Canton Fair, it still has many benefits. First, the suppliers attending this show are always unique, which is not the case with Canton Fair.
Like Alibaba, Global Sources is a local search engine for Chinese suppliers. They have a large database of manufacturers, which helps you proactively contact manufacturers before attending the show.
In addition, Global Sources has a larger supplier base in key categories such as fashion accessories and electronics. Therefore, if you want the best fashion and electronics manufacturers, this show is your best bet.
Another key factor is the show’s strong focus on education. While the show was going on, a conference was being held at the same time to teach individuals the basics of running a successful import business.
This event had an exciting component with successful e-commerce business owners from around the world being invited to speak. There were very few language barriers at the Global Sources Trade Show. The show is held in Hong Kong where, unlike China, everyone speaks English; this makes communication much easier.
China Wholesale Market
There are a lot of wholesale markets in China. You can get whatever you need at a cheap rate here. Below are some of the major China wholesale markets:
Yiwu Wholesale Market
If you want to buy products from China, this market is one of the best resources. Here, you can find a wide variety of products at extremely affordable prices.
Unlike the trade shows that are held twice a year in China and Hong Kong, the Yiwu wholesale market is open all year round, except for Chinese holidays.
At the same time, the Yiwu market offers you the opportunity to buy goods physically and to have them shipped to your warehouse in bulk.
Essentially, most of the goods on this market are available for sale. What’s more, you can find many suppliers who deal with everyday products such as textiles, watches, handbags and accessories. What’s more important?
You can get them all at cheap prices. Another thing to remember is that the wholesalers in this market are not manufacturers; instead, they are trading companies.
On the downside, you may encounter counterfeit products here, so you need to be careful. Generally, the products here are not branded and if you happen to see a famous brand name, it is probably not authentic. It is easy to get cheap products, upsell and cross-sell in this market.
Guangzhou Wholesale Market
The entire market in Guangzhou is diverse, which means you can get any product category you want. However, you need to do your homework in order to avoid making the mistake of buying poor quality goods. You can do this by drafting a list of reliable stores before you visit.
Shenzhen Wholesale Market
This marketplace is known for the large number of products and suppliers it offers. If you are ready to start an electronic business on the right footing, this wholesale market is your best bet. Most of the top brands have their production units in this area as the production costs are quite low.
How To Verify China Suppliers
When you decide to start doing business with a Chinese supplier, you will need to do some verification before you make a choice.
This process involves a lot of hard work, and it’s even trickier if you haven’t done it before. There are various procedures you can go through to verify the authenticity of a supplier before making any transactions. Read below.
Google And Background Check The Company
Google has made the process of searching the Internet very easy. All you have to do is type in a relevant keyword or key phrase and everything around that topic will show up in the search results.
Don’t you think this would be a great tool to verify that your provider is legitimate? For example, if you search for “clothing dropshipping”, Google will show you many stores that have clothing in stock.
Let’s say you click on Alibaba.com; tons of clothing will be shown to you.
You can scroll down to see the names of the store owners as well as reviews from previous customers. In addition, you can check Google Maps to find out exactly where the store is located in China.
If there is an address and positive feedback, that is a green light; you can buy from that store. However, if the opposite is true, then you should avoid doing business with that vendor.
Every legitimate supplier is searchable on Google and their rating must be excellent.
These factors are non-negotiable when you are dealing with a vendor you have not met in person. Some sites also show the tax ID of the supplier; this can be very helpful in verifying the legitimacy of Chinese suppliers.
Perform An Onsite Check
Before venturing out, you must be aware that this is not a simple tax. The things you need to check are their business license, factory or company location, ownership status, photos of business operations, contact information, and proof of contractors, partners and subsidiaries.
These proofs can be difficult to obtain, especially if the supplier is a fraud. However, if you can get hold of 80% of the documents, then the supplier is likely to be reliable.
Order Product Samples
By carrying out this task, you get to witness the delivery time first-hand and compare it with what is quoted on the supplier’s website, have a feel of the packaging quality, and know the quality of the product the supplier delivers.
As an importer, you will agree with us that product quality is paramount. If you wish to carry out an excellent evaluation before you buy products from China, order at least 3 to 4 different samples as it gives you different perspectives to view from.
Ask For Previous Customer Feedback Before Committing
All the reliable wholesale suppliers in China would not consider it a problem to share testimonials from previous customers.
In most cases, they display the feedbacks on their website for everyone to see, so you don’t need to look for them.
However, some fraudulent platforms might upload fake testimonials to attract clients as well. If by any chance, the supplier fails to provide any testimonials or feedback from previous clients, you need to desist from going through with the transaction. You can look elsewhere.
How To Negotiate With Chinese Suppliers
Have you been trying to devise a means of negotiating and getting a favorable price from your supplier?
If you are too rigid during the negotiation process, there is a tendency that you will get inferior products or worse; the supplier won’t take your calls.
Recording success in every negotiation is about finding the right balance.
With this, you get the best price as well as high-quality products. At the same time, the supplier makes enough profit to keep his business afloat, pay stakeholders, and employees.
If you take the right steps during the negotiation process, the supplier will be happy, and he will surely want to do more business with you. Continue reading to find out the necessary steps to an excellent negotiation process.
Set Your Target Price
Prior to engaging in any price negotiation, you must set out your target price. In a scenario whereby you do not have one, you can contact various suppliers to ask for quotations; this will help you know the average standard price.
Most times, the supplier will request your target and specification when you are asking for a lower price. In some cases, they inquire before sending the first quotation. This helps him know what you are aiming for; however, you must be realistic while setting the price target.
Price Negotiation Is Expected In China
The truth is that most Chinese suppliers do not imagine you would accept the initial price offer. This means that they expect you to negotiate, and when you don’t, they are surprised.
Although there is a benchmark to how low you can push the price, there is nothing wrong with sending them your price target and persuading them to accept your offer.
Some of them may accept your offer while others would shy away from the deal. In a scenario whereby a supplier sends a quotation that exceeds your target price, you can make inquiries to know the cause and also share price offerings obtained from other suppliers.
You stand a better chance of getting a price reduction if you ask for it immediately after the first quotation is sent to you.
Accept That The Supplier Must Also Make A Decent Profit
Only a few importers know the abysmal profit margin that the majority of Chinese suppliers have to deal with. It is not that simple to offer a 10% to 20% discount unless the initial price is outrageous.
We believe that a 3% to 5% reduction from the supplier is excellent. That way, you enjoy a good discount while the supplier makes some decent profit on his end.
Unfortunately, most importers are hell-bent on price haggling, thereby pushing the supplier to record a loss.
If you are in luck, the supplier will turn down the deal and suggest a different company for you.
However, if you run out of luck, they will accept your offer to lower the price to suit your unrealistic target and decrease the quality of the product they will supply. We are sure you do not want that form of an unpleasant surprise.
Some products can comprise various materials, components, and quality standards. For instance, the production cost of a zinc alloy watch can be less than $5, but a similar design made with a 316L steel can be priced at about $20.
In this case, you may have cheated yourself out of a good deal, meaning you are paying a high price for a low-quality product. There may be cases of malfunctioning units. Also, the supplier will pay less attention to you as they would want to focus on more profitable clients.
Most importers have the mindset that a deal is a deal; therefore, it is up to the supplier to produce high-end products within a short period regardless of the low pricing.
It does not always work this way because every supplier would want to cover his production costs and bank some profits. If he doesn’t get that while dealing with you, there is a high tendency that he will undercut you.
You may have a feeling that since you will be having a long-term business relationship with the supplier, then he should give you a preferential treatment since your product is special.
You must note that things work differently in Asia. These companies need funds to stay afloat as well as pay salaries and dividends. If a customer pays a higher price, he stands a better chance of getting high-quality products with zero defects, and he will also be treated better.
This is not to say that haggling or trying to get a good deal is bad; however, you must not push too hard. Is the expense of having to sell low-quality products to your customers lower than paying a bit more for high-quality manufacturing?
While cutting costs, you should weigh its effects on your business. You can look for somewhere else to cut expenses, but your product quality must be standard.
Be Clear About Your Quality Requirements Before You Start Negotiating
As mentioned earlier, a product can be made using different components and materials. This breeds the need to have a fixed product specification; otherwise, you won’t know if the pricing is good or bad.
You need to understand product specifications and customization options in order to negotiate successfully.
Price Negotiations Must Be Done At The Right Time
Timing is an essential factor in every human activity. The same applies to this business; if you do any negotiations at the wrong time, your business will falter.
For instance, trying to negotiate after your products have been manufactured is a typical example of bad timing. Ensure you negotiate the price before any commitments are made.
Be Ready To Walk Away At Any Time
It is time to view the price negotiation from a different perspective. Let’s assume the supplier, for some reason, makes any increment when you are about to make your purchase.
Under this circumstance, if the deal is no longer favorable for you, walking away is the best option. We understand it is difficult to start afresh after getting to this stage. But it is best to save your capital than to walk into an unfavorable business relationship.
Stay Up To Date On Raw Material Costs
You shouldn’t be ignorant about the processes, commodities, and raw materials used to produce your goods.
While speaking with the supplier, mention some raw materials prices, and you will make an impression of being knowledgeable. Some suppliers might choose to play on your ignorance, so this factor is highly important.
Email Template For Chinese Suppliers
Trying to communicate with someone when there is a language barriers can be tricky. Unfortunately, most Chinese suppliers are not fluent in English.
The easiest way to scale this to write your emails in plain English; that way, your supplier can easily hire an interpreter to help. With constant communication with your supplier, his English-speaking skills are bound to improve.
Final Thoughts on Chinese Suppliers
Finding reliable Chinese suppliers is not an easy job, but it right tools help to relieve the burden.
You must put in enough effort into finding a good supplier because the benefits are bountiful.
We trust that our guide has taught you all you need to know about getting a reliable Chinese supplier.
With this, we have set you on the path of being successful as an importer.
After reading this post, I hope you can get a lot of useful information for your business, if you have any questions, please contact us or leave comments below.