Qualifying Chinese suppliers is hard work and a huge investment of time. Here's a look at the various routes to find suppliers, and the advantages and disadvantages of each.
How do I find suppliers in China? This is a common question among importers doing business in China for the first time. It is also on the minds of experienced sellers seeking new product manufacturers with advanced capabilities in China. Look at the options to understand how best you can identify the perfect manufacturing partner for your needs.
1. B2B online marketplaces
You can start searching for Chinese suppliers online. The top China supplier directories such as Alibaba, Global Sources, Made in China, DHGate.com and HKTDC are often the first option for importers who want to do a China supplier audit. However, there are a few things that you must be cautious about:
a. Many resellers pose themselves as manufacturers. If you are going for a product, which needs special processes to manufacture like metal stamping and plastic injection, then you must verify that the company you are dealing with is a real manufacturer not a trader.
b. Although these websites rate their suppliers, not everything is 100% trustworthy. To give you an instance, any supplier who purchases a prime membership of Alibaba and pays annual fees can easily get a gold supplier status which leads to increased visibility on the website. However, that is not a testament to his quality.
c. Once you contact Chinese manufacturers, you must request the samples before you place an order. The process of contacting the supplier to get the samples can be lengthy ranging from weeks to months.
d. Communication plays a very important role to explain the quality of products that you want. This communication gets difficult when the language that you speak is different from that of the seller.
The following are some tips for using B2B marketplaces.
- Know the specifications of your product. If you have a concept that you wish to turn into a product, you may want to work with a factory with the capabilities to build new or innovative products in your category.
- Identify the factory characteristics. What does your ideal factory look like in terms of skills, tools, capacity, and other attributes? In China, different industries manufacture products in various provinces. Determine the city that specializes in your product category.
- Assess product photos from the supplier. Are they grainy? Are they an accurate representation of the product? Go through the details on the product page. See if the supplier has uploaded certificates that sellers seek.
2. Trade shows
Trade shows are a great opportunity to meet Chinese manufacturers, traders, and wholesalers. The shows are intended for importers from around the world to build contacts and do business in China. Visiting a trade show requires advance planning from your side, from getting your invitation letter from the event organizers and applying for a visa to booking flights and hotels.
Canton Fair is the biggest import and export trade show in China, which is organized twice every year. The phase is so diverse that it covers almost every industry. The convention is organized into three phases:
Phase one - For electronics and machinery.
Phase two - For consumer goods and home products.
Phase three - For textiles, office-related items, health products, shoes, and medical products.
To give you a brief idea of what you can expect from the fair, here are a few keynotes:
a. The sales representatives speak English and Chinese. Many of them are hired for the fair and do not work for the company.
b. You can even hire an interpreter for a minimal cost of $60-75 a day. The charges however skyrocket for minority languages.
c. Almost all the suppliers bring with them the samples. This allows you to touch and feel the quality of the goods that you can expect in the future shipments.
d. The prices are usually low, but if you are not willing to sacrifice the quality, then you will have to pay more money.
3. Industry and social network
A business contact, friend or relative that are involved in direct sourcing from China can help make initial introductions with Chinese goods suppliers. It's great because it can save you the time you have to spend on finding a supplier on your own.
Your industry and social network can surely connect you to a factory they know, but it would be unwise to rely entirely on your contact's recommendations and jump to a deal with the Chinese company. You'll still need to do your due diligence and qualify the supplier before you pay for the moulds and deposit of an order. After all, it is you who will be impacted if something goes off the expected course.
After your contact shares the details of a supplier they trust, prepare a list of all the questions to determine if they're a good fit for your business. Inquiries you can make include:
- How many overseas customers do you have?
- Do you have long-term customers?
- Can you develop a new product per a design?
- How do you manage quality control for the products?
You will still need to visit the factory to review whether the supplier has the skills to mass produce your products.
After you're satisfied with the factory and place your first order or decide to custom products made in China, you will need to monitor your order. Chinese factories pay more attention to orders from customers who maintain strict oversight. This is an important point to note for new sellers in the west who only have visibility into their order through online communications with their supplier. Most Chinese factories work on thin margins and accept many orders to boost their bottom line. They tend to prioritize large orders and established sellers. So, unless you follow-up with your supplier frequently, there's a possibility that they might move a large order to the front and push back your smaller order. You don't want to be seen as an unimportant client.
4. Work with a sourcing agent
Over the years, more and more western importers tend to use sourcing agents to help in China product sourcing. Experienced sourcing agents make the sourcing journey smooth. Their services include helping your find the right supplier, manufacturing control, quality inspection, order monitoring and shipment arrangement.
Your sourcing agent works for you and, as a fee, charges a percentage of the total order value you place with your supplier. Overseas importers have come to rely on sourcing agents, for some reasons:
To save time: You can expect to invest considerable time and effort to find your ideal factory. With a sourcing agent, you save time to devote to other business activities. A sourcing agent has working relationships with suppliers in a province with clusters of factories making your products. An experienced agent plays matchmaker and connects you to a manufacturer with the capabilities you require.
To make a smart choice: Buying bulk items from China via the internet can be risky even if the manufacturer has the capability to make them to your specifications. You should know what to check for, and the best way is to meet the supplier in person and visit their factory, but it is difficult as you live on the other part of the globe. A sourcing agent sends RFIs, checks whether suppliers have the necessary certifications and permits, performs factory audits and other assessments you specify.
To keep a grip on quality: Chinese suppliers have narrow profit margins. They accept many orders to remain profitable and pay special attention to large orders and long-term customers. Sometimes, it translates to less focus on smaller orders or new clients. A sourcing agent conducts checks at various stages of production, from verifying raw materials and adherence to your product specifications, to conducting random batch checks and confirming product quantity prior to shipping.
To keep tabs on your order: There is a possibility that your manufacturer may prioritize large orders and take it easy when it comes to small orders. This creates the risk of not meeting delivery timelines. In a different situation, the factory may suffer a downtime from a labour dispute, government order or shutdown of raw materials suppliers. Despite deliveries being affected, Chinese suppliers may not relay the news to you quickly. With a sourcing agent, you know what is happening, how your order may be affected, and how best to address the situation.
To avoid getting held up at customs: The purpose of customs inspections is to verify whether the nature, origin, condition, quantity, and value of goods moving out of the country are consistent with the information filled in the declaration form. QC inspectors randomly select products for quality inspections, check the packaging, labelling, and other marks.
Sourcing agents not only provide a final inspection report, but also take care of customs clearance, ensuring that your shipment isn't derailed.
Conclusion
You must trade with caution in China. Getting a reliable supplier is an extremely difficult task, which will involve a great level of risk. Your goal should be to build a long-term relationship with the supplier, which serves you the right quality of products at a favorable price.
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