Ten Tips to Source your Products from China
Chinese Wholesale Tip 1: Verify your Supplier
This is a very important Chinese Wholesale tip. The number of manufacturers and suppliers in China is endless and the efficiency, quality and legitimacy between them vary significantly. Therefore, it is important to verify your supplier before you make a payment. Do not get impressed by a professional website and rankings on Alibaba. There is only one way to properly verify a business in China and that’s through a local government office, which will check the manufacturer’s business registration, the annual turnover and its trading history. However, this could be difficult without being fluent in Chinese and without being on-site. Furthermore, in order to not get ripped off, it is essential to transfer all payments to an official bank account of the registered factory or a trusted intermediary and never to individuals or unions in China.
Chinese Wholesale Tip 2: Get someone on the ground in China
There are countless Chinese manufacturers so they often try to cheat you, as their reputation isn’t normally damaged internationally as they operate in a complex environment. Furthermore, even professional manufacturers in China make mistakes mostly because of communication issues. The manufacturing industry in China can be described as a Fire fighting business where problem-solving issues come up on a daily basis. It can be considered a gamble and often ends in disaster if you try to manage your production from outside of China. With employees or reliable contacts on the ground, you can control this risk.
Chinese Wholesale Tip 3: Always do Quality Control
Never import from China without any kind of quality control, as the production standards often don’t meet western compliance. Some of the best quality products are produced in China, but on the other hand, it has some of the worst as well. Despite China’s overall rise and economical growth, there are still factories, which produce questionable quality. It is not uncommon that a Chinese manufacture copies a product and reproduces it without the exact knowledge of its use. The product might look the same, but it might not work as effectively as the original product. Once the goods are on the ship or have arrived in your country, there is no turning back. Importing goods without quality controls is not conceivable as the risks are too high. Either have your people on the ground in China that can carry out onsite quality controls or source your products with a respectable company like MyShipper, which provides three separate quality control inspections before the goods leave the factory.
Chinese Wholesale Tip 4: Don’t get screwed on payment terms
It is essential to understand the terms and conditions when making payments to the manufacturer. Normally, your payment includes the whole production costs including the transportation and Chinese boarder tariffs. It is not uncommon for the manufacturer to abuse the ignorance of the customers by adding on extra hidden costs. This then leads double charging for the transportation and customs, which is nearly impossible to be compensated for. In order to avoid this risk you need to be fluent in Chinese and know the legal knowledge of the Chinese terms and conditions forms as well as knowing the exact location of the factory so you can estimate the transportation costs. To avoid this minefield you must hire a consulting agency to check the terms for you and to secure your payment. One of the founding owners of MyShipper is an Australian born and trained lawyer who is fluent in Chinese that is an expert in the Chinese terms and conditions documents which is one less worry for importers.
Chinese Wholesale Tip 5: Get Insurance
The statistics show that most importers do not insure their goods, which is a very risky practice. Businesses who do not consider insuring their goods risk damaging their business significantly if a container load is written off. Although rare, container ships can sink, or containers can go over board, or get lost or even catch fire. However, the most common issue is that the goods get damaged during the transit. Chinese dockworkers are sometimes careless when handling containers so your process from door to door must be managed. Additionally, heavy goods can be loaded on top of light goods and can cause damage during shipment. Finally, at the boarder, damage can occur during custom inspections. The MyShipper service includes a full insurance on your sourced goods so always order products that include this without massive mark ups.
Chinese Wholesale Tip 6: Use a company that has a Mixed Container Service
A transportation company can fill up containers with products from different customers in order to increase efficiency and save transportation costs. Therefore, it is recommended to hire a transport company when importing less than one container. Furthermore, the risk of lost packages during the loading or unloading process is minimized because the international transportation companies have a reputation and have extensive procedures to prevent loss. MyShipper has established transport links and partners so they pass on the cost savings directly to the customer.
Tip 7: Get the right price
In general, there are two ways of getting a fair price when importing container loads from China. If you import less than one container, you have limited bargaining power, so you have to ensure that you are not paying over the average market price in China. To do so, you have to get different quotes from different manufacturers, which can differ greatly from each other. It is common for different manufacturers to have the exact same pictures in their brochures that are offering different prices. Try to get as much information from the manufacturer as possible to ensure quality and a fair price. Never go for the cheapest offer without carrying out due diligence as a seemingly good deal can turn into expensive rubbish. If you import more than one container you have more bargaining power so be sure to negotiate or deal with supplier that is working on your side. However, to get the best price you need local knowledge, product sourcing experience, knowledge of labour costs, production capacity analysis and experience with the Chinese taxation system – which all depends on the location. Only when you know the real production costs, can you negotiate the best price. MyShipper has an office in China with an Australian lawyer as a Director that is fluent in Chinese who works directly with our Chinese employees. Therefore, MyShipper can negotiate the best price whilst guaranteeing the very highest quality and Australian standard.
Chinese Wholesale Tip 8: Get a contract
As in every business, without a contract you cannot blame the manufacturer for not fulfilling its obligations. Consequently, the legal system in China is still underdeveloped and has underlying holes. There are some critical rules you have to follow in order to draft a proper contractual document. It is imperative that all the specifications and materials used in production are included in the contracts, even if it is seems clear cut. It is very important that you get the factory stamp on the contract because even if the contract has the signature of the manufacturer, without an official factory stamp, the contract becomes worthless in China. As MyShipper has an Office in China and Chinese speaking employees, manufacturers deliver far higher standards. As a result, MyShipper knows the exact specifications to put your mind at ease when signing any legal contracts.
Chinese Wholesale Tip 9: Samples
As soon as you agreed the price with a manufacturer, a sample is sent out in order to demonstrate the quality of the product. In general, these samples offer high quality and fulfil the customer’s specifications. There is always the danger that the actual products that arrive at your door don’t meet the specifications of the sample so it is important to make sure the legal contracts and insurance cover this issue. Cheaper materials can be used and quality checks are ignored leading to defect products. Some manufacturers even buy their samples from premium factories in order to send them to their own costumers. MyShipper always demands two samples, one for our client and one for comparison in our office. As soon as the order is complete, MyShipper compares it to the provided sample whilst in the factory before the goods are signed off. Subsequently, MyShipper can guarantee the client’s demands are met as repeat business and word of both are fundamental to maintaining the exceptional brand quality.
Chinese Wholesale Tip 10
Due to significantly lower prices, product sourcing from China is lucrative and gives your company a competitive advantage. However, it can lead to complications for uninformed businesses. MyShipper, an Australian owned business, provides elite service and sources your goods directly from the manufacture to cut out all the middle men and therefore guarantee lower prices in a safe and hassle free way with experts guiding you every step of the way.