There are many benefits of working with suppliers based in China.
The main reason China is seen as the best country to source products from and is often referred to as 'the world's factory, is its low cost.
Although this economic benefit seems extremely exciting, you need to be careful when selecting your suppliers.
If you are interested in finding the best Chinese suppliers and outsourcing products from China, this article is for you!
Why Opt for Chinese Suppliers?
China is by far large one of the world's most substantial manufacturing markets in the world.
Both by the value of the products produced, and the volume they are churned out.
You can make anything in China at low low prices, from cheap mechanical pencils and even the most advanced smartphones.
Low Manufacturing Costs
One of the biggest benefits of getting your product supply from China is that manufacturing those products in China is significantly cheaper compared to other countries.
This is due to the availability of resources and low-cost raw materials, which enable businesses to generate a high turnover.
Low Labour Cost
Another benefit of getting your supply and manufacturing in China is the extremely low labour cost.
Compared to your home country, Chinese suppliers offer much better rates due to the cheap labour in the country.
The cost of labour does depend on how labour intensive the product being supplied is.
However, even if it takes longer to make, the wage difference will make a huge difference compared to your home country.
Another reason labour costs are so low is that you do not need to arrange any additional training for employees.
You do not have to worry about training and hiring skilled workers by simply outsourcing your supply and production to a factory.
China is one of the worlds leading factories and has significantly contributed to the global economy through its production of goods.
Their manufacturing capabilities are much greater than local factories.
This ensures that when you get your supply from China, the goods are produced in large factories that can handle mass production and have been running efficiently for years instead of taking a risk by manufacturing your products in the smaller or newer factory.
Cons of Using Chinese Suppliers
An important part of finding the right supplier is knowing when you've come across the wrong supplier.
Spotting an unsafe supplier earlier on is a key to success when looking for the best possible supplier in China.
Risk of Low-Quality Products
Many cases where people have received low-quality products or orders that do not meet their specifications.
To avoid this, you should always ask for the company's quality certificate and check their reviews.
Additionally, you should also test the prototypes provided to ensure that the product is of good quality before making a huge investment or buying in bulk.
The Language Barrier
The language barrier can sometimes be a real obstacle, especially if you are not in China yourself and are trying to find a supplier from a completely different geographical location.
The language barrier can cause many issues in communication in terms of transportation costs and payment processes.
To avoid these issues and potential delays, you may have to look for a supplier who speaks your language or hire a translator.
Risk of Getting Scammed
One of the major disadvantages of finding a supplier in China is the risk of potentially getting scammed.
This is a huge risk if you are trying to find a Chinese supplier from abroad, as there is generally more room for things to go wrong when you are not working face to face.
However, companies like Sourcify protect businesses and only connect them with trusted factories.
Where Can You Find the Best Suppliers?
Finding a supplier in China is easy.
Finding a trustworthy and reliable supplier in China, is hard.
But it's not impossible and with just a few tips, you'll be able to headhunt the best suppliers in style.
Import/Export Conventions & Markets
Multiple import/export conventions take place in China, where you can find suppliers.
One of the largest and most popular conventions is the Canton Fair which is held twice a year.
This convention covers nearly every industry and is divided into three categories.
The first being electronics, machinery, building materials and chemical productions.
The second dealing with consumer goods, home decor and gifts.
The third being textiles, recreational products, shoes, medical devices and health products and office supplies.
To make things easier for you at the convention, you can hire an interpreter for 60-74$ per day.
When attending such conventions, you should make sure to have a set of business cards to give out as suppliers normally ask for one to follow up after the fair.
On the other hand, you can also attend in-person markets that are open all year round.
The biggest one in China is the Yiwu Market which has over 40,000 shops.
However, this market is mostly limited to those interested in sourcing bags, shoes, watches, accessories and textiles at extremely low prices.
At such markets, you can also hire purchase managers to simply your sourcing.
These agents offer services that include picking and dropping you at the market from your hotel.
Additionally, they help you meet other wholesalers, negotiate prices and also collect different orders in one shipment.
However, keep in mind that such agents are not responsible for any quality control at factories.
Ensuring you are satisfied with the quality of the product is entirely your responsibility.
Online B2B Marketplaces
A B2B marketplace is a digital platform where businesses can connect with other businesses to carry out their dealings and transactions all in one place. Such transactions usually include buying and selling products in bulk.
Some of the best B2B marketplaces in China include Alibaba, Global Sources, Made-in-China.com and HiSupplier.
However, when using online B2B marketplaces, there are a few things you should be careful about.
Firstly, many resellers market themselves as manufacturers, which is quite problematic if you are looking to supply products with specific technical requirements.
Only a manufacturer would be able to meet these technical requirements, which are why you should be always alert and make sure that you are liaising with a genuine, experienced manufacturer and not just a reseller posing to be one.
Secondly, as popular B2B online marketplaces have an easy-to-use platform for suppliers, the market is oversaturated, and in many cases, quality vendors tend to find it difficult to stand out as they get overshadowed.
Lastly, finding reliable suppliers, particularly on B2B marketplaces, is an extremely daunting process.
To avoid any risks, you should always make sure to separately screen each supplier by having a thorough due diligence process or, ideally, going and visiting the factory yourself.
Hiring A Sourcing Agent
You can also hire a Chinese sourcing agent to meet all your requirements and find the perfect supplier for you.
This option is extremely convenient if you are looking for products with particular technical specifications and requirements.
Additionally, suppose you are not based in China and cannot go and visit factories yourself.
In that case, sourcing agents based in China can go to factories and conduct a quality control inspection on your behalf.
Through this option, you get an experienced agent familiar with the market, can speak the language and is already well known within suppliers.
Suppose it is your first time looking for a supplier in China, and you are interested in building a long term robust relationship with your supplier.
In that case, you should consider hiring a sourcing agent to support you throughout the entire process.
Conducting a simple google search can also introduce you to many websites that have a list of reliable Chinese suppliers with good reviews.
Many websites such as Smart China Sourcing, HKTDC, China Budget Sourcing, and DHgate give you many options regarding whom to contact.
Such websites allow you to connect your business with Chinese manufacturers and provide a directory of suppliers in China.
However, many of the websites in English often end up being run by traders instead of manufacturers.
Therefore, you have to check to see if the manufacturer is genuine or not.
These checks and balances are necessary when trying to find a supplier in China, especially if you are doing so without the help of a sourcing agent.
If you do not have the time to go through extra security measures yourself, your best option would be to find a Chinese supplier through a sourcing agent.
Finding the right supplier and building a long-term relationship can do wonders for your business.
This is an extremely important decision so make sure you take your time, carry out the necessary checks and do not rush the process.
Want to make the most of your supplier relationships?
One of the best ways to get a Chinese supplier to like you is to utilize RMB payments when making deals with them.
You'll get far more leverage this way and you'll make them happy when you trade with them in times where the RMB is stronger than the USD.
Open a business account with Statrys today, and you'll get a multicurrency account that has the capability to make FX transactions in RMB for 0% FX trade commission.
What is the biggest B2B marketplace?
Should I hire a sourcing agent?
How to avoid being scammed by suppliers?