Choosing China to source products to grow your business is surely a great thought. But simply contacting any China-based supplier is not the only big step. In fact, there are a few essential things you should know before sourcing your products from China.
Table of Contents
Let’s discuss them briefly, so you get your items without many struggles at the end of the day.
Know Your Market Demand First
If any product is popular in Canada, it is not necessary that it will have a great demand in Saudi Arabia too.
Many people don’t consider this fact, and they usually face a significant loss. That is one of the reasons why you must analyze your market before ordering anything in bulk from China.
One of the best ways to find a demanding product is to see the one that is in trend in your country or specific region.
There are many online tools, like Google Trends, which can help you gain knowledge of the current trending product among men and women, or both, in your country.
Contrarily, you can watch your competition to understand what items are being admired the most? Who are their buyers? For instance, women's winter clothing is more popular in Pakistan’s northern areas than in southern parts of Pakistan due to weather conditions.
So, upon getting all this information, you will know what products to source from China with a high selling potential.
Find a Suitable Supplier in China
Once you’re clear with the market demand and product, it is time to find an appropriate supplier from China. A friendly company in terms of price, customer service, product quality, and most importantly, commitment.
Some businessmen prefer paying a visit to China to see and verify suppliers. However, this would add another gigantic transaction to their expense sheet. Therefore, act smart and find suppliers online.
Websites like Alibaba, Made-in-China, and DHgate are ideal online platforms to find suppliers to source products. You can find a plethora of sellers on these websites with different offerings. All you need to do is contact the most suitable one that matches your demand and budget.
But, keep in mind that these sites don’t vouch for any supplier, and in case something goes wrong between you and the company, you can’t claim or blame these platforms.
That is why most people trust sourcing companies to work on their behalf. An organization like Jingsourcing is there to help you find suppliers offering reasonable prices for their production. Plus, this company also takes responsibility for checking your order's quality and even delivering products to your home country.
Decide Your Payment Method Initially
If you have a sourcing company working on your behalf, you may not need to worry about the payment method, as they will guide and handle everything.
But if you are doing everything on your own, make sure to choose a legal and authentic way to pay the price for your order.
Undoubtedly, the letter of credit (L/C) is a reliable way for cross-border transactions as it includes a bank that works as a guarantor.
However, L/Cs could be revocable and irrevocable. Therefore, try your best to obtain an irrevocable L/C as it requires permission from you and the supplier in case the bank wants to cancel or change it for any reason.
But, if you are working on a revocable letter of credit, the bank can cancel the entire contract without your or the sourcing company’s consent. And as a result, you might face delays in receiving your products.
Mention Price Increase Terms in the Contract
Sometimes, when your items are under production, suppliers change the price due to changes in raw material prices. It might not affect you if the order is small, but it could add thousands of dollars to your agreed payment if your order is massive.
So, to avoid such incidents, ask your supplier in China to mention the period of the quoted price. For example, “$1,000 price valid until 90 days.” This means, if the price is paid within 90 days, the supplier cannot change the quote, even if they are buying raw material at higher prices to manufacture your products. Do not forget that this point should be discussed before sourcing your products.
And for your safe side, try your best to keep the “valid until” period for 180 days minimum. Some of the other ways to escape price changes are:
- Promise the supplier that you will source your products again if they would quote the same price.
- If the supplier has increased the price due to not mentioning the “valid until” period, ask them to promise a big discount on the next purchase and include the price validity time in the contract.
Clarify Terms before Finalizing a Sourcing Partner
Last but not least, you must be very careful and transparent with your communication. Do not assume things, and don’t let your sourcing partner do the same. When sourcing products from China, try your best to discuss your product features, specifications, delivery method, and other vital things. It is because any misconception or misinterpretation can waste your time and money.
Conclusion
If you want to source products from China, you should first find the product that fits your market needs. Then, you should see a reliable supplier, who can deliver products on time without compromising the quality.
It is also wise to proceed with an irrevocable letter of credit so that the supplier cannot deny their duty. You must also ask the supplier to add a “valid until” date to avoid a price increase later. And lastly, always communicate clearly about all the terms before entering into any contract.
Otherwise, opt for a reputable Chinese sourcing company, like Jingsourcing, to get free from all these hassles and let them handle all the complexities – from finding a great manufacturer to delivering products to your doorstep.
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About the author
Jing Zhu
Jing Zhu is the Founder of Jingsourcing.com where he also offers sourcing consultation service for foreign customers who want to develop products in China.
Jingsourcing is a leading sourcing company based in Yiwu China. Starting in 2015, they have helped thousands of importers, especially small and medium-sized businessmen, in customizing and importing products from China at competitive prices. Besides their comprehensive and quality services, they’ve also shared a lot of informative and helpful content on platforms such as YouTube, Facebook, and their blog.
