Sourcing from China? Here Are Some Tips & Tricks
If you're in search of some tips and tricks on sourcing from China, look no further! This article offers plenty of advice to guide you along the process.
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Opening a Shopify store is a great way to launch your own business with minimum investment or launch a side hustle while on a busy schedule.
But with more than 800,000 e-commerce stores now utilizing Shopify, and hundreds of thousands more using similar e-commerce platforms, competition is stiff.
Having a strong, attractive website, good customer service, a unique business plan, and effective marketing are all important. But perhaps the best way to help your store stand out from the crowd and succeed is to carefully source the products that you're selling.
Many e-commerce stores have a reputation for selling low quality, inexpensive products. However, there are plenty of quality suppliers out there that you can use to offer better products to your customers. The trick is picking them out from the millions of manufactures you could choose from.
If you're ready to start sourcing from China for your own e-commerce store, keep reading for a few smart tips and tricks.
Take Your Time
Rushing into finding e-commerce sourcing is a big mistake.
When it comes to sourcing products, finding the right supplier is a must. Without one, you may wind up facing shipping delays, poor quality products, and plenty of unhappy customers.
Start your search for the right supplier early. Even if you aren't sure exactly what types of products you'd like to sell in your e-commerce store yet, you can still start researching sources.
In fact, if you're undecided about choosing products, finding a source first can be a big help. Finding a reliable source that you're confident working with will allow you to then choose products that you know you can trust to be of good quality and arrive on time.
Look for Online Ratings
Many e-commerce sourcing platforms allow users to leave ratings for suppliers that they have previously worked with.
Compared to learning about sources from the sources themselves, these ratings are a great resource. The ratings will give you a real look at what these sources may be like to work with.
Look for red flags like issues with shipping or product quality.
However, keep in mind that customers who had a bad experience are more likely to leave a review than those who had a positive experience.
Because of this, a source with a few bad reviews may not necessarily be a bad choice. Instead, it could mean that those reviews represent a few unhappy customers, while other, happy customers chose not to leave a review.
Verify a Suppliers Credentials
Another great way to weed out bad suppliers when searching for China product procurement is to check each supplier's credentials.
There are a few things you'll want to look for in order to do this.
First, check to see if the supplier is in fact an actual factory or manufacturer, as opposed to a middleman.
Working through a middleman can lead to a number of problems. First, it is likely to raise your costs.
When you work directly with a factory or other manufacturer, you'll pay directly for the products. Then, you'll sell those products to your customers for a higher cost, giving you your profit and covering your own costs, like shipping, storage, and more.
However, when you work with a middleman, the added step means higher prices for everyone involved. The middleman pays the manufacturer and then charges a higher cost for you to buy it. In turn, you'll need to raise your costs even higher for your customers.
Higher costs not only cut into your profits but can also cause your products to cost more than competitors, which might hurt your business.
Another benefit of checking that you are working directly with a manufacturer is a chance to get real information about products. This includes more info about ingredients and the production process.
Finally, this can also help shorten your shipping times so that you can get products to customers faster.
When checking a supplier's credentials, check that they have the technical knowledge necessary.
The last thing you want to do is discover a manufacturer can't handle your volume. Or discover that a manufacturer isn't experienced in shipping products through custom checkpoints.
Ask About Minimum Order Quantity
If you'll be opting for traditional shipping rather than dropshipping, you'll have a few more factors to consider when choosing a source.
One big one is the amount of product that you plan to order.
Many suppliers and manufacturers have a minimum order quantity that must be met. If you're planning to order less than the minimum, this won't be the right option for you.
Before you begin diving into costs, shipping times, and other logistics, be sure to check whether or not there is a minimum order quantity, also known as an MOQ.
Depending on the supplier, there may be some room for bargaining.
Your best way of getting a lower price is by increasing the number of products that you plan to order.
If you are confident that you'll be able to sell a larger number of products, ask the supplier whether increasing your order may allow you to get a lower price per piece.
This might allow you to lower your price that you're passing on to your customers so that you can sell more. Or if you know that your product will be in high demand, may simply help you earn higher profits.
Understand the Laws Regarding Prohibited Imports
Anytime that you plan to ship products across country borders, it's important to keep in mind the laws in both the source country and the destination.
When it comes to China product procurement, you'll need to be aware of certain laws and restrictions that could make importing some products or quantities of products illegal.
Reputable eCommerce sourcing companies will handle this part for you. Many companies will only make available products that are legal to import into your home country and will warn you if products are not.
However, it is still up to you to make sure that all products you are choosing to import are legal in the U.S.
Some examples of products that cannot be imported into the U.S. from China include:
- Counterfeit products
- Any products with the illegal use of trademarks
- Drug paraphernalia
Most products that eCommerce stores choose to import, like clothing, beauty products, or home decor, aren't subject to these laws and regulations. But keep in mind that if trademark usage is at all in question, it could mean that your products will undergo scrutiny when they reach U.S. customs checks.
Be Aware of Differences in Production Regulations
Because of differences in product regulations and government oversight in different countries, products produced outside of the country may not be up to the health and safety standards of the U.S.
For instance, while the U.S. has banned the use of lead in paint used on children's toys, other countries, including China, continue to use lead-based paint.
Not all products will be made using lead. But it is important to check with the manufacturer and/or the source that you are thinking about ordering from before you do so.
Ask about the production process and the specific ingredients or supplies used to produce the item you're looking to stock.
Finding a Balance Between Quality and Cost
One of the biggest challenges that stores face is finding the right balance between quality and cost.
Purchasing the cheapest products you can find usually means getting the lowest quality. This can lead to a number of problems, from items arriving broken to unhappy customers. In turn, this will cost you as you lose your customer loyalty or have to pay to replace products.
While sourcing the cheapest products is a mistake, choosing the most expensive ones may not be the right choice either.
Besides raising your own initial supply costs, this also means raising prices for your customers.
If your competitors are offering lower prices, even if the quality of their products is lower as well, you'll likely lose sales.
Balancing product quality with cost largely comes down to considering the types of products you're buying, your target customers, and your competition.
Depending on the type of products you're sourcing, quality may be less important than cost.
For instance, a mid-quality t-shirt at an affordable price may be more attractive to customers than a higher quality product at a higher price. However, customers may be more likely to pay more for luxury products like purses, sunglasses, or home goods if they can see that the higher price also means higher quality.
Determining a Fair Price
If you're struggling to decide whether a manufacturer's cost seems fair, it can be helpful to calculate what the base price to produce a product may entail.
Start by pricing each of the ingredients or supplies that go into producing products. For example, if you're going to be ordering t-shirts, do some research on the costs of wholesale cotton in China, as well as the cost of thread or vinyl transfers, depending on how the shirts will be decorated.
Next, research production costs. You'll want to look into fair market value on paying employees and running certain equipment involved in the production.
Estimating these costs will give you a general idea of what it costs to produce a product. You can then use this to determine whether a manufacturer is charging far too much for a product.
But you can also use it to spot manufacturers that may be offering a suspiciously low price. This may indicate a far inferior product that you won't want to source.
Understand Your Full Supply Costs
When you're balancing the cost of products versus the quality, make sure that you fully understand what your costs consist of.
It isn't just the product that you'll need to pay for. You'll also need to pay the shipping costs from the manufacturer and any importation fees.
Calculating these costs will help you to better understand what you'll be paying for each product. Shipping costs may vary widely from one manufacturer to the next, and can greatly affect the overall cost of the products.
Be Clear About Your Expectations
When you begin communicating with the suppliers that you have shortlisted, make sure that you're open and honest about your needs and expectations right from the start.
Being coy or allowing a company to describe what they can offer you may waste your time if their production can't meet your expectations. It's best to decide right from the start whether they may be a good match.
Some things that you'll want to be honest about are the number of products you plan to purchase. You should also be upfront about the quality that you're looking for and your expectations about shipping times and costs.
You may choose to lower your standards on certain aspects if a supplier meets your other needs. But this will still help you avoid wasting time on manufacturers that can't come anywhere near what you're looking for.
Choosing the Best Manufacturers When Sourcing from China
When it comes to sourcing from China, choosing the right manufacturer is important. These tips can help.
Researching market costs will help to determine a fair value for products. Being aware of import restrictions will help you avoid delays and fines. Researching online reviews of suppliers can help you sort the good from the bad in Chinese manufacturers and suppliers.
If you're looking for more help launching your own successful Shopify store, check out the rest of our blog for more content like this.