Month: March 2021

China Sourcing Agent

Elksourcing：The Buying Agent That Helps You Find the Best Supplier

Mar 31, 2021 , , by 露露

Why do business with a trading company that buys different products from different companies, stock them, and sell them for a commission, when you can work with a buying agent that will help find a supplier and directly contact them?

It is a good thing that Elksourcing is not a trading company but rather, a buying agent that does not charge commission from suppliers and will even help you get the lowest possible price for the product that you are looking for. It offers factory sourcing, a service that will help you choose which factories are best for your needs.

Your First Step to Successful Buying

Are you looking for the right factory to manufacture your products but you are pressed for time and do not know where to start? There’s no need to panic because Elksourcing will help you find the right factory by sourcing potential factories that manufacture quality products at reasonable prices. Elksourcing will help you find answers to the following questions:

Is the factory capable of making and delivering the order quantity required by the client?

Does the factory have enough experience in manufacturing the products?

Are they a reputable company?

How well are they doing, financially?

Do they have the resources and enough materials needed to produce the required products?

Auditing and Recommendations

Of course, it is not enough to investigate and gather all the data about the factory. Elksourcing’s promise as a buying agent is to help you choose the right factory for your needs, so you may expect to receive not only raw data that only tells numbers but other important details as well.

After auditing several factories for capacity, quality, and accountability, Elksourcing will also take pictures of the factory and provide independent judgments and recommendations. By doing this, it would be easier for the client to choose which factory is best for them.

Benefits of Elksourcing Service

Although some factories may have a good online presence or a professional-looking Website, this is not a guarantee that it will be able to provide you with the products you need, in the quality you want, and the time you allow. By having Elksourcing check the background and reputation of the company, you will be totally sure if you are going to buy from the factory or not. By checking the background of the company, you will know if it is indeed a government-licensed factory and not just another trading company.

With proper evaluation of a factory, you do not need to worry about quality and commissions. And with a buying agent like Elksourcing, you are one step ahead in finding the right factory for your needs.

A company needs to handle all aspects of their business in a way that will help them gain more profit. With Elksourcing, you not only get to ensure that your products’ quality is good; you also get the best rates possible.

China Sourcing Agent

Elksourcing：Dealing with a Sourcing Agent in China

Mar 31, 2021 , by 露露

One of the most important factors to consider when looking for a sourcing agent in China is the agent’s influence on different companies and factories in the country. Aside from having strong ties and connections, they should also be able to break the language and cultural barrier as these may also have a great impact during negotiations in a country with a different language and a different culture.

Fortunately, as the leading sourcing companies in China, Elksourcing has established itself as one of the most trusted sourcing agents in the country. With its good reputation, Elksourcing now has good relationships with more than a hundred factories in China, ensuring the success of your business and product sourcing needs.

Family Relationships in China

The Chinese are known for their rich culture and tight family ties. It is important for your sourcing agent to know this because of the following reasons:

·   Business networks in China may be based on familial ties; for example, the father may own the factory and 15 other relatives maybe working in it.

·   A family may be involved in one factory, while other members may be involved in other aspects of the business.

·   Other members of the family may have a different business or a factory that manufactures a product different from those that are manufactured by another family member.

Chances are, if your sourcing agent has established a good relationship with a business that is run by a family, and then the agent may be acquainted, and has connections. With other businesses or factories owned by the family. More connections mean more choices.

Good Relationships and Product Sourcing

Having good relationships with different factories, a sourcing agency will do its job more efficiently.

One of the services that Elksourcing is confident about is product sourcing. When doing product sourcing, Elksourcing establishes specifications based on samples, designs, and quality expectations given by a client. Because they have good relations with different factories, they can easily communicate these specifications and get an initial quote from the factory.

Negotiating would be more successful when the agent knows the owners or heads of the factory, and chances are they would get better prices and lead-time. Elksourcing also works with factories to develop the samples; then, the samples are evaluated through compliance tests.

If problems on quality would result from the test, then Elksourcing would also work with the factory to improve the samples to be able to meet the client’s expectations.

Climbing the Ladder of Success

Selling could be a success if you know what to sell and you know where to get your products. But given your limitations, you cannot do everything all by yourself. It is not even enough to do research alone regarding where to look and which factory to contact for your specific needs. Fortunately, Elksourcing will always be ready to help you with your sourcing product needs in China.

With Elksourcing’s established relations with different factories and its commitment to meet their client’s requirements, they are indeed the sourcing agent to trust and go to for all your sourcing needs.

China Sourcing Agent

Elksourcing：Things to Consider in Hiring a Sourcing Agent in Guangzhou

Mar 31, 2021 , by 露露

Guangzhou is the largest and oldest foreign trade port in southern China, and the only port in the world that has been thriving for more than 2000 years.Entrepreneurs who want to source products or materials from Guangzhou should keep in mind certain things when finding a sourcing agent Guangzhou.

1. Track record

A good sourcing agent in Guangzhou has the track record to impress potential clients. Track record may pertain to the number of customers served by the sourcing agent, as well as the overall performance of the agent in matching businesses with the right suppliers.

Organizations that want to make sure about the sourcing representative they hire in Guangzhou start out by ordering a sample product or item. They then judge the sourcing specialist according to the quality of the product delivered as well as the speed by which the delivery was made.

2. Honesty

Sometimes, it pays to have an honest sourcing agent than a capable agent who is not that trustworthy.  It is an open secret that some sourcing agents get commission from suppliers. This relationship increases the chances that an agent will neglect quality in recommending a supplier to a client, as the agent will endorse a supplier who can give him the highest commission.  

Sourcing agent Guangzhou must be honest enough to present a truthful sourcing report to their clients.  Businesses should run a through background check on a sourcing agent that they are considering to hire. Investigating the track record of the agent would go a long way towards ensuring that a company nabs the services of an honest Guangzhou representative.  Likewise, firms should specify in the contract signed with the sourcing agent that hidden commissions are not allowed.

3. Can Communicate Well

Perhaps the biggest hurdle to doing business in China is the language barrier. Not everyone in China is proficient in English, or can communicate well using the global language. It is thus a common occurrence for sourcing representatives in Guangzhou to deliver wrong items or poor quality products to their clients because of miscommunication. This only underscores the need for companies to hire a sourcing agent Guangzhou who can speak and write fluent English.

Shopify Tutorial

Elksourcing：Four Things to Consider in Supplier Verification China

Mar 31, 2021 , by 露露

While the Chinese are generally regarded as trustworthy and hardworking, there are still some people in the country who are not to be trusted when it comes to business. These people work in various fields particularly in the manufacturing sector. Foreign firms that are bent on sourcing products in China must exercise caution and prudence in entering partnerships with suppliers in the said country. A thorough supplier verification China is necessary towards ensuring that enterprises get the services of a good and trustworthy supplier.

Business contact numbers

Companies can verify if a supplier in China is legit by checking the business address of the supplier. Legitimate businesses and production firms in China use a landline phone instead of mobile phones. If a supplier uses a mobile phone for business purposes, there is a good chance that it is a fraud.  There is no restriction or limitation to the number of mobile phone numbers a person or business in China can own, and this is taken advantage of fraudulent suppliers as they can readily change mobile numbers anytime they want, or when they attempt to run away from a client who has given them payment.

Business licenses

Another important facet of supplier verification China is to check its business license. Legal Chinese firms have a unique company registration number as required by the law. If a potential supplier is unable to present a business registration number, then it can be concluded that it is a fake. In checking the veracity of a supplier’s registration number, a business may contact the local office of the Bureau of Industry and Commerce.  There are also specialized services companies in China that businesses can contact to validate the authenticity of a supplier’s business registration number.

Extra low prices

Although China is an attractive sourcing venue because of the low costs of labor and products there, this is not to say that businesses should tap suppliers that promise outrageously low rates. Many scammers in China earn a lot by selling fake products at low prices to overseas buyers. Companies that don’t practice due diligence in evaluating prospective suppliers could fall prey to these scammers.

Payment terms

Supplier verification China can also focus on the mode of delivery and payment terms demanded by the supplier.  Truthful suppliers deliver goods through formal channels. On the other hand, scammers refuse this mode of delivery as they can be subject to examinations from Chinese customs.Likewise, reputable suppliers accept letter of credit payments while bogus ones don’t. 

Shopify Tutorial

Elksourcing：Essential Tips to Achieve Quality Sourcing China

Mar 31, 2021 , by 露露

China has shed its image as a producer of cheap but poorly manufactured products.  Through the efforts of its government, the Chinese has attracted countless of foreign companies for sourcing.  Firms abroad obtain products from China because of factors like low-cost labor. Businesses that are into quality sourcing China must be conscious of certain things when finding the right sourcing specialist in the country.

Research

Entrepreneurs or firms must have a clear idea on the products they would like to order from China. Product drawings and specifications can help a sourcing agent better understand the requirements of the client.

The Internet is a good place to start in looking for a sourcing representative in China. Most foreign buyers visit websites specializing in Chinese products and suppliers to get a list of potential purchasers in China. Some buyers even go to the extent of visiting websites or social media accounts of purchasers in hopes of learning more about the prospective sourcing representative.

Bigger businesses also send employees or representatives to exhibitions held in China. Exhibitions are a one-stop shop for entrepreneurs looking for potential supplier. Exhibitions in the big cities like Beijing, Shenzhen and Shanghai gather the most number of participants. The most reputable quality sourcing China agents also participate in this type of gathering. Firms and entrepreneurs should prioritize exhibitions with at least 200 exhibitors and attended by 20,000 visitors. Exhibitions also enable buyers to have a face-to-face meeting with potential purchasers.

Selection

Businessmen or purchasing officers should talk face-to-face with potential suppliers first before signing a contract. It is also encouraged that a visit to the local factory be made to give the client a better understanding of how the potential supplier works. A visit to the local factory will also give an idea on the type of machines used as well as the number of personnel working on the product.  

Stringent selection also requires clients to ask for recognizable standards of quality like ISO. The track record of the purchaser should also be scrutinized particularly in terms of exporting overseas.

In selecting sourcing representatives, most businesses usually put a premium on the costs. However, not all sourcing agents in China that can promise the cheapest costs for their clients are to be trusted. Most of the time, cheap products also equate to poor quality. When selecting a quality sourcing China agent, quality should be the top priority all the time.

China Sourcing Agent

Elksourcing：What Sourcing Agents Can Do For You?

Mar 31, 2021 , by 露露

What does a sourcing agent do? For one, the agent will assist a company in finding sources for products and supplies at the lowest cost possible. This will help the company save time and money in production. Local companies can take advantage of sourcing agents to find the best prices. They have connections to domestic companies so they know where to find the best supplies. Overseas companies will find sourcing agents very useful as well. For instance, an overseas company who wants to buy supplies from China can use sourcing China to locate companies they can work with.

The agent will first assess the company’s needs and meet with suppliers to check if they are able to meet the requirements of the company before ordering supplies from them. Sourcing agents will do all the work for you, including doing inspections and making evaluations to address concerns that might affect the quality of the products that they supply.  

Companies will find that working with sourcing China agents will be a lot more convenient, especially if you are based overseas, because the agents are more familiar with the laws and customs in the country. You can have the sourcing agents deal with issues like import and export tariffs, and taxes. If you let someone who is unfamiliar with the norms and practices in the country you are buying supplies from handle the task, there will always be a risk of a holdup somewhere along the supply chain.

The job of a sourcing agent is not always easy. The job requires knowledge of multiple languages, superb negotiation skills, coordination skills, and good business sense. Corruption in certain regions can also complicate negotiations. That is why having someone familiar with the culture and business in the country is very important. A good sourcing agent will be able to cut through the red tape quickly and efficiently so as not to cause any more delays. 

Therefore, if you are an overseas buyer planning to buy supplies in China, it will be best for your company to use the services of sourcing China agents. Some of them work for a single employer while others may represent a number of companies. You can find them in different ways, such as searching on Google. Some are also registered with government offices and trade associations, so you may want to try looking through reliable authorities as well.

Shopify Tutorial

Elksourcing：Why Chinese Suppliers Require MOQ and What Can You Do?

Mar 31, 2021 , by 露露

Minimum Order Quantity (MOQ) requirement specifies the lowest quantity of a certain product that a supplier is willing to sell. If the importer cannot reach the MOQ requirement, then the supplier is not willing to enter production. Suppliers in China tend to have fairly high MOQ requirements. Why Chinese Suppliers Require MOQ? What can you do about it?

Reason 1 – Low Profit Margins Require Large Volumes

Chinese suppliers tend to have very low profit margins, as low as 2-3% is common. Price competition is fierce and Chinese businesses in general tend to be focused on keeping a low price rather than improving product quality and service level. Low profit margins require the supplier to produce a large quantity of products in order to break even. 

Reason 2 – Material Suppliers also Require MOQ

I’m sure most Chinese suppliers would be happy to do business with smaller buyers if they could. In fact, I know that many of them dislike the fact that a high MOQ requirement forces the suppliers to rely on a smaller number of large companies that could walk away with their business without notice. The problem is that the MOQ is not decided by the supplier alone, but also by its subcontractors. Every supplier need to purchase materials and components from local subcontractors, and every subcontractor requires the supplier to purchase a certain quantity. The supplier’s MOQ requirement is thus a reflection of the MOQ requirements imposed by its subcontractors.   

Reason 3 – China Suppliers Rarely Keep Stock

A common misunderstanding is that Chinese suppliers have warehouses filled with export quality products ready to be shipped to the next buyer. It’s not true. In fact, most Chinese suppliers don’t even purchase materials and components until an order has been placed. Below I explain why:

Storage is not free and keeping a large stock would force the supplier to increase the prices. Empty shelves helps the suppliers to keep costs down and stay competitive. 
European and American product standards (i.e. CE, RoHS and FCC) don’t apply in the other parts of the world. While many Chinese suppliers are manufacturing products that are in compliance with Western product standards, they are certainly not mass-producing them before they receive an order from an American or European buyer. Product standard compliance comes at a cost (more expensive material and components) and it would leave the supplier at a disadvantage if they mass-produced products that are compliant with Western standards. 

How can you lower MOQ?

The MOQ requirement cannot simply be negotiated away or vanish. While some suppliers may accept a slightly lowered MOQ, requesting it to be removed completely is the same as asking your supplier to lose money for the sake of your business. Many importers try to play the “my orders will be larger in the future” card, but most suppliers hear this on an almost daily basis and only a fraction of their buyers can back up the claim in the end.

However, there are ways that can satisfy the supplier at the same time as you can order a smaller quantity:

Use components, materials and colors on several products. This way the supplier can limit the number of subcontractors involved.
Coordinate your orders with those of other buyers.
Import products that are not regulated in your country and/or market. This way you can purchase products that are originally produced for the Chinese market.

Shopify Tutorial

Elksourcing：Price Negotiation with Chinese Suppliers

Mar 31, 2021 , by 露露

The whole point with importing from China is the cost advantage. It’s cheaper than buying from West and certain products simply cannot be found outside of China. While China is slowly losing its position as a the world low cost factory, importers still have a price focus and negotiation is part of the process. The Chinese love to bargain, it’s part of their culture and even expected in many situations. However, there are plenty of misconceptions and mistakes made my importers – especially small ones.

The supplier must also make a worthwhile profit

Rather few importers are aware of the (very) low profit margins that most Chinese suppliers struggle with. It’s simply not possible for them to offer a 10 – 20% price reduction, unless the price was way off to begin with. Asking them to lower the price with anything more than 0.5% – 2.0% is the same thing as asking them to lose money on your order.

Some importers simply cannot accept this and keep pushing for major price reductions, sometimes only for the sake of it. If you’re lucky, the supplier will simply tell you to get lost in a nice way. If you are less lucky, the supplier will give in and offer a price reduction, and adjust the quality accordingly. The likely outcome is a batch of products with horrible quality and a large number of defective units.

However, I’m not saying that should not attempt to negotiate the price. I encourage it, if only for the sake of showing that the supplier that you have clear limits. That can discourage them to make any bold moves on the price in the future. All I’m saying is that you shouldn’t expect price to be cut more than a few percentage.

Price Negotiation is all about good timing

You must give incentives to people if you want them to give you something in return. The same applies when negotiating prices in China. Keep in mind that a supplier will not reduce the price because they want to be nice; it’s a cold calculation that’s aimed at getting your order. If a supplier already knows that you’ll place your order regardless of price, they no longer have an incentive to cut back on anything. This is very common, and may occur in any of the following situations:

When a supplier knows that you don’t have any additional suppliers to fall back on
When you’ve invested a lot of time and money into product samples and development
When you are just about to place a new order
When you need products fast. This means the supplier can simply hold out until you become even more desperate.

When any of the above occurs the supplier is fully aware that you’ll place your order with or without a price reduction. For natural reasons, the supplier is very unlikely to offer even the slightest reduction when this is the case. On the contrary, some suppliers even consider such a situation an excellent opportunity for a price increase!

Be ready to leave the table and walk away

Many Chinese suppliers take a “you want this order more than we do” approach to negotiations. I’ve found that this strategy works very well when reversed. The key to success is to always make the supplier feel that you are well prepared and ready to leave the table and take your order elsewhere if they refuse to meet your demands. Although, you’ll have to leave many tables if your demands are unrealistic to begin with. This can be achieved by doing the following:

Always have plenty of supplier options available until the moment you place your order. This means that you need to negotiate with many suppliers at a time.
Never make any promise or confirm future orders. This makes the supplier feel in control.
When you’ve withdrawn from a negotiation, then that’s it. If you keep coming back you’ll like you’re out of options. This certainly doesn’t give the supplier any incentive to reduce the price.

Avoid importing products with razor thin profit margins

Since you’re reading this I assume you are not a purchasing manager working for Wal-Mart or Tesco. Thus I suggest that you forget about competing with large multinationals in terms of pricing. Instead I advise you to find a product niche where you can enjoy a fairly high profit margin. This is becoming especially important now since the “China price” is under a lot of upward pressure, mainly due to rising wages and inflation.