Month: April 2021

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Elksourcing：Good Practices in Finding a China Manufacturer

Apr 19, 2021 , by 露露

When most buyers plan on identifying a new supplier, they are usually tempted to focus on the best price. However, concentrating only on low costs can hurt you in the long term. That’s because shaving a few cents off the price of a product is no help if the quality is below standard and the component or material does not arrive when you need it.

In this article, I’d like to share my experience of good practices in finding a manufacturer in China.

1. Decide what you want to produce – This is where a business plan comes into play? Here is a sample clothing line business plan template you can use. The first step is to decide on the type of items you want to manufacture.

This would give you an idea of the type of manufacturers you should look out for. If you want to manufacture denims for instance, you have to look out for a manufacturer that has the required equipment to produce denims.

2. Determine order quantity – Now that you know how much you can spare for production per piece, it’s time to figure out how many pieces you want. Manufacturers in China usually have minimum order quantity so you have to know if you would be able to afford the minimum quantity required.

3. Search suitable manufacturers – There are two ways to do this, you can either search online or offline. To search online, you can visit major B2B websites such as Alibaba, Global Sources, Made-in-China. You will find hundreds of suppliers who claim capable to produce your products.

To search offline, you can visit China, or choose to use a professional agent who would carry out a research on your behalf and link you with a suitable manufacturer based on needs. When selecting an agent, it is advisable to use someone that is very experienced, trusted and reliable. You can ask people that are already in the business to recommend someone that they trust.

4. Screen selected manufacturers – When you have chosen some manufacturers that you wish to work with, don’t just jump into making decisions, you should find out as much information as you can about them before you make your decision. Ask as many questions as you feel would be useful in helping you make your decision.

5. Get references and check them out – While this may seem simple enough, following this rule will help you eliminate about 90% of the potential trading partners you may find on sites like Alibaba or Global Sources. Ask the person whom you’re emailing with to provide you references of others in USA or Europe that they have done business with directly, who you can contact for a reference. It’s understandable if the supplier replies that they cannot tell you all of their clients’ names or brands they are making, but they should definitely be able to provide at least one or two references. When you check them out, set up a phone call instead of just a casual email. You’ll learn very quickly with whom you’re dealing. If the supplier cannot provide you with one genuine reference…a red flag.

6. Send a 3rd party to perform China supplier verification – These days there are a whole list of professional QC companies in China who can provide you a detailed report by sending someone firsthand to visit your potential supplier. You can usually get this done for around $200 and let me tell you…it could end up saving you a fortune!

7. Request product documentation – Ask your supplier if they can provide you some documents related to their quality control, or product safety standards, and see what they come back with. You may ask for things such as a “quality control checklist” for the product in question, or for testing reports showing that the materials being used in the product are safe and legal for your market. If the supplier avoids this request, or has no clue what you’re talking about, don’t go any further. A professional factory or sourcing company will be highly familiar and responsive to such requests.

8. Qualify the manufacturers them – Now, you should be able to qualify the manufacturers to choose the final one. You can choose based on quality level, supplier verification, capability, capacity and the communications, and what you find from the reference.

9. Go with your gut – You don’t need to be an expert in buying from China to know when you have a “bad feeling” about something. Feel strange that the supplier is asking you to make money transfers by Western Union? Is the name on their bank account different from the company name? Does the supplier seem to avoid your simple and direct questions? All of these are signs of a bad partner. Don’t rationalize an obvious lapse in professionalism because you feel you’re “locked-in” to one supplier.

10. Ask for samples – Next, you should ask for samples to be made and sent to you so that you can actually see what the products would look like. You would be able to look at the texture and quality of the fabric as well as the way the dresses are sewn.

11. Pay attention to quality – When you receive samples, what is your opinion of the quality? Does the item seem “just alright,” flimsy, cheap or have some other malfunction? If a supplier is willing to send out a sample that has quality issues, then you will definitely not get what you are expecting when you place an order. NEVER accept the excuse that “Oh, the sample is just like this, but the mass production will be better”. That is a joke in business world.

12. Negotiate terms and sign contract – When you are satisfied and convinced that you want to work with a particular manufacturer, you can now negotiate terms and when you have come to an agreement, you can sign a contract with them. A contract is very necessary so that you can protect yourself and so that the terms of the agreement can be strictly adhered to.

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Elksourcing：4 Ways to Find Reliable Suppliers in China

Apr 19, 2021 , by 露露

Many buyers are probably familiar with the stress that comes with finding reliable suppliers in China. Especially, when there are hundreds of suppliers claiming to have what you need. How do you know the suppliers you have chosen are reliable? In this article, I’d like to share you 4 main ways to do it.

1) B2B Sourcing Platforms

The biggest platforms are Alibaba, AliExpress, Made-In-China, and Global Sources. Keep in mind that your best prices and long-term relationships with suppliers will unlikely come from these sources. Sourcing platforms are directories, which consist of suppliers who pay fees to have their products displayed on the site.

There are thousands of suppliers and millions of individuals browsing them. If you do that math, you’ll realize that many suppliers will get hundreds of RFQs a day, unfortunately for them; more than half of the individuals submitting RFQs are just browsing, or low ballers who aren’t serious buyers. And unfortunately for some buyers, they are not taken seriously either. 

If you commit to finding your suppliers through a platform; stay patient and do a lot of digging on your end before expecting to receive a competitive price.

2) Referrals

A great way to find a trusted supplier, like in anything else, is word of mouth or through a referral. If you’re fortunate enough to already have connections in China or have a network of companies and individuals working with great suppliers and manufacturers, ask them to introduce you to some of these contacts. 

Admittedly, this isn’t the most time efficient method, but networking and building connections is always good idea, so it doesn’t hurt to try!

3) Trade Shows

Attending Trade Shows in China is a great way to find suppliers. Unlike online sourcing platforms, you can start building relationships right away. Guanxi, translated as relationships, is an essential part of successfully doing business in China. 

Trade shows give you the opportunity to shop around, meet suppliers face-to-face and decide what you like and don’t in the same day – saving you time from having to wait for responses online. 

However, there are some disadvantage to consider: the costs associated with traveling to China, and the time lost away from your other priorities. Especially a pricey expense if your trip is unsuccessful. 

4) China Sourcing Agent

The other method is working with a China sourcing agent, one that you can trust and have built relationships on your behalf. Whether you are located in North America, Europe, or even Asia, it helps to have a dedicated agent in China representing you. 

One of the biggest benefits working with a trusted sourcing agent in China is that they represent you (the buyer), not the supplier. It is the job of the sourcing agent to find you trusted suppliers and factories, negotiate terms and prices, as well as finding and avoiding common hidden costs on your behalf. 

Working with the right agent will save you both money and time; helping you avoid costly trips to China, protecting you from fraudulent businesses and scams, and find you reliable suppliers that are right for you.

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Elksourcing：Procedure of a Quality Inspection

Apr 19, 2021 , by 露露

For the importers who source from China, more and more realize that it is essential to arrange quality inspection for the products before they leave China. In most cases, the importers choose a third-party QC company to do pre-shipment quality inspection. In this article, I’d like to tell you the basic procedure of a quality inspection.

1) Communication of Requirements

The purchaser describes his products: specifications, dimensions, function, appearance, labeling, packaging… More precise information is provided, the more you can utilize the inspection. If possible, an approved sample can be sent for the inspector’s reference.

2) An inspector goes to the factory

After all products are finished and at least 80% packed, an inspector (or several inspectors if necessary, in most cases, one inspector is enough) goes to the factory.

3) Quantity verification

The cartons are counted, to check if the whole quantity is presented. Then the inspector randomly selects a few cartons, opens them, and checks their content.

4) Random selection of samples

Some samples are taken from each of these cartons, totally randomly. The inspector follows industry-standard statistical rules to ensure his findings are valid.

5) Cosmetic and workmanship check

These samples are checked thoroughly for visual defects. A defect is an imperfection on the product or its packaging. The statistical rules provide a maximum number for each type of defect. If there are too many defects, inspection result is failed.

6) Conformity verification

The inspector also checks if the goods presented by the factory correspond to the purchaser’s requirements. For example, the products might be too small, in the wrong color, incorrectly labeled, or insufficiently protected. If necessary, some tests are performed with the factory’s equipment. Tests vary according to the nature of the products, it’s mandatory for electrical products.

7) Function check

The inspector performs function check based on instruction manual and normal usage situations, to judge if the products conform to what are described on instruction manual, and what are expected for normal usage.

8) Reporting

The inspector issues a report that describes the situation and illustrates it with photos. It documents the findings about presented quantity, visual defects, conformity to requirements, and on-site tests. Also, a PASS / FAIL result will be shown on report.

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Elksourcing：Tips about Verifying a Chinese Supplier

Apr 19, 2021 , by 露露

In the industry of importing from China, it is easy to find many Chinese suppliers on Internet, such as B2B websites, however, it is uneasy to find a good one, one that meets all of our requirements. In the online showroom, the supplier looks perfect, but it may not be. In this article, I want to share some tips about verifying a Chinese supplier.

1). Network preliminary screening

We can Google the supplier’s name to see if there is any information on the Internet that is detrimental to the company. If so, there is no need to continue, try to find other suppliers. Even if it doesn’t have any negative news on the Internet, that doesn’t mean he’s trustworthy and reliable. It needs to be verified in other ways.

2). Entrust a third-party company

Many companies in China can do credit checks on suppliers and can entrust these companies to help you confirm whether the suppliers are trustworthy. You can also assign your other suppliers to do the work for you.

3). Ask from the supplier’s clients

It’s a very effective way when you can’t go to China for field inspection. Many clients are willing to recommend their good suppliers. You can ask your supplier for the contact information of one or two of its clients. You can call them personally to confirm whether the supplier is worthy of cooperation.

4). Ask for product samples

You can also ask the supplier for samples to check whether they meet your requirements. However, it is ideal to know that this method is only suitable for honest suppliers. This method determines whether the product they are selling meets your requirements and is not valid for fraudsters. You can’t guarantee that the goods they send you are of the same quality as the samples they send you.

5). Go to China, visit factories, do field research.

If you have the conditions, you can go to China and have a real experience of the supplier you want to cooperate with in the future. If you cannot do it, you may use a trustworthy sourcing company to do it on behalf of you.

How To Import From China

Elksourcing：6 Common Mistakes for Sourcing in China

Apr 19, 2021 , by 露露

Over our over ten-year experience of sourcing in China, we have come across some manufacturing nightmares that have happened in China. Here are 6 common mistakes we want to share with you.

1) Picking your partner based solely on price

This is by far the most common and most disastrous mistake we see. And it’s easy to see why. In a world where incremental margin shifts can literally make or break profitability, it’s important to be price sensitive. But it’s also important to be price-savvy. Extremely low prices should generally serve more as a red flag than as an enticement. Cheap prices are often accompanied by cheap products, unresponsive vendors, or defective or hazardous materials. This is what many jaded entrepreneurs and small business owners have termed as, “The China Cost of Doing Business.” 

2) Failing to verify your partner’s experience 

When searching out a knowledgeable and reliable sourcing partner, be sure to do your due diligence. Ensure that your partners speak Chinese fluently and maintain facilities there. Check with other importers or trade associations in your industry. Ask to speak with some of your sourcing partner’s other clients. 

3) Believing that a Chinese contract holds the same weight as an American contract

Similar to mistake #1, this blunder generally occurs when an eager customer tries to lock in a cheap price or tries to save money by circumventing a middleman and dealing directly with Chinese factories. We regularly see Chinese suppliers commit to unrealistic prices in order to secure a deposit. Once a customer has committed, the price goes up. Unfortunately, many such customers not only face losing their deposit, but they also lose critical lead time and risk losing valuable assets such as moulds or machinery. In such instances, there is very little legal recourse for the customer.

4) Expecting that things will run smoothly

Every project has its unique set of challenges and opportunities that need to be anticipated and dealt with accordingly. By recognizing and accepting the reality of occasional hiccups, you will be more apt to seek out partners that will actually navigate and resolve issues instead of abandoning you at the first sign of miscalculation or trouble. With more than a decade of experience in China sourcing, we have learned to eliminate many of the pitfalls in sourcing and manufacturing—but there are invariable challenges that arise no matter how much experience or preparation you have. Experience has shown that it is exponentially more important to plan for obstacles and avoid them, than to expect that they will never arise.

5) Assuming that the end product will match the prototype

A less common but equally disappointing mistake occurs when businesses ship off prototypes or mock-ups to Chinese manufacturers and assume that the factory or sourcing partner will be able to replicate everything to a T. The reality is that anytime a product makes the transition from prototype to production; there will be differences in the final product because the manufacturing processes are different than the prototyping processes. Each manufacturing process involves unique advantages and limitations. For instance, injection-molded parts will have injection gates on the parts—it’s simply part of the process. Conversely, milled parts have no gates. Milling is often used in prototyping whereas injection molding is used for large-scale manufacturing. By choosing a partner that shows sensitivity and awareness to such differences, you can work collaboratively to select processes that are both feasible and economical.

6) Assuming that your partner will honor their estimate

This mistake is similar to mistake #3 in that, as a customer, you have very little legal recourse when it comes to Chinese vendors, contracts, and estimates. Certainly, you can always take your business elsewhere, but, as discussed earlier, there are often serious drawbacks and repercussions associated with pulling out after you’ve committed. The best option is to choose the right partner from the outset. Even if your product must ultimately be outsourced by your partner, the right partner plays a critical role in maintaining leverage over the supplier. Not only will a quality partner have established contacts with reputable manufacturers and suppliers, but those companies will also have much more to lose than just your business if they renege on your contract or unjustifiably alter pricing.

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Elksourcing：Tips about Finding Reliable Suppliers

Apr 19, 2021 , by 露露

There are a number of factors contributed to the success of your business. Among them, the crucial part should be locating a reliable supplier for a product you have in mind. Either you want to import it or find it in a local market. No matter which you choose, you have to identify a reliable supplier, which should be the key to run a smooth business. But how will you find such a supplier?

1). Getting you prepared

You will have to develop a group of suppliers who can give you happy deals without any aversion. The most important things you must look for should be the price, quality, and speed.

Price: Finding suppliers with low price is a difficult task. There’s a chance of importing low-quality products. If you’re looking for a good customer response, then think very little about cheaper products. But, if you want to make a large purchase, then cheaper suppliers with good products can be found.

Quality: Stumbling into better products depends on your instincts. A little homework would be nice to know if the product of your choice can actually reach your standards. For instance, after finding a reliable supplier, give your product a trail in the market and see if customers are falling for it.

Speed: If you are thinking about importing on a small scale then importing from online sources like Wal-Mart, E-bay and Amazon.com is a better option. Since it will take a wholesale supplier at the same time to process a deal of a few dollars to a deal in thousands of dollars.

2). Categorize your supplier

Manufacturer: Approaching companies directly. Many retailers execute deals with sales representatives of a company. One of the advantages of this type of supplier is lower prices. Another advantage is that you will be able to lower the prices on your products and thus out pricing large chains of supplies. But if the manufacturer is from another country then freight charges may not worth it. Moreover, it also depends on the quantity. Importing from manufacturers in large quantity is a better option to lower the price on your products and differentiate yourself from your competitors.

Domestic Wholesaler: There are wholesalers and distributors who import foreign goods in great quantities and then operate at a domestic level. Their prices are comparatively higher but the good thing about them is: they can entertain small orders. Selecting a domestic supplier is a good option if you don’t have any familiarity with foreign sources. It saves your energy and time. You will not have to run quality checks on shipped items because they have already done it. But, you can always improvise. Start with a domestic wholesaler, and then continue to grow and execute deals with foreign wholesalers or manufacturers.

Craftsmen: If you’re looking for unique products, such as handmade rugs or cultural dresses, manufactured by craftsmen then it’s a unique idea. However, such products are hard to come by. But you can find such craftsmen in trade shows or through sourcing agents.

3). Searching for the right star to shoot

If you are not sure how to start, then perhaps some reading might help you. Go to your local library and ask the librarian to find publications relevant to your trade industry. You can also find trade publications on search engines like Google or Bing.

4). Assistant Web

If somehow you were unable to locate a supplier in publications and magazines, then perhaps try the internet. Enter keywords of a product along with word likes “suppliers” “manufacturers” or “wholesalers” in any major search engine; for example, write in Google search engine “Wireless headphones supplier”. The search engine will come up with a list of suppliers from different regions. You can select one from those and evaluate if the supplier is reliable enough.

5). Evaluation of supplier

After selection of a supplier from any of the sources mentioned above, you might consider the following key areas that can help you evaluate your supplier. If you selected a foreign supplier call for assistance from the embassy or consulate of your country to find out about the authenticity of the supplier. They must have something to assist you with.

6). Knowing the details

In addition, you can follow other means to further evaluate if your supplier is reliable. For instance:

a.    Survey other products, similar to the one you chose, of your supplier in the market.

b.    Keep in mind supplier freight policies. Have a look of them before you conclude a deal.

c.     Look for the company’s administrative and operational policies. Your supplier must be a well-reputed vendor.

7). Characteristics of a Reliable Supplier

Since we are discussing the characteristics of a reliable supplier, some of the detailed qualities you might look for in your supplier can be:

Established Suppliers: it’s normal that you will be looking for suppliers who have been in business for a good period of time. A supplier with a solid reputation with other customers is another good sign. Since, you will be able to assess the history of his company, troubles in delivery, customer responses and overall standing of the supplier in the market. However, this does not necessarily mean you have to exclude freshly started suppliers.

Location of the supplier: Finding out the location of a supplier you chose is very important for your business. Shipping goods from a foreign country will take a longer time than you can expect. Moreover, there are shipping charges too. If you’re looking for the fast delivery of goods, then the foreign supplier is maybe not the right choice. However, if you’re looking for a large-scale business, and you think that shipping from abroad will also cover the freight and can generate better revenue, then the foreign supplier is a good choice.

A Competent supplier: You’ll be looking for a supplier who can deliver the latest, unique and advanced products. They should offer you attractive financial deals, and service their goods in a professional way. You are their customer, and they should be able to go above and beyond for you.

8). Develop Supplier relationship to a higher level

Suppliers are much more than just help to your business. They can be your first-hand source to information, evaluating products, tracking competitors, and knowing new trends in the market. Once you have found a reliable supplier depending upon your business- you might not need to look for new suppliers.

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Elksourcing：Yes or No to Use Agents for Shipment?

Apr 19, 2021 by 露露

If you are an Amazon seller, you need to constantly ship products from China to Amazon FBA. Do you want to arrange by yourself, or to use agents? Here are a few key advantages you can avail if you choose to use agents in getting your products shipped from China to FBA:

1) Higher Consolidation

If you are using agents, they will make sure that your products leave China in a consolidated form. This will increase the safety of the products and the chances of them matching the standards set by Amazon.

2) Ensuring Inspection

If there are any specific changes being made to the packaging of your product to meet the Amazon standards, you will be called by the agents to inspect them thoroughly before they are shipped out of China. You can suggest them any changes you feel regarding any aspect of shipment and the agents will duly implement the same.

3) Privacy Regarding Strategies

If you are using agents, the sales strategies will only be discussed between you and them (if you wish to) and the Chinese suppliers will not be a part of discussion at all. This gives you more privacy as a seller.

4) Low Chances of Rejection

As agents double check that your products are packaged suitably and meet all the standards set by Amazon, there are very low chances of them being rejected by the FBA rules on any grounds.

Disadvantages of Using Agents for Shipment

Here are the major shortcomings you are likely to face if you choose to go with agents in order to ship your products from China to Amazon FBA:

1) Agent Charges

If you are choosing to use agents in shipping your products, a considerable amount of your money will be spent in paying them for the services they provide. It is therefore advisable to work out all the finances before you choose this route.

2) Chances of Delay

If your customer queries are filled with questions like, “why does Amazon take so long to ship?” there are higher chances for using agents. As the route your products will follow from the suppliers in China to the final customers get extended, there are chances the customers will get your products later as compared to you shipping the products directly.

How To Import From China

Elksourcing：Step by Step Starting of Quality Control

Apr 19, 2021 , by 露露

Quality control is a necessity for most shipments. The constant search for cheaper suppliers, the bad habit of subcontracting to lower-grade factories, and the high risk of communication mistakes, all make a strong case for systematic inspections.

1) Establish clear expectations

Some buyers choose a sample, negotiate a price, and then wait for delivery. This might work for off-the-shelf items with basic requirements, but not for most made-to-order products. 

You should try to get golden samples (i.e. representative of what you expect to get out of bulk production), but this is usually not enough. You also have to confirm if your supplier accepts written specifications, which will become the checkpoints for the QC inspector. 

2) Don’t only rely on final inspections

Final random inspections are good for approving major aspects of production, but they tend to put a lot of pressure onto the supplier: what happens if serious non-conformities are found at that time? It is too late. 

Instead of doing inspection at the end, try to do inspection when the goods are in process. Issues can get caught and corrected early: this is not only an extra safety for the buyer, but also a helping hand for the factory. 

Early inspections (during production) have several positive side effects. They are a way to ensure that production is taking place in the right factory. Samples can be picked up randomly for lab testing. And it can prevent long shipment delays if the factory corrects course immediately after quality issues are noticed.

3) Inspection is a must

You should write “Quality inspection required prior to shipment” on your purchase order.

If you pay by letter of credit, you can require a passed inspection report from your nominated QC provider. Inspection is a must, not an option.

4) Find the right balance between helping and arm-twisting

A buyer can play it “tough”, be “easy” on his suppliers, or find the right balance in between.

The “tough” way: a focus on final inspections performed rigidly.

Suppliers have no choice: either they comply with the rules, or they are charged penalties and/or re-inspection fees. 

It works well for large buyers who are adequately organized and who have the power to charge penalties systematically. But small-and-medium-sized importers can seldom play this game.

The “easy” way: in-line inspections and/or tailored final inspections.

As noted above, inspections during production don’t create much adversarial tension, and there is less timing pressure.

Once production quality has been secured, final inspections can be a little less formal. Why? Because it is less risky to loosen requirements about the proportion of presented products.