Author: 露露

Shopify dropshipping

Elksourcing：Tips for Your First Sourcing Trip to China

Apr 17, 2021 , by 露露

The best way to reduce the likelihood of having problems with overseas suppliers is to visit them, especially before you place your first big order. As China is so far away and so different from western world, many new businessmen feel daunting for the first sourcing trip to China. Here are some tips.

1). Locate where your product is supplied

China is massive and you are sure to lose track unless you have all your products listed and suppliers located in advance. Coming prepared will save a lot of your sourcing time and keep you from getting distracted. 

2). Use a sourcing agent 

You are sure to find multiple suppliers in China selling the same product at different prices. This makes it necessary to use sourcing agents who can best accommodate your needs to make sure that you crack the best deals at rock bottom rates.

3). Don’t fall for counterfeit products

In China you can find awesome replicas of leading international brands but don’t fall for them. Importing counterfeit products from China and selling them at a high price in your country can get you in big trouble. You would not only lose your rights as a trusted online seller but also invite legal hassles. Although buying counterfeit products seem like an alluring deal, it is advisable to stay away from them.

4). Research your options carefully 

China has a downright overwhelming variety of products that can trap you into making a hasty decision, but beware! Suppliers may try hard to convince you into deciding but the best way is to explore all the options you have and finally make an informed decision.

5). Customize your products 

If you have a particular product in mind which is not on the market, you can have it custom made. From adding attributes and changing colors to modifying functionality and printing your logo, everything can be done within your desired budget, provided you know how to negotiate, or with the help of a good sourcing agent.

6). Gather information from different suppliers

This task can be a little tedious and time-consuming if you do not have a China sourcing agent by your side. To learn the best sourcing practices, you need to know your potential suppliers. Compile a list of suppliers and set up as many meetings as possible. Visit factories and verify if vendors are fully equipped to fulfill the claims they make in terms of volume and timely delivery.

7). Use a checklist 

Visiting factories and meeting vendors can get you really busy, leaving a little time at your disposal. It is difficult to keep track of everything once you get caught up with suppliers and services. Listing down all the questions and queries in advance will help you remain on the right track even with a hectic sourcing schedule. Visiting a supplier in person is very different from having your queries answered online. With a good checklist, you are in a better position to finalize your deals.

8). Do a compliance check 

A compliance check plays a decisive role in determining the right vendors. It eliminates unnecessary hassles and saves a lot of your time. Partnering with vendors who comply with your country’s regulations and requirements will help you maintain industry standards and deliver quality products and services.

Follow these tips, you will you will manage your China sourcing trip more efficiently. If you want to avoid the complications that arise with language barriers and communication gap, you can use a reputed China sourcing agent who can find legitimate suppliers and negotiate on your behalf.

shipping FAQ

Elksourcing：Better to Choose FOB Than CIF When Importing from China

Apr 17, 2021 , by 露露

FOB and CIF are two most popular Incoterms in international trade industry. However, many new importers do not know which Incoterms to choose when importing goods from China, FOB, or CIF? It is important to know the difference between FOB and CIF.

FOB – Free On Board

FOB ensure that all obligations relating to costs, risk and insurance of the goods are split between the buyer and the seller in a fair way.

The entire process of importing from China is divided into the most important stages.

1.    Manufacturing and preparing goods for shipping.

2.    Transportation from the factory to the port.

3.    Loading the goods onto the vessel.

All the above obligations are the seller’s responsibility: by agreeing to sell goods on FOB terms, the Chinese company is obligated to carry out and pay for all these actions as well as bear the associated risks. 

These stages of importing from China are the responsibility of the seller. The buyer must organize, finance and bear the risk associated with the following stages, i.e.:

A.    Sea fright from the Chinese port of loading to the port of destination and insurance of goods.

B.    Unloading and warehousing of goods (THC, warehousing costs, etc.)

C.   Customs import procedure (customs duty, VAT, submitting import documentation).

D.   Transportation of the goods from the port to the point of destination (e.g. our warehouse or the company’s office).

Due to this division of responsibilities between the buyer and the seller, we know what additional costs to expect and which stages of the process are our responsibility when we opt for importing on FOB terms. When planning to import from China, we need to calculate the costs of transportation very carefully, because the price provided by a Chinese manufacturer includes only the product itself.

CIF – Cost, Insurance and Freight

In contrast to FOB terms, CIF shifts the obligation to cover the costs of sea fright to the seller, i.e. in our example – to the Chinese manufacturer

This solution may seem very tempting. However, we need to remember that we do not order only the product; we place an order for the product and sea fright. What is more, many hidden costs relating to CIF shipping are shifted to the buyer in the port of discharge.

As importers, we want to have control over the entire importing process as well as the price of the product. This is why we recommend importing with FOB, and find a forwarder in your country to quote you the shipping and handling cost for the products from vessel to your premises.

How To Import From China

Elksourcing：Importance of Registering Trademark in China

Apr 17, 2021 , by 露露

In China, trademark is registered on a “first to file” basis. The trademark will be protected for the person who first applies for registration of the trademark. The registration should be considered both by people interested in selling to China and those planning to import goods from China.

1.    Who should register a trademark in China?

You should register your name and logo when you buy goods in China, on which you place your logo (or if it is on the package). Registrations should also be considered when we decide to sell our goods in China. Thanks to that, we will be sure that only we have the right to use our logo throughout China.

2.    Consequences of not registering a trademark in China

There are many consequences of not registering a trademark in China. Often there are situations when it’s not that easy to get your logo back. Certainly, you will need the help of qualified lawyers. However, lawsuits can be avoided by registering your mark before you start exporting or producing in China.

3.    The right to detain goods in China – confiscation

People who only produce goods in China and sell them abroad (importers) should also reserve their logo. When they do not do it, unpleasant situations may occur, related to the loss of rights to their goods. If the producer does not reserve his logo, someone else will probably do it. The third party can hold unregistered marks of companies producing in China (importers). After taking over the logo, there are often situations where the person to whom the logo is actually registered offers the company to buy their own products.

4.    Sales of unregistered goods on e-commerce websites

When the trademark has not been registered, it very often happens that our products appear on Chinese e-commerce platforms. As for a service such as Alibaba, registering a trademark in Europe or the United States should be enough to submit a request to remove the product. However, when these products appear on Taobao or 1688.com portals, the situation looks much worse. Having a trademark registered in China turns out to be necessary in this case. The website’s response will be more efficient and faster.

5.    A conclusion of a contract with a Chinese distributor

It may happen that when we decide to export goods to China, we will encounter a cheating distributor. Before you send your products to China, it’s worth having a registered trademark there. A fair distributor will remind you about it and insist on registration. However, you can also meet a cheating person who will register the trademark in their name or the name of a friend even without telling you. Not registering your logo leads to the theft of trademarks by cheating distributors.

6.    No possibility of selling goods in China

The Chinese do not recognize the customary right to own a trademark and have little idea about commonly known brands. If you didn’t register the trademark, you can be sure that someone will do it and will take your right to use the logo in China. Most probably later we will be accused of violating “someone’s” trademark and we will lose the opportunity to sell our products in China.

7.    Problems with winning lawsuits

Until you register your trademark in China, you do not have any rights to it. As a result, accusing a Chinese company of taking a logo is often a lost cause. At the moment when we do not have a registered trademark in China, we have no base for accusations. There are many situations when lawyers specializing in the protection of copyright, discover in court that their clients have not registered trademarks in China. Such cases are really hard to win and usually do not end well.

8.    Trade of trademarks

There is a special supermarket on the Internet for trademark sales in China. The platform is associated with the China Technology Exchange and operates with the approval of the State Council. When we skip the registration of a trademark in China, our logo can be found on this page. At the time when no one has bought our logo, the matter is a bit simpler. However, it should be remembered that in the light of the law in China, we do not have rights to this mark. If someone had already bought a logo from this site, the case might be more complicated. We have to obtain evidence that the marks have been taken over for profit so that it can give rise to a dispute.

Many companies, both European and Chinese, assume that the costs of registering trademarks in individual classes are high. They believe that it is better not to register the logo. However, this attitude turns out to be much more expensive than it might seem.

Shopify dropshipping

Elksourcing：Tips about Negotiations with Chinese Companies

Apr 17, 2021 , by 露露

Before you negotiate with Chinese companies, knowing what is considered good manners and respecting their partners is particularly important. Communication etiquette is always a feature which differentiated one culture from another, it’s especially important in China.

1). Must-do preparation steps

Before you start any negotiations, you should prepare in advance. The first important stage is your outfit. The Chinese consider that the only proper way to dress up for a business meeting is to wear an elegant black or dark outfit, which applies for both women and men. Having your own business card is another must: not only does it facilitate further contact, but it also is an important element of the ritual. – You should have a sufficient number of business cards – if you run out of them, it will be considered a faux pas. Your business card must include your name and surname, job title and your company name. It is recommended that business cards be printed double sided, with the English version on one side and Chinese on the other, as English is not widely spoken there. A business card prepared this way will let the Chinese party identify his/her interlocutor’s place in the social hierarchy.

2). Get to know your interlocutor

One of the biggest faux pas you may make at a business meeting is “humiliating” your interlocutor, namely saying something or behaving in a way which could suggest that he/she holds a lower social position than he actually does. In order to avoid this kind of situations, there are special recommendations which transform a business meeting into a ritual where every step has a symbolic meaning. A business meeting may start with a normal handshake though we should remember that not all Chinese like this way of greeting: a nod or a bow is more natural. Nevertheless, the best thing you can do is leave the initiative to the other party. After the meeting commences, you should introduce yourself using the information printed on the business card. Then the Chinese party does the same and it is crucial to remember all his/her particulars. If your interlocutor holds a high-ranking position in the company, e.g. a director, you should address him/her by his/her job title. Moreover, in business contacts you should always call your interlocutor by his/her surname. Using first names is out of the question.

3). Business cards and gifts

After the introduction, we move on to the ritual of business cards exchange. Once you get one, you need to study it carefully while holding it in both hands. – If you do not read the business card or if you put it into your pocket (especially a back trouser pocket), it will be taken as a very serious offense. During a business meeting, especially at its end, you may receive or give a gift (a bottle of good cognac is a good example of an appreciated gift). It is advisable not to unpack the gift in the presence of the person who gave it, you should do it later. It is also better not to give the gift in the presence of third parties.

4). Restraint in negotiations

During the negotiation itself, you should follow some basic rules of behaving towards the Chinese. You need to be punctual and very polite (behavior such as touching your interlocutor or pointing at something with your finger is unacceptable). A very serious faux pas which may result in ending the negotiations is criticizing the other party, their project or proposals. If the negotiations are held between groups, then the group members may not be critical of the position of their team leader. When negotiating with the Chinese, there is no room for being expressive. – More often than not the Chinese speak ambiguously, they are not very emotional and the result of the negotiations may remain unknown until the end of the process. You should also remember that in China an oral agreement is more binding than a written one. After signing the documents, the Chinese party may suggest introducing additional amendments.

Shopify dropshipping

Elksourcing：Key Process about Quality Control and Improvement

Apr 17, 2021 , by 露露

As learned from 20-year experience in quality management, I’d like to share with you the process about quality control and improvement.

1. Know customers’ expectations

What markets do you sell to, in what distribution channels? Knowing your customers and end-users will help you answer these questions:

A.    What is critical to quality? What is a must-have? What is a nice-to-have?

B.    What are issues they don’t want to see? The battery in a widget can’t get recharged, the thickness of the steel used for construction is below tolerance, small color variations on different units that will all be shown on the same shelves…

   C. What proportion of defective products (remember, you need to define what is defective in their eyes) can they tolerate?

2. Set objectives and approve samples & checklist

Based on what the above questions led you to discover, the best practice is to:

1.    Draft a clear and specific specification sheet, including defining the most common potential defects

2.    Set AQL limits

3.    Approve samples that have the right touch & feel, and if needed also boundary samples (to illustrate the limit of acceptance)

   4. Have the suppliers confirm all these in writing (if possible under the frame of a legally enforceable agreement)

3. Qualify capable suppliers & critical sub-suppliers

If you are setting up the supply chain for a new product, this playbook will go a long way in helping you reach your objectives:

1.    Identify the critical components — those with high value and/or those associated with a high risk (and that usually means the highly customized components make that list) — or processes (typically surface treatment such as paint, anodizing, plating…)

2.    Use your documented objectives and a relevant auditing checklist to qualify those components’ suppliers

3.    In parallel and the same way, qualify the final processing & assembly manufacturer

4. Audit systems & processes, know where the risks are, plan accordingly

As part of the supplier qualification process, you will need to audit their quality systems and maybe also their processes. You will know where the major gaps are, and you will have an idea of the highest risks for your project.

When and where to do ‘Quality Control’

1. Inspect components and products based on identified risks

The critical components may be checked at the suppliers’ facilities, or in the assembler’s facility. And the production can be inspected at several stages. It all depends on the main risks that were identified.

If one process is particularly fraught with uncertainty, for example plating, it can make sense to be present during the pilot run and then during production.

2. Laboratory testing (compliance & safety, reliability)

This is often a complement to the QC inspections. Inspectors can pick samples at random and send them to a lab for testing.

People often think of compliance testing (to make sure you can sell the batch on your market with low legal risks) but much less often of reliability testing (to make sure your products won’t fail too early in the hands of your customers).

Ongoing ‘Quality Improvement’

1. Drive process improvements based on risks and on issues found

Needless to say, working closely with suppliers is a must. They need to be cooperative and open.

2. Set controls based on identified risks

If a manufacturing process lacks a structured way of ensuring good outputs, don’t take several isolated actions.

Taking a holistic approach and setting up a process control plan (and its close cousin, the preventive maintenance plan, if equipment is a common source of issues) will usually lead to faster and more sustainable improvements.

3. Update the quality standard, risk analysis, etc. over time

The planning is not done once and for all. New information surfaces every week. Some suppliers will change, some new defects will come up, some end users will complain, and so forth.

Keep a list of the sources of high risks you have identified and have not sufficiently mitigated. Then, adapt your plan for quality control and your focus for improvements.

Shopify dropshipping

Elksourcing：Buy High-Quality Low-Price Products from China, Is It Possible?

Apr 17, 2021 , by 露露

It’s always a target to buy high-quality low-price products from China, choosing good quality product requires you to determine the product you are going to get. You should know what you need and for how long you need it. Also, you need to compare various options to get the cheapest possible products at the certain quality level.

1. Need to Have Certain Understanding of Your Products:

You should understand your products. It means that a certain product comes in a variety of different types and quality. You have to know each of its kind and quality. By understanding this you can choose good quality products from that whole range of product types. You can get information about your product prior to buying it. You can collect information about it on the internet too.

2. Learn to Judge the Quality of Products:

Another important point to consider in judging the quality of the product. So simply you can do this via the internet. The Internet is the best source of information. You can easily get to know the quality of the product from online searching. For this, you have to search the entire related product you want to buy. Get complete information about it and judge its quality. You also read customer reviews about certain products.

3. Find a Strong Factory:

It is a common thing that products come out of the factory and then go through the retailers, wholesalers, and several other links before they get displayed in the retail store. Most importantly, the price of the product will also increase the process. Usually, it happens that the goods you buy from a certain store will be several or even a dozen times more than the wholesale rates. So, the easiest way to get a quality and low-price product are directly from the factory.

A factory is liable to survive, depending on the quality of the product. In this regard, you can choose a factory; you can select suppliers according to the company’s qualification, production capacity, and much more. Definitely, the perfect way is to go to the factory and pick the product you need to buy. If this is not convenient for you can get yourself a purchasing manager.

4. Find a Local Sourcing Agent to Help You Buy Products

Getting things from other countries, you’d better choose a local sourcing agent in China to help you buy high-quality products at cheap price. A professional China sourcing agent with rich experience, can help you find the right source of goods and quality suppliers in the shortest time. Without language barriers, he or she can run a business negotiation easily, and get the best price. After that, they will help you with product quality control，packaging and shipping, until delivery to your hand.

Now that we know how to find high-quality products, how do you buy these high-quality products at relatively low prices? For this, you have to consider the following mentioned points.

1. Compare Between Multiple Suppliers:

Compare several suppliers and their products. Within the supposition of getting equal quality, prioritize those merchants with low prices. But judge the quality of the product. You are needed to buy the high quality and low-priced products. Compare the quality and price of several suppliers and buy from the one offering fewer priced with quality goods.

2. Compare the Price on Online Shopping Platform

There are several famous B2B websites in China, like Alibaba.com, DHgate.com, Made-in-China.com, and etc. These platforms are packed with a large number of product manufacturers and suppliers, whose products are labeled with the approximate product price range. We can know the price of the product roughly through this range.

3. Directly Go to The Factory:

To get the lowest price you can directly visit the factory. It will not even charge you for the supplier. Simply visit the factory and select the items you want to buy.

4. Anti-Season Purchase:

Find out the anti-season of factories and wholesalers. Both of them have peak and off-season both. Mostly in the off-season, the products are available at quite cheaper prices. So, grab your goods in the off-season to get cheapest price.

5. Use Discounts:

The factories sometimes offer discounted prices and discounts. You have to grasp this opportunity to save a lot of your bucks. Availing the discount will give you high-quality products at a much low-price range.

While buying things from China, you can get assistance from a professional China sourcing company, it will guide you about all the profitable products to import from China. China is a big country and has a big number of suppliers, retailers, and wholesalers. All in all, it is recommended to you to get assistance from professionals.

Shopify dropshipping

Elksourcing：Common Misunderstandings about International Sourcing

Apr 17, 2021 , by 露露

International sourcing is a significant activity in today’s business scenario. It involves identifying products and processes for procuring from an international supplier. However, there are some common misunderstandings about international sourcing. 

1. Approaching a good supplier is the only path to successful sourcing

Many business owners have the misconception that products can be procured successfully, only if the supplier is reliable. However, sourcing does not end with a single action. The business owner has to choose a souring agency, which in turn selects a supplier from whom cost efficient products can be bought. You should create effective supply chain management, training and proper relationship with the agency and with the supplier.

2. Multinational companies are the sole buyers of international products

At one time, small companies did not have the resource or intention to procure products from international suppliers. But, in course of time, the economy has evolved and now, small companies can afford international procurement.

3. Direct sourcing is the only way to save costs

Many companies believe that direct sourcing is the only opportunity to save costs. Direct sourcing is the act of purchasing products for the purpose of sale. It contributes to the revenue of the business. Indirect sourcing is the process of purchasing products that are used to run the business and the action does not help directly in earning revenue.

An agency offering sourcing services can inform you that indirect sourcing from international market can also save your company a lot of extra expenses. Tables, chairs, electrical appliances, computers, etc. can be sourced from international suppliers.

4. Sourcing has nothing to do with other departments in a company

Another misconception about sourcing is that it caters to only one department in a company. It is believed that the sourcing department works together with a sourcing agency to identify, understand and negotiate with suppliers. But the truth is that a business opting for sourcing services should interact with all its departments for enabling successful procurement. Each and every stakeholder in a company has the right to know about the procurement decision and its tentative outcome.

5. Cultural differences are not barriers anymore

The advent of technology has made trade easier to conduct. The global business arena has become more flexible allowing more and more companies to offer global service. You can opt for cost efficient service from a sourcing agency. With growing convenience in international purchasing operation, it might seem that cultural barriers are on the verge of diminishing. But in reality, you have to employ better techniques to meet cultural barriers. Starting from differences in language to work culture, everything should be dealt with efficacy.

Shopify dropshipping

Elksourcing：Benefits and Obstacles of Sourcing in China

Apr 17, 2021 , by 露露

The economic and industrial sector of China has undergone rapid transformations owing to the favorable trade laws initiated by the Chinese Government. This is one of the reasons why marketers are choosing China when it comes to sourcing operations. 

Sourcing in China has the following benefits:

1). Low production cost

This is one of the major benefits of China sourcing. If an organization works with a manufacturing factory in China, the company can reap the benefits of lower production costs. Reduced production cost doesn’t mean reduced volume output. A large number of Western marketers are wooed by this fact.

In Western countries, the costs of production are higher when compared to the Eastern nations. Now, if a Western marketer decides to manufacture his product in the home country, the production costs are very likely to be higher. This is because Western nations are far more advanced than the Eastern countries in every sphere of operation. China has a growing industrial economy and is giving a tough competition to the Western countries. Marketers are looking to take advantage of it.

2). High output within a short period

It will not be wrong to say that the Chinese workers are more skillful than most of the workers of other countries. The Chinese factories are not limited in capacity and time, unlike some U.S. domestic factories. The Chinese workforce is aware of the latest trends in technology. They also know how to implement it in their operations.

Agencies that offer sourcing services make marketers familiar with the economic and political climate of China. The cost of labor is cheap in China. This is also a great advantage for organizations. Companies have the option to hire more people if there is an increase in consumer demand. In this case, marketers have to incur less money than domestic facilities.

3). Market expansion opportunities

This is another reason why marketers are opting for China sourcing activities. The economic and political climate of China is favorable for marketers to conduct business operations. The Chinese Government has initiated various reforms that are promoting the sourcing scenario of this country.

If an organization decides to manufacture its products in China, it will also get a chance to penetrate the local market. With the help of sourcing agencies, companies can reap the benefits of an established supply chain. China boasts of having a large number of factories under its name. With over 1.4 billion potential consumers, organizations can hope for better returns.

However, there are obstacles to sourcing in China:

1). Getting access to the right factories

As this giant has numerous factories, organizations face the difficulty of finding the right factory that fits their needs. Many Chinese factories do not deliver products as per the requirements of firms. Moreover, there are quality issues that take a toll on an organization’s brand name. Companies hire sourcing agents of China to minimize this problem at large. These procurement agencies have an idea about the Chinese factories and suppliers that can come in handy to organizations.

2).Language difficulty

This is another obstacle the Western marketers face while conducting their procurement operations in this country. There is no doubt about the fact that the Chinese language is very different from English. Most of the time, communication blunders lead to a fall in productivity standards. Companies should try to avoid such blunders by any means.

Hiring a Chinese sourcing agent can make things easy for organizations. A good sourcing agent can give the company updates regarding the production process. 

3). Shipping

Though the infrastructure of China is up to the mark, there are problems relating to the shipping of goods. When it comes to shipping, the suppliers pack the products and put on cargo ships. These ships sail around the globe and reach the marketers after a long period. This also increases the shipping costs of companies at large.

Organizations have to consider both sides before engaging themselves in China sourcing operations. Marketers need to formulate a sourcing strategy that meets their objectives. Go with China sourcing operations if you want to enhance the productivity of your company.