While China quality control is no longer a nightmare, there is still a lot of “hand holding” required to ensure suppliers fully understand your specs and have the ability to maintain quality.

Only through physical inspection of the facilities and review of actual production samples will you gain a true understanding of your supplier’s ability. If you are unable to make the trip yourself, there are independent QC agents that can assist with this qualification and analysis process.

Always see an actual production sample from the actual supplier. It may sound simple, but you would be surprised at the number of so-called suppliers who actual trading companies that farm things out to sub-suppliers without full disclosure to the buyer. This creates an additional level of margins. More importantly, should a problem in quality arise, the lines of communication are complicated by middlemen.

Ask the supplier to provide their internal QC documentation. For example, stipulating that the supplier’s testing and inspection data must accompany the shipment will let them know you are serious about quality.

Employ local Quality Assurance inspectors and independent laboratories. Not realizing that companies provide independent inspection services at affordable rates, some buyers wait until the goods arrive at the destination to perform an inspection, but if any problems are found, it’s too late.

Even if your payment terms are structured to limit your financial exposure in that final payment is made after inspection, should you run into a QC issue after the goods have arrived at the destination, you still have the headaches associated with missed delivery dates, negotiations of corrective action, and costs of scraping or returning the goods to China. It is always a good idea to inspect the goods before they leave China.

Almost every buyer is concerned with how to ensure blueprints, design specs, tooling and brand names are protected during the quotation and production phases. Here are some tips:

Do not disclose the product’s final use and remove confidential information from prints and samples.

Consider dividing your product into individual components to conceal “the big picture” during the request for quotation stage and perhaps for production.

If possible, do not disclose the buyer’s identity. Let the supplier quote based on the product and order size, not based on how much money they think may be in your pockets.

Sign a letter of confidentiality. However, even with such a document, confirmation of wrongdoing and enforcement is difficult. Therefore, you should own the tooling out right. Any funny business and tooling is extracted from vendor.

Even if you have no plans to sell your products in the China, you should consider registering your trademarks and designs in China. Having done this, the court system is on your side should you face infringement by a supplier. Luckily, registration is inexpensive and straightforward. Costs are under 2000USD in most cases.

How To Import From China

Elksourcing：How to Find the Right Supplier in China?

Apr 5, 2021 Elksourcing, supplier by 露露

The most important factor in determining the success or failure of your sourcing program will be finding the right supplier. It sounds obvious, but making detailed comparisons and verifications of vendors at a professional level can be daunting. By following below procedures, things may turn easier.

Your sourcing feasibility study and supplier identification research should have a clear methodology for defining and measuring the desired attributes of the ideal supplier.

Step One “Defining”:

The “right supplier” is unique to each buyer, as the relative weight placed on price, quality, lead time and other attributes differs from project to project.

Step Two “Measuring”:

Focus on those factories that can clearly show production experience with your particular product or production method.

Be aware that polished English skills do not reflect production skills. Often the most polished websites are set up by trading companies.

Review the candidates’ websites and brochures against your desired attribute list, contact each candidate by the follow ways:

Send an e‐mail or make a phone call to ask for initial product‐specific information (price, minimum order size, lead time).

Are samples available? If they don’t have samples readily available, they probably don’t deal in your product on a regular basis.

Confirm the actual production location and ask for ownership papers of the factory. Be explicit that the production location may be audited and that this location cannot be changed without approval of buyer.

The above research should narrow the field down to about 2~3 highly qualified candidates. At this stage, visit the factories in person to review quality systems, confirm production methods, negotiate pricing and look for any red flags. In other words, visit the production facility to confirm the information given during the initial research was accurate and truthful. This is an essential yet often overlooked step by those looking to cut corners during research. Unfortunately, due to the massive number of trading companies and aggressive China sales staff who will say almost anything to get your business, visiting the production line in person is the only way to confirm the real situation.

If you cannot visit the factories by yourself, hire a verified QC company to do it for you.

Based on the results of the factory visits, the next phase is sampling, trial order, if you are happy with all the results, you may have find the right supplier, and can proceed with purchase order placement.

How To Import From China

Elksourcing：Tips for Negotiating with Chinese Factories

Apr 5, 2021 Elksourcing, factories by 露露

Whether you’re new to the game or have a bit of experience, working with a Chinese factory to manufacture the product you need for a reasonable price can seem like a daunting task. It’s hard enough to manage an import business without the communication challenges and cultural barriers that come with dealing with a Chinese partner.

So where do you start?

It helps to get advice from someone who has experience with Chinese factories in the past. I’ve personally dealt with hundreds of Chinese factories, not only directly on the manufacturing side, but also working with other importers to manage quality control of their products. In all my experience, these five tips have proven to be especially relevant to successful negotiating:

1. Be realistic about your upcoming order volume

Some importers make the mistake of overpromising or overstating their order volume when initially working with a Chinese factory. Typically, they think they’ll have more bargaining power to request a lower price if the factory thinks they’re a bigger customer. Due to economies of scale, it makes sense that a factory would be more interested in doing business if your order is for thousands of units, versus just hundreds.

But let’s be clear:

You DO NOT want to absurdly overestimate your order volume just to get the factory manager enthusiastic about getting your business. Factories get a LOT of inquiries from overseas. And almost every one of them serenades the factory with promises of “long relationships and high volume orders”. Even if the factory accepts your order, deception is certainly not what a “long relationship” is built upon.

2. Bring the factory on board with your growth objectives

At this point some importers might be thinking: Great. Now I’ve lost my volume edge in negotiations with this factory, and I look like a small fish. But hold that thought.

It’s safe to say that if you walk into a bank today to request a small business loan, the person at the bank is probably going to want to see two things:

Some serious collateral to reassure the bank you have assets to back the loan in the event you default and

A pretty thorough business plan detailing what you’ll do to make sure your business is profitable enough to pay off the loan in the near future.

What does this have to do with negotiating with Chinese factories?

Whether you realize it or not, a factory manager is taking a chance on you just as you’re taking a chance on him. If he’s receiving a fairly constant stream of order inquiries, he needs to prioritize the ones that are more valuable to his business. And a factory manager is much more likely to want to do business with you if you can prove that you have a solid plan for growing your business, and in turn, becoming a more valuable customer.

3. Don’t fall for factory sweet talk

Factories are generally very hospitable, especially when trying to secure your business. Often factory management will invite customers out for lunch or dinner. And depending on the volume of business you’re, this may involve a boozy night with the factory owners. Some importers experience this hospitality from a factory owner and then confidently assume they’ve made a new best friend.

But it’s important that you remain objective.

Once the alcohol starts flowing, talk of “true friendship” and the importance of your business will often enter the conversation. Such schmoozing is a common tactic to soften you up and get you to place an order.

By all means, if you’ve already “crossed all the t’s” and “dotted all the i’s”, then celebrate with the owner over a drink and enjoy the moment. In fact, dining with the factory owner can be a great way to improve your relationship with a supplier. But if there are still questions up in the air about production or any other loose ends, don’t get carried away and manipulated into agreeing to terms you’re unhappy with.

4. Don’t bargain too hard with a factory

This next tip may strike some importers as a bit counter-intuitive. After all, why pay more for what you can get for less? But that’s just it—often when you’re negotiating with Chinese factories it can be difficult, if not impossible, to get more for less. This is as true for the quality of the goods you’re buying as it is for the quantity. The old adage “you get what you pay for” rings true when manufacturing in China.

An importer once told me they were having a conversation back in their home country with a friend who complained that “China just makes cheap rubbish”. In response, this importer, who had been buying from China for over a decade, pointed out that China does indeed make a lot of cheap stuff because it’s exactly what the world asks for.

In other words, suppliers are typically driven by consumer demand. Importers demand cheap goods from China, so Chinese factories oblige them.

5. Bring your own interpreter and deal with the decision maker

If you’ve ever traveled to China to visit a factory, you might have been relieved to find an English-speaking employee that can make communication much easier. Most factories in China that deal with foreigners will hire young sales staff to deal with their overseas customers. In most cases, these salespeople have a very good grasp of oral and written English as many are university grads that studied the language in depth.

But as any importer who has experience negotiating with Chinese factories knows, there can easily be misunderstandings or ideas lost in translation during the process.

Another problem many importers encounter is that sales staff, particularly younger ones, have limited decision making power to negotiate on price and will have to defer to a more senior manager or the owner of the factory. This can lead to two potential issues:

Confusion as terms of negotiation are passed between you, the salesperson and the decision maker and
Worse yet, if you’re dealing with a “yes man” the salesperson may simply be telling you an embellished version of the truth, believing it’s better to tell you what they think you want to hear.

Conclusion

Negotiating with suppliers is an important part of manufacturing in China. Early negotiations and meetings set the tone for how the rest of the buyer-and-seller relationship will play out. If you want that relationship to begin on solid footing, it’s important to be prepared ahead of time. Effectively negotiating with Chinese factories can help you not only to reach a lower price, but also to receive higher product quality and avoid unnecessary shipping delays.

How To Import From China

Elksourcing：5 Easy Steps to Sourcing from China

Apr 4, 2021 Elksourcing, Sourcing from China by 露露

Many people have learned a lot from magazines offering advice or a commentary about the do’s and don’ts of sourcing products from China. Some of them are effective, some of them are simply based on generalizations that may or may not be true across the board.

As a Chinese working with different factories and with importing companies around the world, I’d like to share some inputs based on my real experience on solving problems for both suppliers and customers. I believe it’s quite useful no matter you’re a China sourcing veteran or a freshman.

Step 1- Search from the internet, sourcing magazines or trade fairs

There are many potential suppliers from the biggest search engines such as Google. You can also get good resources from the sourcing platforms like Alibaba, Global Sources, Made-in-China, etc. Short list a few suppliers for the items you’re going to source. There are so many big international trade fairs in both Asia and your local countries. This is not difficult to understand so I go to step 2.

Step 2- Clean your mind

You may have the question, clean my mind? Yes. From tons of my conversations with customers from all around the world, many western people have more or less some prejudice about China, Chinese culture and Chinese products! The western media are keen to bring explosive and bad news to the public to catch people’s eyeballs. They see more broken bridges, explosion and corruption than any other news, a lot of journalists have never been to China and give their thoughts from the views written on the books which had been published 10 or 20 years before!

Many people believe “Made in China” represents poor quality, low price, and China is always cheap, cheap, and cheapest around the whole world!

This makes a lot of problems, because a lot of people who come to China to buy products cannot easily change this from their mind, they just try to be the best price killers. This gives chances to some companies that are not so honest or even scammers. So you’ll see incredibly cheap price sometimes, and when you bargain with them, they try to promise you everything—just to get your order!

Yes, there does exist many low quality manufacturers, but there are many high quality suppliers as well, like Foxconn (it produces for Apple) and Huawei. There are always medium quality producers as well. In my word, China is a place of manufacturers with mixed quality levels.

So, as a professional sourcing personnel, always try to get the first hand information by yourself, do adequate homework about the products, technologies and whole industry and supply chain.

Step 3- Visit and check the suppliers and factories

When you finish step 2, you’ll have a general idea about the products you’re going to source, but probably you’re tangled with a lot of clues.

Now, it’s time for you to clear them all. Make a plan to meet the short-listed suppliers. It’s always important to meet the people face to face when dealing with them. Seeing is believing. This is the most efficient way to understand your suppliers. By talking with them, looking into their facilities and equipment, you can understand if you’re going to work with the most professional people or not. If you don’t have the time and budget to check the suppliers by yourself, at least you should get a trusted local company or individual to visit on your behalf. This is quite important to reduce the risk of being scammed.

Step 4- Get samples for testing from suppliers

Get samples from verified suppliers to test. Don’t rely on the reports from the factories—many of them are faked, or made by Photoshop. Do the testing by yourself or send to a trusted third-party lab.

Step 5- Track the process and inspect the goods before paying

Make sure to keep an eye on what you’ve ordered. Many medium- small business operators, for whatever reason, don’t always pay adequate attention on this, they simply sign a contract with the supplier, then go to the beach enjoying sunshine, but at the end, they find out their goods are delayed, and quality is not satisfied, etc.

Besides of the process control, always do your due diligence when you choose a supplier, and inspect the goods by a trusted QC inspector, before making the payment. I’ve been hearing quite some customers tell me they receive a full container of rubbish or something that is not what they asked for at all.

How To Import From China

Elksourcing：Why China Suppliers Often Give You Wrong Quotes?

Apr 4, 2021 Elksourcing, quotes by 露露

If you have ever requested for quotes for your enquiries from Chinese suppliers, you have probably guessed why they often give you wrong or unreasonable prices. Here are 4 simple reasons:

1. They don’t read your emails carefully

Often we see suppliers that reply half of client’s questions and most of the time they answer something completely different than what it’s asked. Language barriers help to develop even more misunderstandings as I have seen people using Google translating to know what’s that email about. This happens more often than you think. Therefore, there will be misleading in price and production as well. Usually people go quickly through your email and think they got it all correct because they think this is just another enquiry of the product they deal everyday.

Action point: if you don’t have someone in China taking care of your order, when selecting the suppliers, you can try a Skype video call where you can see the person and go through important details about your order and make sure they really understand it. Have a bill of materials and all other necessary details to be discussed with them, have them showing you samples during the call.

2. They can’t make your product

Often they can’t make your product, or part of it but they won’t tell you. Instead they will quote it with some other company that will do it for them. It’s very common in China the cross trading business. Someone knows someone that knows someone that has a friend that knows someone. Be very careful with suppliers you chose to do business with.

Action point: do a company verification that will provide you with full information about that company, main products, machine pictures and other necessary important details for you to know if that company is capable of manufacturing your product.

3. Correct quotes take much more time

Especially if you are a new client, not from a famous company and your order is not that big, they won’t feel like taking the time to go carefully over your requests to quote you correctly. They also believe that, this first quote won’t close the deal, so they just send you anything to get rid of work faster. It’s important not to ask for the prices right away.

Action point: you need to first understand here and there if the supplier can make your product, how the communication goes and how fast and how nice they are willing to answer all your questions; and it’s ok for you not to understand everything, so ask questions as much as you need to have a good feeling about the supplier. You can prepare an excel file with pictures, details and let them fill in the spots with all necessary information that you need for that project, this way, you can easily spot what their answers are and they can see clear your request. Once I have sent a file to a supplier of a project about logo options, where in the picture you could see clearly that the logo was embroidered and they filled it as a silk print logo, something completely different. I found this more efficient and time saving than sending emails over and over again.

4. They are a trading company but their website shows as a manufacturer

Trading companies in China are very common. Some companies do label themselves as that but more prefer to hide that and shows they are a manufacturer to get a chance to win your order. Because they get quote from several suppliers, they can’t develop your own design very well as they do not have skills in manufacturing, as they are only used to buy and sell existing products but cannot control the whole process of producing a new product.

Action point: you need to identify if your supplier is a trading company or a manufacturer via company verification, or you can hire a sourcing agent to do the work, as sourcing agents will only work with direct manufacturers so they can save your money and time, and monitor the quality.

How To Import From China

Elksourcing：Planning Your Business Trip to China

Apr 4, 2021 dropshipping from China, Elksourcing by 露露

If you have been considering purchasing your products from China, you may also be thinking about whether or not it makes sense to travel to China to visit suppliers, attend a trade show or discover new products.

For most traders, it’s a big decision. Travel is costly, the country is huge and maybe a bit intimidating, the language and habits of the Chinese people are sometimes different to those of most US and European buyers. Is it worth it?

1. To Go or Not to Go, That’s The Question

Opinions are all over the board about whether or not it’s necessary or prudent to go to China. In general, unless you are intending to invest in large purchases, it’s simply not worth the money. You should not spend money going to China just to “kick the tires.”

Good advice: Before you decide that you will buy from China, take a good look at the costs versus the profit. Be sure you add the cost of shipping and customs duties. Make sure it’s worth it on paper before you make the commitment.

If, however, you are planning to make a substantial investment, or if you have been importing from China, know what you want to buy and are looking for new sources, it makes good sense to inspect factories yourself, forge strong personal relationships, and experience new product possibilities.

Caution: Beware of trading companies that claim they have factories all over China; that’s rarely the case.

Caution: Don’t even think of going to China without a well planned itinerary and a set of meetings with contacts arranged in advance. Travel and logistics can be very difficult. If you’re not well organized, you’ll waste your time trying to get from Point A to Point B. If you are visiting a Trade Fair before visiting the factories, it’s true that you won’t need an appointment, however you should still evaluate potential trade partners from the comfort of your office or home before you visit the fair. This will help you sort amongst thousands of exhibitors, many of which are likely to be factory agents (and therefore middle men) cutting into your profits.

Although many traders have lot of cautions about going to China, most who have done so can confirm it’s a terrific experience, and can be extremely profitable if planned properly.

It’s the perfect opportunity to find new products and new suppliers, and establish better relationships with your current ones.

Bottom line: If money is no object, go and enjoy the country and see what you can see. If, however, it’s strictly a business decision, make your choice based on accurate pre-planning by calculating your costs, objectives and potential returns in advance.

2. Organizing the Business Side of Your Trip

You need to establish all your contacts before you go. Research suppliers through a reputable directory or through the Trade Fair’s online exhibitors list, shortlist your preferred suppliers, make initial contact by email or live chat, and finally inform them you’ll be visiting their factory or at a fair.

While you can just show up at a factory, notifying the manufacturer ahead is good business practice, will ensure you get attended to on your terms and that all the relevant staff will be available to assist you, and it also shows you are a professional businessman.

Beware of any supplier who seems uncomfortable about your visit. And, be sure that you will be able to visit the factory, not just meet the “owner” and see pictures of the factory.

To save on your flight costs, you should consider flying into Hong Kong, then traveling to mainland China, because flights are less expensive.
We’ll talk about visas later but we want to point out that, while a number of traders wait until they get into the country before arranging traveling papers, we think that it’s a better idea to get all the paperwork lined up ahead of time. You don’t want to have a problem in-country and waste your time on administrative hassles.

3. Locations

Many newbies want to know where to go in China. Of course, if you are setting up contacts ahead of time, the location of those contacts will define where you will travel. However, if you are also generally interested in seeing what China has to offer with respect to products, here are some suggestions.

Everyone says that you have to go to Shenzhen for electronics. Many suggest that while you may travel through Hong Kong, it’s not worth spending time there for purchasing purposes. It’s much better to get into China where the factories are.

4. Travel Documents

Of course you know that you must have a passport to travel to another country. The bigger question is the visa.

If you are going to China for a short time, a tourist visa is acceptable. If you plan to stay for more than a week or plan to make multiple trips in a year, you will need to apply for a business visa. If you want to get a one year (multiple entry) business visa then you will need an invitation letter from a Chinese company. You can contact your local Chinese embassy, or a local travel agency, for details. If you are planning to attend the Canton Fair, go to the website (www.cantonfair.org.cn) and register so you will receive an invitation. You can use that invitation to obtain a visa.

You must obtain a Chinese visa at your local Chinese embassy before you are allowed to enter China. There are options to obtain a Chinese visa from Hong Kong, however regulations are changing regularly and China is limiting the types of visa it will issue to foreigners applying in Hong Kong. If for whatever reason you are unable to obtain a Chinese visa before you land, you can try these options:

5. Travel and Accommodations

Travel costs vary, not only by where you’re flying in from, and where in China you will be staying, but also by the time of year.

Remember to buy travel insurance. Also, if you are entering China with more than USD 6,000, remember to declare it at Chinese customs.

It is less expensive to stay in a Chinese hotel rather than a global chain hotel, but you may not be as comfortable, because Chinese hotels don’t necessarily have all of the same amenities. Aim for a 3+ star hotel owned by a global chain, where you are sure to find English speaking staff, an Internet connection, and other services which will make your permanence a lot smoother. Chinese hotels are generally not expensive; the prices range from $30 to $100 per night for a decent hotel. But, you need to book your hotel in advance to get a discount.

Also, by staying in an international chain hotel you will meet other business people, and can get good advice and useful contacts.

Good idea: After you book your hotel, but before you travel, check again to be sure your booking is on record and confirm the price in a currency that you understand.

Try to arrange to be picked up at any airport in China; the hotel may have a service or in some cases, the factory you are visiting will arrange pickup for you. There are always plenty of cabs but it’s a bit of a mob scene usually, and most Chinese cab drivers can’t speak English. You can end up paying too much or taking the long, long way to get there. If you do travel by cab, be sure you have your destination written down in Chinese, and agree on a price in advance. You should also be sure the price is written down in a way that you can understand.

Caution: Remember that Chinese cabs are not likely to be equipped with credit card machines so be sure you have enough RMB with you to pay.

All that being said, taxis are still a good way to travel around cities in China. Subways are only available in big cities, such as Beijing, Shanghai, Guangzhou and Shenzhen. Buses are cheap but slow. Plus, it may be difficult for you to know where to get off the bus because most street signs are in Chinese.

Keep in mind, that factories are often located in the outskirts of cities. This is especially true in Shenzhen, where the factories are frequently located far from the central city.

6. Language Barriers and Other Cultural Issues

It’s always a good idea to learn a few phrases in Chinese. Your Chinese counterparts will be pleased with your effort. You probably won’t be able to do more than that unless you plan to really study the language. Remember that there are two major forms of Chinese, Mandarin and Cantonese. Many Chinese people living in other countries speak Cantonese because the people of the southern shoreline are more likely to emigrate. However, outside of that southern shore area and Hong Kong, most people speak Mandarin. The two dialects can be quite different.

You will almost always need to hire a translator for your discussions with factory owners. Even if you have been exchanging emails with them in English, you’ll find that their spoken English is simply not as good. Don’t rely on the factory to provide the interpreter. If the interpreter is not working for you, it’s too easy for them to translate in a way that favors the factory owner.

Good idea: Get someone who is knowledgeable in the industry who speaks the ‘lingo’. As a first timer this will really help you to open doors and also to increase your chances of getting a better deal.

Keep in mind that the Chinese like to establish relationships before they talk business. Courtesy is very, very important. Don’t use a first name unless given permission. And remember, the Chinese write their last name first so if you are dealing with Mr. Wang Tao, he is really Mr. Wang.

You’ll be really pleased with the food. A great meal costs between $10 and $20. But, you’ll probably be asked to dinner and your Chinese host will pay for the meal. It’s a matter of honor for the Chinese host to take care of the bill.

Caution: Traders say that suppliers’ excessive generosity can make you feel very guilty about bargaining but you need to do it anyway. It’s expected and you will only get the best price if you push for it.

7. Trade Shows, Markets and Cash-and-Carry

Should you go to the trade shows or the markets, or just visit the factories? Our traders generally believe that while it’s fine to go the trade shows, you should really plan on visiting targeted factories to see the real deal. The trade shows are great for getting ideas and making contacts, but you need to be sure that the show supplier can really produce by seeing the factory.

The markets are terrific for picking up small quantities of things (for example the SEG Electronics Market in Shenzhen), but they are generally not designed for bulk purchasing. However, we say that with the caveat that sometimes the market stall backs up onto the family residence or factory where the product is being made.

When visiting trade shows, consider dressing casual, wear a shirt and trousers, rather than a suit. Firstly you will be more comfortable, and secondly if you wear a suit you will likely come across as a novice. Also wear comfortable shoes, there will be lots of walking to do.

Caution: don’t bring too much cash around with you, there are plenty of thieves trawling fairs and markets for an easy pick. Also try not to accept invitations from strangers, many scams start that way.

Bottom line, it’s great to pick up what you can in the markets, but it’s not a sensible strategy for getting product.

Conclusion

Going to China is not an obvious or simple decision. Weigh your reasons and the costs and benefits carefully. If you decide to do it, establish contacts and plan an itinerary ahead of time. Be prepared for travel challenges. But, also be prepared for delightful, savvy business people, wonderful food and a cultural adventure.

How To Import From China

Elksourcing：Minimize Your Risks when Import Products from China

Apr 1, 2021 Elksourcing, import by 露露

Many buyers are still guarded about buying from China – which is understandable, since many of the country’s business practices lag behind those in more developed nations. However, your risks can be minimized by working only with qualified, above-board suppliers and by understanding all aspects of your import arrangement beforehand.

If you can, visiting China is a good starting point for doing business there. If you can’t visit first, there are many online sources to help you find quality products and suppliers and minimize the risk of doing business there.

Understanding the market

Before deciding what to import, get as much information as possible about the demand for that product in your local market. Then learn as much as you can about the manufacturers of that product in China. Be vigilant and ask every detail you need to know.

Finding a trustworthy supplier

This is perhaps the most important step in your import business. Dealing with a serious and dependable supplier allays concerns about quality and can help fend off disputes down the road.

There are a number of websites where you can find suppliers. Narrowing down the choices can be a hard task, but your work will be easier if you use a good partner – like Elksourcing.

Once you’re in contact with prospective suppliers, address all your quality concerns with the right questions. Clearly state your requirements – like product warranties, key specifications and order terms. Alternatively, some companies will provide product samples if you ask, so you can test them yourself. If you’re happy with the initial quality, you can order in bulk.

Factory visits and inspections

Visiting a China factory can be an important part of making your buying decision. And it’s easier than you think – many suppliers even arrange transport for you. At Elksourcing, for instance, they will take you from the airport right to their factory floors.

There are a few reasons why you’d want a factory visit:

1. To meet management and see if the company is competent
2. To gauge the factory’s level of technical sophistication
3. To check if the factory complies with regulations and labour laws
4. To see who else has placed orders with that factory
5. To determine if the factory’s production capacity is as claimed
6. To see if the factory is subcontracting production to other factories

If visiting in person is too difficult, consider appointing a local agent or third-party quality firm – like Elksourcing to inspect the factory on your behalf. Get someone who speaks the language and knows local business conditions well enough to make an accurate judgment. Most agents charge by commission and will also inspect the output before shipment.

The shipping process

Product quality can be found satisfactory during your factory visit, but issues can arise once products are shipped. Some problems include incorrect count, wrong mix of product types, improper handling, inadequate dunnage and container damage. You may be faced with unusable products on arrival and a long delay to replace them.

You have three options:

1.Rely on the factory’s assurances. This carries the highest risk since many factories are highly motivated to get the shipment out. Even honest businessmen may not have time to witness the loading and inspect the goods. You can afford this if your product isn’t high unit cost, high warranty or recall risk, or time sensitive.

2.Observe the loading yourself. May not be practical considering the many shipments, suppliers and enormous amount of time it will take.

3.Best of all, have a good agent – like Elksourcing to inspect the goods and observe the container through the whole loading process. In fact, the loading report is often used to obtain the letter of credit (L/C) payment.

Compliance issues

You need to understand the relevant import compliance regulations before even placing your order. Different regulating bodies in your country may be involved, depending on what you import. Go to their websites for compliance details or to download required forms. Compliance issues can be very complicated for some products, so you might also want to contract a good customs house broker.

Even with the help of a broker, you should track the process step by step. You may need to issue a power of attorney to your broker and purchase customs bonds – guarantees that you will abide by all laws and pay any additional fees incurred.

Neglecting compliance can be costly, in the form of unexpected customs duties or clearance delays. But with adequate planning ahead of time, you can make sure the process goes smoothly.

Landing costs

Get a good estimate of the landing cost before you make your order. Landing cost is the sum of: cost of the goods up to loading on the transport, transport costs by forwarder, import duties, local transport costs, and cost of service providers (inspections, agents, etc.).

Note that import fees vary depending on what you import, the country of origin and destination. Experienced exporters should know how much it really costs to ship to you, but do your homework nonetheless.
There may be many hidden costs in getting your product from the China factory to your warehouse. To minimize those, you may want to consult an import management company for help. Or make a small order first to collect all costs involved and predict these costs for your intended order quantity.

Delivery from the port of entry to your final destination is often an overlooked cost. To resolve this, contact the many “last mile” service providers in your home country. They’ll deliver from your local port of entry to your company grounds.
With some good advance planning, you can import products from China profitably – and with very little risk to your bottom line.

How To Import From China

Elksourcing：As a Startup, What to Import from China?

Mar 31, 2021 Elksourcing, shopify dropshipping from 1688 by 露露

In this post I’ll focus on product categories that are a bit more suitable for startups and beginners looking for what to import from China. I begin by explaining what you shouldn’t do：

Avoid OEM / Customized Products

Products that are highly customized require higher MOQ requirements. This is simply because the supplier has to purchase components and materials from a larger number of subcontractors. Each subcontractor has its own MOQ (Minimum Order Quantity) requirements and this can quickly add up to an MOQ that you cannot reach.

Instead of importing an OEM product (custom designed) you can purchase a “standard product” and achieve customization through branding, such as the following;

Logo print
Custom colour
Custom product packing
Add extra accessories
Upgrade the quality of the product (use better and more expensive materials and components)

Avoid products with certification requirements

Toys, electronics, food and chemical products are regulated and require product certification. Far from all Chinese suppliers can manufacture products that are in compliance with American and European product certification requirements. Instead I would recommend a startup to import any of the following from China：

Textile products
Wristwatches
Accessories
Furniture (certain types may require testing for fire retardancy)
Bags
Leather goods
Jewelry
Wooden products
Gifts and art products
Promotional products
Phone accessories (non-electrical)
Computer accessories (non-electrical)
Cooking ware (certain types may require certification)
Fitness products (certain types may require certification)
Sports products (certain types may require certification)
Auto and MC parts and accessories (certain types may require certification)

Avoid buying from multiple suppliers

Many small businesses make the mistake of trying to bite off much more than they can swallow. Don’t expect that you can order fifty different products from seven or eight different suppliers. Below I explain why：

You’ll be limited to products that are mass-produced for the domestic market in China. The quality standards tend to be lower than what your customers would expect.
Limited to none customization options if you buy small volumes. No manufacturer is ready to send back “off shelf” products to the production line for modification or branding of some sort.
Too much administration. Importing from China is not like going down to the local supermarket and picking a little of this and that. You’ll need to provide your supplier with product specifications, buy samples and negotiate prices. This takes time, sometimes several months. Most startups simply don’t have the time and money to manage more than one product and supplier at a time.
High freight costs. One supplier equals one single shipment, and the freight companies quote much better prices when you order larger shipments.

How I would import from China on a low budget

If you’re on a low budget, I believe that the only viable strategy is to create a brand and maximize the number of products through simple forms of customization. Below I list a few examples on how this can be done:

Carpets in the same material but in different colours and cut into different shapes
IPhone 5 cases in different colours
Polo shirts of the same model and fabric, but with different sizes, colours and with different fabric details / print / embroidery
EVA Foam Rollers, same material but cut in different lengths

Simple modifications rarely require the supplier to increase the MOQ. Try to figure out what’s complicated and time consuming for a supplier to make, and what is not.

Complicated, expensive and time consuming modifications: Large increase on the MOQ requirement. This includes new moulds, purchasing new materials and components etc.
Simple modifications: Low or no MOQ increase. This includes logo print, different cutting, adding accessories, customized product packing, and custom colour.

Summary

Don’t attempt to buy too many products from too many different suppliers.
Avoid products that require certification
Avoid highly customized products
Brand an existing product as your own
Invest in quality and pitch yourself as a medium to high-end brand. Enjoy higher profit margins and don’t try to compete on price with the big players on the market.

Category: How To Import From China