Category: How To Import From China

How To Import From China

Elksourcing：How to Find a Trustworthy Factory in China?

Apr 17, 2021 , by 露露

China has become the destined source for numerous products in the past couple of decades. It is, however, important that you know what you have to do for ensuring successful procurement from the nation. The first thing you need to do is to find a trustworthy factory in China.

Even though, it is necessary to reduce risks during sourcing, it is difficult to assess the integrity of a factory. Therefore, you need to be careful when making the decisions in the following ways.

1). Reducing risks with the help of a good sourcing agent

Conduct research and homework before short listing supplier companies to collaborate with. You can also take the help of a purchasing agent, which sees to it that the business relationship you forge through them lasts for a long time.

2). Facilities in the factory

Visit the factory and check the facilities available to the employees there and observe if they are in a working condition or not. The use of technology, cleanliness, standard of equipment should also be considered. Out of several factories, you can easily eliminate the ones that do not have much appeal.

3). Core competencies

The sourcing agent China focuses on the factories that make the type of products you want to sell or use similar components like you do, to manufacture your products. Such suppliers often work in the same industrial vertical and are aware of the market conditions related to the specific industry in your country. By partnering up with a supplier, which works in the vertical as you so, achieving success becomes easy.

4). Financial condition of factory

When you want to enter into a deal with a supplier, send your representatives to take a look at the factory to understand. They can inform you, if the factory is on the verge of a shut down. It is important that you search for a solid referral of the supplier.

5). Location

The more interior you go, the cheaper the labor gets. However, the cost of transportation becomes costly. If you have to procure in bulk from inland factories, it can be cheaper, but the transportation cost and the cost incurred in reaching important shipping routes can eat away the saved money.

6). Social responsibility

These days, most Chinese factories cater to policies of social responsibility. The agency makes sure that the supplier company adheres to the policies stated by the government. If you enter into a business relationship with a supplier that does not follow social responsibility policies, you might get flak from the authorities and activists.

How To Import From China

Elksourcing：Why a Factory Audit is Needed in China?

Apr 15, 2021 , by 露露

A Factory Audit is a comprehensive yet cost-effective way to make sure your vendor is reliable and offers quality products whether you’re just beginning to work with a factory or want to assess an existing supplier. A common factory audit includes many additional benchmarks, giving you robust insights to the way the factory is managed. Before you place any order, learn why a factoryaudit can save you from making a huge mistake by choosing the wrong factory.

1. Verify Supplier Legitimacy

Working with suppliers in China comes with risk, but a factory audit from a reputable quality control firm minimizes uncertainties. It’s difficult to verify a supplier’s claims from a distance, in particular without having industry knowledge. A factory audit can ensure that the factory is legal and has all the necessary certification and licenses to be able to sell and export goods.

2. Confirm Supplier’s Product Expertise

A factory audit gives you an inside look at the factory’s showroom without having to step foot inside. A quality control auditor verifies the machines to find out whether or not the factory has the capacity to produce your product internally. If some parts are missing, sub-contractors may be involved. Even if you’re OK with that, you still have the right to know how and where your products are produced.

3. Check the Factory Capacities and Organization

An in-depth supplier evaluation confirms that a factory can indeed meet the production lead-times you initially received from the vendor. The auditor checks the supplier’s storage capacity, which can greatly impact the quality of your goods. For example, products stored outside could be affected by bad weather. If semi-finished and finished products are stored in the same area, they may accidentally be loaded together. A factory audit also tells you how management is organized so you know who makes decisions and solves problems — and most importantly, who you should talk to for negotiations.

4. Authenticate the Quality Management System

The quality management portion of the factory audit confirms that the factory has the necessary processes in place to ensure the quality of your final product. The auditor checks how your specifications are reviewed and considered, the way goods are controlled during production, and how the machineries are calibrated over time to guarantee the same efficiency and quality result. There are key quality indicators for all relevant functions at every organizational level to make sure no detail goes unnoticed.

5. Verify the Supplier’s Social Accountability

Your factory audit provides a thorough review of the factory to make sure that at an administrative level, all documents conform to the local regulations. As per the SA 8000 standards, the auditor reviews HR records and even interviews managers and workers to confirm the factory’s work environment. You’ll receive verified proof that the working environment is clean, and the conditions are acceptable.

How To Import From China

Elksourcing：How to Find a Good Factory in China?

Apr 15, 2021 , by 露露

China presents an excellent opportunity when it comes to sourcing products. In order to succeed, the most import thing is to find a good factory in China. However, this is uneasy. Below are some basic steps to follow:

Step 1: Know your product

If you don’t know the specifications (input materials, dimensions, components, packaging requirements), the compliance requirements to sell into your country, along with the quality demands of your market, then it is very hard to determine which manufacturer is right for you. Price should never be your only concern!

Step 2: Research

Trade websites are a great tool for finding factories. However, many professional manufacturers will not advertise through these portals and are instead found through Google, Baidu (the Chinese equivalent) or through industry specific trade shows. Keep up to date as to when and where specific trade shows are held, both in China and in your own country.

Step 3: RFQ 

Sending out a request for quote is important as it allows you to gather information about a factory and their capabilities, along with their price levels. It’s also an opportunity for yourself to demonstrate that you are a serious buyer that will bring the factory good business over the long term.

Step 4: Vetting suppliersbased on

Communication, location, size of the factory, specialization, export experience, legitimate operating entity, and the level of interest.

(1) Communication:

Can you communicate efficiently with the manufacturer? Are they prompt in replying to your calls and email? Are they ok discussing specifications in detail?

(2) Location:

Factory location will have a bearing on lead times. It will also impact prices through labor costs, access to raw materials, rent etc. Avoid companies that don’t provide the location of their production facility as they are probably a trading agent or middleman.

(3) Size:

Typically, you want to represent 5-30% of the factory’s business during that period. Anything less and you won’t be a priority for the factory, and you’ll have limited leverage with price negotiations. It’s also worthwhile investigating the operation size, production capacity, equipment, and staffing.

(4) What they specialize in:

China’s manufacturing sector is highly competitive. As such, Chinese factories are forced to specialize in production to maximize efficiency. I’d be wary of purchasing from a manufacturer who claims to manufacture a wide range of products. They are probably a trading company.

(5) What markets they sell into:

If your product must comply with strict national standards, it is wise to choose a factory that has experience manufacturing that product for sale into your market.

(6) Legitimate operating entity:

Check the ownership papers of the factory. Also, depending on the value of your order, auditing the factory can be worthwhile.

(7) Level of interest:

Sometimes good factories have no interest working with you. There’s no point pushing.

Step 5: Ask for samples

Request that the supplier sends samples of the product. For off-the-shelf products, the samples should closely match the specifications you supplied to the factory. If the factory can’t match your samples, then unless you are willing to spend time and money on re-tooling and product development, the factory is probably unsuitable.

*it is common to have samples redone and redeveloped in order to reach your desired outcome. Don’t write-off a factory too quickly if the first sample is not perfect.

Step 6: Visit the factory

This is by far the best way to determine if the factory is suitable. By visiting the factory, you can clearly check machinery and equipment, factory’s capacity, working quality of workers, sample room, warehouses, and quality control systems. It also allows you to negotiate pricing directly with the factory boss.

How To Import From China

Elksourcing：Considerations to Take before Sourcing from China

Apr 13, 2021 , by 露露

With the existence of more and more serious competition in the market, many companies are looking to source in low-cost countries like China. However, many China trading companies fail to provide the clarity that firms need in order to monitor the process. The issues like cultural and language barriers are some that organizations rarely face in the homeland. The companies fall into the trap because they only think about pricing instead of realizing that sourcing can only be beneficial if it covers all the factors comprising cost, lead time, quality, and operational risks.

What should you do for deriving benefits?

In order to derive benefits from China procurement, the companies should learn to deal first with some of the crucial internal points that may affect the entire setup. To understand this broader picture, a prerequisite for success should be kept on the top priority list. As per the middle management, the advantages of lower-cost purchasing exceed operational costs and risks. Furthermore, performance and incentives are considered as inventory costs. To deal with the new risks of conducting suppliers in China, a few adjustments will be needed within the organization.

The approach should be slow and steady, enabling managers to adapt gradually the new ways of choosing vendors, negotiating with them and minimizing the pains of the transition stage. Logistics condition, quality assurance and control, and customs regulations are the features that need special attention when direct sourcing is implied. In case of quality assurance and control, a profound assessment of pre-selected suppliers is done. During this analysis, the firms often look to gain more insight into suppliers’ R&D activities, financial stability, due diligence, current client base, production process and quality procedures.

Quality management is an uninterrupted process. 

Once you have recruited a supplier, you need to measure its performance consistently. This actually helps firms to optimize supplier performance, hence boosting service and product quality and delivery. Packing, inspecting container loading, satisfying customs regulations, arranging shipments, and managing inventory and consolidation all fall under the logistics department. During China sourcing, many detailed decisions have to be made and many activities have to be managed. When corrective measures are necessary, a hands-on approach is mostly required to monitor the supply and take immediate action if necessary.

Risk control is yet another important factor to successfully capitalize in China. 

Sourcing companies help clients in identifying reliable suppliers, offering quality assurance, performing logistics activities and recruiting personnel. Henceforth, setting up sourcing firms in China enable the business to gain control and save more. China procurement can certainly build a real competitive advantage, but this does not happen in a fortnight. A business planning to have a future must lay its foundation today. With considerable time and effort, you can place your stones in a correct manner that can create value and favorable circumstances for the future.

How To Import From China

Elksourcing：Common Mistakes to Avoid for Sourcing from China

Apr 12, 2021 , by 露露

Chinese economy presents lucrative business opportunities for entrepreneurs in United States and other foreign markets. While there are some risks to sourcing goods from China, you can manage and reduce these risks with a smart and methodical approach. Below are the common mistakes to avoid for sourcing from China:

1. Failing to define a sourcing strategy.

When sourcing goods from China, you must have a well-defined sourcing strategy, this includes conducting proper due diligence about who you are dealing with, including intermediaries and manufacturers. You need to know what types of products you need, how much you can sell those products, how much you can afford to spend on those products, and by what date you need the products. You should also have a plan in place for quality control.

An experienced China sourcing agent can help you put together a strategy for sourcing goods in China.

2. Failing to define quality standards for suppliers.

Before you search for suppliers, you must have a general idea of the quality standards your company expects a supplier to meet. The better you define these standards, the easier it will be to determine whether your sourcing efforts are successful.

Once you have identified and defined your expectations of suppliers, you should only seriously consider those suppliers who are able to meet your needs. An experienced China sourcing agent will have existing relationships with suppliers and can help you determine whether certain suppliers are right for your company.

3. Treating international vendors like domestic vendors.

Many clients forget that sourcing from China isn’t like buying from a local supplier. You must plan ahead, take into consideration for production time, and the time it takes to ship your products by sea, which can take another 4-5 weeks, depending on your location.

4. Not getting things in written.

All negotiations between you and your supplier should be in written. Your contract should include important information such as the parties involved, QTY and price, definitions of product quality, production ready date, delivery expectations, and payment terms. It’s especially important to get all of the product specifications in written up front, including dimensions, tolerances, material requirements, and packaging.

An experienced China sourcing agent will be able to help you with all of this. 

5. Language barriers.

It is very important to have someone on your China sourcing team who speaks Chinese. In cross-border transactions, you cannot depend on shoddy translation. Language barriers often result in failed business deals!

Find someone you can trust to communicate with suppliers on your behalf in Chinese, preferably a native speaker. A China sourcing agent who has proven experiences can help you overcome language barriers.

How To Import From China

Elksourcing：Steps to Get Your Products Made in China

Apr 11, 2021 by 露露

Step 1 – Creating Engineer Drawings and a Prototype

You need to get your idea made into engineer drawings and a prototype. It is crucial that you get both done; it can be difficult to manufacture a product without an engineer drawing that has tolerances, material, and finish requirements. You need a prototype, so you know your product is functional and looks good.

You can do this in China, but it is not easy. Communicating with an engineer in China over different time zones can be difficult enough, if there is also a language barrier, the challenge is compounded as difficult ideas and concepts can be hard to translate. Progress is much slower because of this. It is recommended you hire a professional sourcing company in China. We can help you get started on this process if you need help finding an engineering company.

Step 2 – Finding a supplier

Okay, so now you have a beautiful prototype with clear and exact engineer drawings. The next thing you need to do is finding a factory in China that can produce your products. You basically have two options, find one yourself, or get a sourcing company to find one for you.

You may think that getting one yourself may be the cheaper solution, because you don’t have to pay a commission. In real life, it is often more expensive. If you choose to get one yourself, you must learn the culture, fly to China, and start building business relationships over time. You would need to look for factories that have the capability to manufacture your product and keep your level of quality. You would need to visit their actual location. Just googling Chinese factories doesn’t work because many “factories” actually are scammers, some could be real factories but may steal your product design and sell a knockoff version.

After a lot of flying around China while paying for a translator, you still have no guarantee of success. Using a sourcing company can simplify things as you no longer have to deal with cultural differences, language barriers, time zones, the risk of getting burned by a fraudulent factory, and a whole lot of jet lag.

What makes a qualified sourcing company? Well, for one thing, the biggest isn’t always the best. Alibaba has had a number of scandals over the past few years. A good sourcing company will have skilled people in China who know the culture and language fluently. They have a longstanding history of protecting intellectual properties and know how to find qualified factories. They are responsive, pay attention to detail, and will ask a lot of questions about your situation to get a clear picture. They will help you through the import process and have a replacement policy for defective products. Sourcing agents should be upfront about fees and will work to fix any issues that occur.

Step 3 – Getting a Quote

When you find a sourcing company you like, you will need to provide them with your engineer drawings and some information such as: your shipping location, quantities to quote, packaging and labeling instructions, so they can tell you how much it will cost to produce and ship your product. Also, make sure you provide the company with any additional requirements you need your product to pass such as U.S. consumer certifications. It is a good idea to get exact quotes and not shop around for ballpark figures, so you have reliable numbers. It is important to note that cost, while important, should not be your main reason to pick one quote over another. Choosing a company that is responsive, reliable, and reputable will save you more money over the long run.

Step 4 – Purchase Order

Now that you have a quote that includes sample, production, and shipping charges, along with estimated production times, you should be ready to place a purchase order. Some sourcing companies offer a third-party inspection service which may be a good investment if this is a first order or you are buying a large order. At this point, you should have been provided information about marking your product as “Made in China”, various import fees and paperwork you should expect, and you should either have your own customs broker, or have had one referred to you. Make sure the factory will make and send a sample to you before you move to production so that you will know the level of quality you will be receiving. You should also review their replacement policy.

Step 5 – Receiving the Shipment

After you have signed a purchase order, you should receive a sample for approval. If there is something wrong with the sample, bring it up with your sourcing company and have a corrected sample sent over. When you approve the sample, you should expect to pay a portion of the production order up front, usually 30%, and the balance when the order is ready to ship. You should expect to have to file some paperwork. Many companies will ship your shipment to the port your forwarder chooses, and your forwarder will be responsible from shipping it from there to your door. Make sure you inspect your shipment to make sure good quality and right quantities are received.

How To Import From China

Elksourcing：Good Practices for Sourcing from China

Apr 11, 2021 , by 露露

Here are some good step by step tips I learned from my experiences in import and export business.

Step 1: Confirm the Products

Before sourcing from China, you need to do your homework and decide the products you are after, then, you will need to focus on the main manufacturing areas in China. The supply chain at Yangtze River Delta area specializes on manufacturing small commodities, mechanical equipment, machining parts, auto parts, small tools, die casting parts, and sand-casting parts, however, manufacturers at Pearl River Delta area specializes on electronic products, plastic parts, stainless steel products and home appliances. A list of outsourcing products helps to find the right suppliers.

Step 2: Get the Forecast of Volume

Both the unit price and shipping cost depend on the volume. If you want to purchase products from China, you should match the requirement of Minimum Order Quantity (MOQ). Also, it is high cost per unit to ship the product by sea if the value of goods is less than 3000USD in total.

Step 3: Check the Port

No matter your delivery goods by sea or air, cost is always one of the important considerations to import goods from China. If you need to source various products, try to choose the suppliers close to same port, or at least the products with most QTY are close to the port.

Step 4: Find the Potential Suppliers in China

1. B2B sites in Chinese are useful to find suppliers in China.

2. Chinese search engines are also good ways to find manufacturers.

3. Trade shows are good to find China manufacturers.

4. Recommendations from friends, customers and suppliers.

5. Use a professional sourcing agent.

Step 5: Select Potential Suppliers

It is easy to discover hundreds of Chinese potential suppliers, but most of them are not the one your need, such as, the price is too high, the quality is too poor, the service is too bad. So, it’s necessary to do some surveys.

1. Do online background check for the potential suppliers, including the number of employees, registered capital, facilities, capacity, and reputation.

2. Ask suppliers for doing supplier self-assessment report.

3. Choose 2~3 factories as the final potential suppliers.

Step 6: Sign Non-disclosure Agreement

Non-Disclosure Agreement (NDA) is one of the most important agreement to be signed before giving suppliers any information about your products.

Step 7: Quote for the Best Possible Price

After getting everything ready, you can get quote from the 2~3 potential suppliers. Negotiate with them and get the best possible price.

Step 8: Maintain Ethical Practices

It’s important to ensure that suppliers are not employing underage workers or treating their employees poorly. It’s recommended to hiring a professional 3rdparty company to audit the factory before signing a contract, especially if you are looking for a strategic supplier and will place a large order.

Step 9: Visit Factories

Before spending money, it’s very important to visit suppliers, to verify the factory communications, manufacturing capability, production capacity, quality control system, and so on.

Step 10: Select the Manufacturers and Make Samples 

After visiting the potential suppliers, we will select one of them for our customer’s project. It’s important to ask the supplier to make some samples for testing, as some Chinese suppliers do not use the correct material as defined on spec.

Step 11: Test on Trial Production Order

After clients approve the tooling and samples, we suggest clients running a trail order. In some case, the sample cannot say anything. For example, the supplier makes 10 samples and only 1 piece is OK, and then he ships that piece to you. So, running a trail order before mass production can give clients some assurance when importing products from China.

Step 12: Go to Mass Production Process

After trial production is approved, we will place a purchase order for mass production. In order to make sure clients get the best quality of products, we will do quality inspection at each step.

How To Import From China

Elksourcing：Types of Inspections You Should Know for China Sourcing

Apr 11, 2021 , by 露露

From my 20-year experience in China sourcing business, I’ve learned that solid quality inspections are crucial to the success of sourcing from China. However, many new importers are not familiar with the types of inspections and do not know what they should choose. I’m glad to share with you the brief inspections as following.

Step 1: Pre-production inspection

Make sure your supplier uses the right material and components is concerned by some customers. For example, a tumbler should be made from 304 stainless steel, but some unreliable supplier make is instead of 201 stainless steel; A die casting auto parts should be made from A 380 aluminums alloy, but supplier makes it by using ADC 12; A bicycle hub should be used ceramic bearing, but your supplier uses a stainless-steel bearing for you. When you received these products but find that they were not the products you have ordered.

If your supplier is a reliable, honesty, and trustworthiness manufacturer, you don’t need to worry about this question. However, we can’t confirm a new supplier they are reliable enough. So, we need to do something to confirm or request supplier using the correct material and components for your products. Here are some solutions to help overseas company who doesn’t want to spend the money on product inspection services company.

a.Request supplier to provide material certification.

b. Ask for a material or components sample before placing the order.

c. Sign a contract with supplier and write material and components requirement in the quality control terms.

Although these points cannot 100% ensure Chinese manufacturers to use the material and components as requirement, but it can be a better deterrent than do nothing. And it also tells suppliers that the right material and components are very important for you and they must use the correct one.

Step 2: During production inspection

During production inspection is the most important during the quality control system and product inspection program. Everything should be control during the process. During manufacturing, product should be 100% checking before it was packaged. Most of regular manufacturers have on-site inspection post. When product finish manufacturing and checked by inspectors, on-site inspector should inspect every one or two hours (It depends on the product).

It is unrealistic to hire an inspector to stay at the factory for most of small business. The business is too small to pay other cost. However, we can ask supplier to provide some documents to confirm that they have quality control system and is not a workshop without quality management system. These documents are very important to control the quality product if you don’t want to hire a third-party product inspection company to work for you.

a. Ask you supplier to provide the framework of their organization. After you get it, you can learn their quality control system.

b. Confirm your supplier has process description for operators.

c. Ask supplier to tell you the number of during production inspector and what is their job.

d. Learn the during production inspection checking list and tell your concerns to suppliers.

These points are the basic work to confirm a supplier if it has quality control system if don’t want to spend money on product inspection services or supplier audit. Of course, you can ask any question about quality control if you are interesting. But, please don’t trust what the supplier told you. Documents, pictures, and video provided by supplier are the strong evidence that they have quality control system which includes during production inspection process.

In some Chinese factories, packaging operator is also responsible for product inspection. This kind of inspector is also very important to quality control that they can prevent bad quality product was delivered to final customer if they cannot be found during the pre-shipment inspection process.

Step 3: Pre-shipment inspection

Pre-shipment inspection is the last step to prevent bad quality product be shipped to final customer and is the most important product inspection step. It is the most effective way to control the quality. Overseas customers import products from China, they pay money to Chinese suppliers and get the products match their requirement. Because customer can reject any products if the quality or other points cannot match their requirements. This is the deal. So, most of overseas customer only check the final product’s quality, by themselves or third-party product inspection services company.

Pre-shipment inspection is usually operated before final payment and booking. Customer can hire a third-party quality control company or product inspection services provider to help them check products before payment and booking.

Pre-shipment inspection is the final product inspection and includes appearance inspection, function inspection, dimension inspection, and package inspection. How to check and what is the checklist are depend on the product and customer’s requirement. As a sourcing agent in China, we have rich experience on product inspection and we know that every customer is concerned about their product and don’t want to receive any product with defects. However, for some products with a hug of quantity, it is not practical or high cost to 100% checking or inspect all the product. Random inspection or random test is the most popular for pre-shipment inspection, such as 5 pcs, 10 pcs, 3%, 5% or 10%, etc.

Hire a third-party product inspection services company to check the quality is the common ways to control the quality at low-cost if overseas company cannot inspect the product in person. But there are a lot of product inspection services providers in China, how to find a reliable one?

a. Product inspection services provider should specialize in your field. For example, if you want to check the dimension of product, you should hire a product inspection company who has mechanical inspector.

b. Product inspection company based in internationalized city such as Shanghai and Shenzhen always can provide specialized product inspection services.

c. A product inspection company who is close to your supplier always can provide a lower inspection charge. For example, your supplier is located at Ningbo, Zhejiang province, China, you should not hire an inspection services company who bases in Shenzhen, Guangdong province, China.

d. Ask for the demo of product inspection report, and add the points and terms to match your requirement.

Pre-shipment inspection is one kind of product inspection which can give overseas companies some assurances when importing from China. Of course, customers also can complain when they receive the product cannot match their requirement if they hire a third-party product inspection company to check the products, but it is passiveness in that kind of situation. We always suggest overseas customers to hire a third-party product inspection services provider to help them check the product before shipping when importing from China.