Category: Shopify dropshipping

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Elksourcing：What Is a Third-Party Quality Audit?

Apr 7, 2021 , by 露露

In international trading industry, an independent, unbiased third-party quality audit is one of the most effective ways to minimize the risks of every transaction.

What is a Third-Party Audit?

A Third-Party Audit introduces an autonomous team of auditors that have zero connection to your supplier to perform the audit; whereas first- and second-party quality audits may have a more direct connection to your supplier. Products are assessed by the auditors using a baseline set of pre-established standards of quality. Upon completion of the audit, the third party then issues a certification of compliance.

Auditors may use any of four types of third-party quality audits for evaluations, and each one examines a different facet of the product.

Product Audit – A Product Audit occurs when a detailed inspection of the final product is conducted prior to the product being delivered to the customer. As such, Product Audits are more in-line with a quality inspection than a true “audit.” Accurately conducting Product Audits ensures that the product you pay for is what is delivered.

System Audit – The Quality System Audit is somewhat self-explanatory. A System Audit analyses the various components of the entire production system, including how it’s used, who uses it, when it’s used, where it’s used, and why it’s used. Auditors take a comprehensive look at how everything works in concert with every other component to produce the final product.

Process Audit – While a System Audit is typically broad in its scope, the Process Audit usually dives deeper into the product. A Process Audit looks critically at, and evaluates, the intricacies and quirks of a particular system. A Process Audit verifies aspects of the production process, such as the machinery, people, and materials involved.

Compliance Audit – When conducting a Compliance Audit, work instructions, contracts, obligations, and procedures associated with the product are scrutinized by the auditors, and are then compared to what’s actually happening during the production process.

Selecting the Right Auditor

Third-party audits are extremely useful and reliable in order to foster growth and improvement within your supply chain. Selecting the right auditor or audit team isn’t a “one-size-fits-all” solution, nor as easy as simply hiring a big brand or asking your supplier to recommend one. Follow the recommendations below to find the right auditor solution for you and your business.

First (and most importantly), decide whether or not you want a global auditing partner with international experience or one that’s local. If you’re searching for an auditor in your region, find a provider that specializes in your area of business. A computer chip auditor won’t be very helpful if you’re in the business of textiles. Don’t forget to do your due diligence when vetting an auditor: be sure to review their previous work and ask for references to ensure their expertise and credibility. Finally, regardless of the type of auditor or firm you ultimately hire, ensure that they provide guidance on creating an inspection process your organization can use after the audit is complete.

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Elksourcing：3 Ways to Find Chinese Suppliers

Apr 4, 2021 , by 露露

Let’s talk about where to look and what questions to ask when finding reliable Chinese suppliers. There’s also a really helpful checklist included.

The rewards from doing business can be great but if things go wrong you end up at the opposite end of that great scale. This is why I continue to promote that buyers, especially those new to sourcing from China take time to make an informed decision before making a financial commitment. Hopefully this topic can assist you in finding reliable Chinese suppliers.

What sources can I use to find reliable Chinese suppliers?

B2B

Websites such as the ever popular Alibaba, Global Sources & Made in China tend to dominate this side of things and the accessibility for the services here make it really appealing. Sitting anywhere in the world communicating in real time with someone at a factory in China is pretty cool. So that bit is relatively easy BUT It’s not a sure fire way to reliability as there are lots of con artists on there too. Don’t follow generic information, only follow real information even if it’s a bit rough around the edges. The crooks never post anything of much substance or anything that’s traceable.

Major Pro: Good companies will be happy to display a lot of information for you to weigh up. The convenience and speed of communication is a massive pro. Get images, videos, business licenses, test reports and product certificates quickly. Legitimate operations won’t have an issue sharing these things. In fact, they will be glad to.

Exhibitions

The bi-annual Canton Fair usually tops the bill and is an absolute must visit – watch out for a new unmissable blog (this week) from us on the Canton Fair. There are a lot of other tradeshows out there and you can find some more details in this post I wrote on 2,500 exhibitions in China. The Canton Fair is very good for new product ranges, idea generation and add on’s to existing products. If you are operating in a competitive market it is questionable how you can differentiate your business when accessing the same suppliers that your competition can BUT it must be said the benefit of this being the most economical way to meet multiple suppliers trumps the other arguments.  The possibilities to find reliable suppliers at tradeshows like the Canton Fair are higher than online and you will gain the reliability we crave faster. Reasoning for that comes from the fact you have been able to meet people face to face. Just beware that you speak to a manager at least sales level and not just staff hired for the show!

Major Pro: The face time is hugely important as it allows you to leave an impression on suppliers as someone they want to work with and gain as a repeat client. You can also touch the products, get a feel for the company and talk through various details which increases your ability to weigh up important details when finding reliable Chinese suppliers.

Sourcing Companies in China

There are now plenty of great options in this area. These companies bring western management and local knowledge to the table. If you are struggling to satisfy a requirement or prefer to spend more time servicing customers, then utilizing the valuable resources of a list of verified sourcing companies. When finding reliable Chinese suppliers, it can be a great option to leverage experience gained by your fellow countrymen and women. The reliability factor should be already built in here but that’s not to suggest these sourcing companies are above the law. They should be able to satisfy the same questions who have raised to a random supplier on Alibaba. 

Major Pro: These companies do this for a living. The mass experience built up within a sourcing company operating in China for 5-10 years can be of huge benefit. They rely on connections and trusted relationships instead of B2B platforms. 

These are the 3 most popular routes to take, social media sites like LinkedIn are also becoming viable options. For the more traditional types among us always be on the lookout for an introduction from a trusted source, that could be someone you know already doing business in China, the local chamber of commerce, etc. To really help you on your way to finding reliable Chinese suppliers here is a great checklist which asks key questions to help you choose the right supplier.

Covering topics such as:

Online Information

Paperwork

The Factory

Relationship

Background Checks.

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Elksourcing：DIY vs. Third Party Quality Inspection in China

Apr 1, 2021 , by 露露

There are huge cost benefits of importing or buying goods from China. However, you should also be aware of the quality issues that may arise. Instead of saving money, you will end up spending more if the imported goods from China do not meet your company’s standards or do not pass quality inspection. You know very well that the success of any company is built on relationships with clients and their satisfaction with the products you supply. For you to ensure that your products meet the expectations of your customers, you should invest time and money for quality inspection in China.

Do It Yourself

This approach is ideal especially if you deal with multiple suppliers or massive order quantities. Having your own quality control in China will give you the highest level of control. However, this can be very costly. You need to hire people and pay them good salary. You need to train them as well. Thus, you spend a lot of money and time. This will require good organization so you will need to use your resources to find the right people for the job.

Hire a Third Party

Hiring third party quality inspection services will help your company save a lot of time and resources. They may have high initial costs, but you will not have to be bothered with overhead costs. You will only pay them if you need their services. They will do quality inspection for you. This will usually involve establishing quality inspection guidelines, doing initial inspections, in-process quality check, pre-shipment inspections and more.

If you choose a third party for quality inspection, you have two options. You can go with a company that operates in China or have a local QC company from your country do the inspection. There are benefits and drawbacks with each option.

First, with a company run in your country, there won’t be an issue with language barrier. A company that can speak your language will make communications easier. They will be able to understand what you want, and your business processes will be able to run smoothly. However, this option can be expensive than if you have a local company in China take charge of quality control.

It makes sense for a Chinese owned company to do the inspection in China. Their services are available at reasonable costs, and they are more familiar with the culture and regulations in China. They will know how to deal with red tape. Communication can be a problem, but this can be easily remedied by choosing a company with bi-lingual or multi-lingual staff. The trick is to find a company or agent you can trust that meets your company’s standards.

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Elksourcing：Quality Inspections China Products Should Undergo

Apr 1, 2021 , by 露露

The quality inspections China products undergo may determine the failure or success of your product sourcing. If your sourcing agent has a quality control service and commits to strict compliance with regards to the standards that you have set, then that would certainly be to your advantage.

Elksourcing, one of the leading sourcing companies in Guangzhou, China, not only offers product sourcing and factory sourcing, they also offer quality control services that will make sure your products are manufactured properly and with the highest quality possible. Elksourcing promises to solve your production problems, especially when it comes to product quality.

Why is Quality Important?

The primary reason why the quality inspections China products undergo should be strict is to avoid unnecessary costs. Poor quality may increase the cost of your orders. In addition, low-quality and defective products may cause you trouble with your customers, as you may lose their trust because you delivered products that do not conform to the standards.

Your Solution to Quality Problems

All of these problems can be solved when you let Elksourcing do the quality control for you. With Elksourcing, you are assured that:

*Quality inspection guidelines are established according to your specifications and standards.
*Initial inspections for materials to be used are done to avoid possible problems such as production delays and unnecessary reengineering caused by low-quality materials.
*Initial samples are tested for compliance.
*Products are inspected during production to ensure that the quality is maintained throughout production process and address quality issues that need to be corrected before production is completed.
*Quality issues are reported consistently to you online, keeping you updated on the production of the products.
*Quality issues are acted upon to ensure consistent quality.
*Products are inspected to ensure that finished products comply with your requirements.
*The factory’s quality performance is charted and analyzed, and the company gives feedback for production improvement.
*Container loading checks are done to ensure that your products are shipped in the proper containers and that each one is clean and durable so that when the products arrive in your warehouse, you won’t have any issues with them.

Quality inspections China products should undergo before production, during production, and during shipment are just some of the services that Elksourcing can do for you. You may also need them to find a supplier that is also the manufacturer. A trading company that supplies products but does not manufacture them may require a certain fee or commission, which would entail additional costs. You won’t have that problem when you use Elksourcing.

This sourcing company can also help you get a competitive price without compromising the quality of the products. Elksourcing can ensure that the supplier puts you in priority to ensure they meet the deadline you have set.

Aside from this, because of Elksourcing’s experience and knowledge in Chinese culture and traditions, you are assured that communication is good, and thus, discussing your requirements with the supplier should be easy.

With Elksourcing, you are assured that the quality inspections China products would undergo from raw materials to shipping adhere to your definition of quality.

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Elksourcing：Why You Should Not Buy Branded Products from China?

Mar 31, 2021 , by 露露

I have recently read an post on a forum, a guy complained that he thought he could buy cheap electronics in China before he come to china as EVERYTHING IS MADE IN CHINA, but after he comes, he found electronics here are more expensive than in Europe, he is quite puzzled about that.

I bet what he is looking at must be branded electronics which is not originated from China, like iPhone, Samsung tablet, Sony Play Station, etc, it is a common sense that Foreign Brand products (including electronics) are sold in China no cheaper than in western country, if not more expensive. As the dealers/importers have to add tariff and shipping expense onto the cost of products, so in most case, the foreign brand products in china are more expensive.

Someone will argue that most brand maker have set up a manufacturing base in China or have a manufacturer partner in China to do the OEM for them, so could that possibly make the branded products cheaper in china? The answer is NO. The brand company will sign a contract to prohibit the local manufacturer to distribute, sell or resell the branded products locally, and / or disclose any confidential information to third party before they enter into cooperation relationship. So the local manufacturers are not qualified and dare not to sell the branded products publicly or secretly as that such act could risk to lose the big customer and business. Also the brand companies are not silly enough as to set up a pricing strategy that their products are sold at extremely low price in China that even after they are exported to western country they still enjoy great price advantage.

However, there are so many “venders” on Alibaba and so many ecommerce sites in China (well not only in china) sell brand products at extremely low price, how could they get original brand products at such a low price? The answer is very simple: they are counterfeited or refurnished. Search UKBF forum or other forums, you will find that those who try to buy branded products from china end up either being scammed or receiving counterfeited products.

Facing the increasingly pressure and critique from western countries, China customs are taking serious and strict methods to inspect and detain counterfeit brand products. So if you pay the money and still don’t get your products, other than being scammed, chances are your products have been detained by China Customs.

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Elksourcing：Tips for Managing Relationships with Chinese Suppliers

Mar 31, 2021 , by 露露

Managing the relationships with Chinese suppliers is not easy, the cultural difference, the language issue, the communication problem, different social system, different business culture and practices, etc.

But, managing the relationships with Chinese suppliers is not that difficult at all, if you can answer the questions: How do you define the relationships with Chinese supplier? Do you think your relationships with the supplier are equal? Do you think your order is a blessing or giving to the supplier? Do you often threat the supplier that if they don’t do this or don’t do that, you will change the supplier, as you said there were many qualified suppliers lining up for your order?

The relationship should be equal

We recently read a story on the leading international trade forum fobshanghai.com, a Chinese supplier complained how their big buyer behaved arrogantly and how it was indifferent to the benefit of their suppliers, The buyer often canceled orders without prior notification, which had caused huge money loss to the supplier as they had already started production. The buyer did not give any reason and refuse to compensate the supplier for the monetary loss.

The relationship between the buyer and the supplier is not equal. The buyer might think that their big order is a blessing to the supplier, so the supplier should do whatever they are asked to do to please the buyer, fair or not. However, in the end, the supplier refused to supply to the buyer any more. The buyer maybe thinks they have plenty of backup suppliers to replace that supplier, however, if things go on like this, the buyer might develop a bad reputation among Chinese suppliers.

Even many small and medium sized buyers are as arrogant as this buyer. Gradually they will find the relationships with the suppliers become intense and tough.

Vice versa, it is very common that big suppliers belittle small buyers, we are helping a big importer find Chinese suppliers, out of the vast suppliers we contacted, a few of them are very arrogant, they even don’t have interests to answer the telephone, reply the email and try to learn our inquiry. We also help small and medium sized buyers verify Chinese suppliers, oftentimes we heard the suppliers says they are too busy, too many orders, and they don’t care if they buyers buy from them or not. Our advice to the buyers is “dump those arrogant suppliers”.

We are partners.

Companies need to cooperate with upstream and downstream companies, suppliers, service providers, distributors, logistics companies, etc. You need the cooperation and support from other partner companies in your supplier chain to improve your competitiveness; otherwise your company will achieve nothing.

As partners, we should try to share market intelligence with suppliers, we help them grow, we give them feedback and suggestion to improve their products, we let them feel we not only buy from them, we see them as partner, we help them grow. If the R&D ability of the factory grow, if they can lower their price and improve the competitiveness of their products, in return, that will help the buyer’s company grow.

Communications

The language issue causes most miscommunication, English is not native language of your Chinese supplier, so they are always struggling to express and understand things in English. You will agree with me if you have visited Canton fair. The salesmen there are elite salesmen, however, at most booths, you will find you will only be able to communicate with them in very basic English, especially, many of them will have problem with speaking and listening, writing is somewhat easier for them compared with speaking and listening.

To avoid language barrier, here is some advices I would share:
1. Use simple and easy to understand English
When you write an email or converse on instant messengers, try to use simple and basic English to express yourself, if your supplier didn’t respond to your questions, which you think is important, explain that question, and ask again, they might not understand that question at all.

2. Write instead of Speak, if it is important

Calling the supplier can speed up communication, however, in most cases, you will find it much more harder to communicate on telephone (in spoken English), than communicate in email (in written English).

So for important matters, try to write in Email, then make a call to confirm if they have received it.

The knowledge, expertise, and experience of salesman might be another reason that causes communication barrier.

Managing the relationship with suppliers is not easy. Miscommunication can lead to dispute, misunderstanding destroys the chemistry between the supply chain, misinformation causes improper decision and bad results.

The question is not if, but how! How should we communicate with Chinese supplier effectively?

Be patient

Most suppliers are factories, especially when you dealing with small to medium sized factories, you should be aware that things might not go as well as you planned. Factories mostly locate at remote locations, so the workers in factory, in many cases, are under-educated. So be patient, teach them, guide them, and lead them to right direction. Don’t take it for granted that every supplier will be capable and experienced enough as to deliver your products in a professional way without any issue.

Trust is important

Company is not a bloody cold organization, it is a group of people with character. So dealing with supplier, in essence, is dealing with people, or to be precise, dealing with Chinese businessman. Don’t disguise yourself in business English, cold contract, promise, deadline, conditions and terms. You will find some casual greeting, care, love bring you closer to the supplier (the key persons).

Sign a contract

A contract, not a relationship or anything else can protect your benefit. Be careful with every clauses and terms. Hire a legal expert to draft and review the contract. But remember, contract and legal action is the last resort, it will be costly to file a lawsuit in China, time and money wise. So the best way dealing with Chinese supplier is to get the contract signed at first, try to communicate with supplier to get any issue solved in a friendly way, don’t threat to go to court for tiny mistakes from suppliers.

99% businessmen are not scammers

Most people are decent businessmen, they try to grow their business in a legal way, not try to scam people. Some people are scammed when trying to buy branded products or others, but generally, like the people in China, most of businessmen here are friendly and nice as well.

Prepare for mistakes

International trade is complicated, any mistakes with specification, production, packing, shipping, communication and language translation can cause problem. The process of international trade is about how to avoid mistakes and when mistakes happen inevitably, how to solve them in a friendly way.

Due diligence

There are tiny percentage black sheep hidden out there, waiting for chances to cheat you. Due diligence is like covering insurance — it is all about probability. You don’t risk your business by taking chances.

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Elksourcing：Drop-shipping from China What Products to Buy?

Mar 30, 2021 , by 露露

It is a trend that not only big buyers, but small buyers (such as retailers, eBay sellers, small businesses owners) are starting to directly buy for Chinese factories. The benefit of drop shipping is that you don’t have to keep inventory, you don’t have to rent warehouses, you don’t even need to have stores, you find the right suppliers to get good products at good price, advertise and sell the goods to the buyers in your country, have the Chinese supplier to drop ship the products directly to your buyers, and earn decent profit.

One question you have to address is that what products you can dropship from China (or are suitable to be drop shipped from China), where to get the product ideas?

What items are suitable for dropshipping?

Generally, products that have high value and light weight are ideal for dropshipping, for small quantity dropshipping business, international shipping fee accounts for big proportion of cost. So you can’t buy 10 ordinary chairs from china, if the price for one chair is 15USD, large quantity importer can dilute the shipping cost to 2 to 4USD per unit, for drop shipping, if you ship 10 chairs by air (you can’t use sea shipping as your clients won’t wait 30 to 40 days to receive their products), the shipping fee might takes 20 to 30USD, so it will leave no profit room for you.

Where you can get the product ideas?

You could make a research to identify top dropshipper list in China, the list will definitely include dhgate.com, lightinthebox.com, and chinavasion.com.

If you go to dhgate homepage, you can find wedding dresses, cosmetics & perfume, electronics, fashion products are popular.

If you go to lightinthebox, popular items are similar, but you can get some new products ideas, such as faucets(sanitary products), car electronics, toys & hobbies, wigs, or even royal wedding gown and rings.

Chinavasion specializes in electronics, you will find what electronics products are popular, what products they promote on most of their web pages, then those products must be hot.

Similarly, you could go to auction site like ebay.com and amazon.com to get products ideas.

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Elksourcing：Practical Guide for Choosing China OEM Manufacturer

Mar 30, 2021 , by 露露

The major and initial issue in choosing a Chinese manufacturer is determining whether the manufacturer is “real” or not. Chinese companies are masters of disguise. They use the Internet and sourcing websites to make themselves look much better than they are. But they can also hide the reality even on site. So you have to develop an efficient system for breaking through the façade to get to reality as quickly as possible.

The general procedure I follow and the one you should follow as well is as follows.

First, you or your representatives have to visit the factory personally. It is shocking how much variation there is in manufacturing systems even within developed areas such as Dongguan, Guangzhou and Zhuhai. Factories making a virtually identical product can range from those using primitive hand techniques from the 1930s all the way to those that use state of the art German or Japanese automated equipment. You cannot believe what the factory says about its systems and you cannot believe the photos they provide. You must go to look personally.

Second, when you visit the factory you have to use your time efficiently. You goal must be to determine whether the factory is real or is it a Potemkin village or movie set, composed of all surface and no substance. What every foreign buyer must realize is that any factory owner can create the illusion of being a strong business by putting on a show for the foreign buyer. The buyer arrives to see a buzzing, active factory with all assembly lines moving at full speed. As soon as the buyer leaves, the place shuts down again, waiting for the next victim to arrive.

I usually do the following to break through to reality:

I refuse to visit the factory floor first. The Chinese side is always upset about this decision. I just make clear that I have other things I want to do first.

The first place I visit is the raw materials warehouse. Is the warehouse full or empty? An empty warehouse is almost always a sign of a manufacturer that is struggling. If the warehouse is full, I then look to see what sort of material is in the warehouse. Are the materials consistent with what the manufacturer says it produces? Are the suppliers local, national or international? Do I recognize any of the suppliers? Are the suppliers reputable?

I next like to visit is the shipping warehouse. If the export warehouse is empty, this is an obvious signal that the manufacturer has no current business. If the warehouse if full, I then check whether the deliveries are for China internal markets or for export. If for export, I then check what the destinations for the product. Are they headed for countries that generally have buyers that care about product quality? I also pay close attention to the packing of the product and loading procedure. You can tell a lot about a company by the way it loads the product into a container.

My next visit is to the finance office of the manufacturer. I just sit on a chair for about an hour and observe what is going on. If there is no activity, I know the company is dead. If there is activity, I then observe. Is cash moving in and out of the safe? A company that relies on cash transactions is typically not part of an international sales market. Reliance mostly on cash evidences a local player with little China national and international business.

My next stop is the sales department of the company. Again, the first thing I observe is whether the department is busy. Are the sales people taking orders and working with purchase orders and invoices and receipts, or are they drinking tea and staring out the window? What language are they speaking? Are they talking in Chinese or English? No English means no international business. Finally, I just sit in a corner and listen. This can be very valuable. For example, in a recent factory visit I noted that 100% of the phone calls to the sales department consisted of customer complaints about late delivery, short delivery, incorrect delivery and faulty product. That told me all I needed to know about that company.

Finally, after all this back office visiting, I am ready to look at the factory. Here, I further frustrate the factory owner by refusing to look at the work shop floor. Instead, I make clear that I want to visit the quality control department. If there is no QC department, that tells me everything. If there is a QC department, once again I just take a chair in the corner and watch. My goal is to determine what happens when a quality problem is discovered. Do the QC people go out to the factory floor to see what happened?  Do they just pull out the defective item with no further action? Or do they do absolutely nothing? What happens to the defective item? Is it destroyed or is it put aside, presumably for sale in the local market. Some manufacturers will take you to their QC/RD laboratory. The same basic rules apply for this visit. Does the lab show signs of use, or it is just a fancy showroom designed to fool gullible foreigners? I recently visited such a lab at the offices of a food manufacturer. The equipment was beautiful. In fact, it was so beautiful that it was quite obvious that none of the QC and testing equipment had ever been used.

Finally I will visit the factory floor. By this time I have a pretty good idea what is going on at the factory. The factory floor visit is usually just a check on the equipment being used and the QC procedure is in effect.

Once you get used to using an approach like the one I use above, you will find that you can weed out the bad factories very quickly. In my experience, good factories are rare. If your initial review suggests that the factory is a good one, you should take the time to move to the next stage of discussing whether or not you can really do business with the factory. Any good factory will also be very busy. You need to have an honest discussion about what you want to have made, in what quantity and in what time frame. On the other hand, if you reject a factory, make your departure as soon as possible. Do not fall into the trap of wasting time going to lunch or dinner with the factory people that fall into the obvious reject list. On the other hand, if the good factories invite you to lunch or dinner, take the time to go. Good factories are rare and you should work immediately to build a relationship.