Elksourcing

Minimum Order Quantity (MOQ) requirement specifies the lowest quantity of a certain product that a supplier is willing to sell. If the importer cannot reach the MOQ requirement, then the supplier is not willing to enter production. Suppliers in China tend to have fairly high MOQ requirements. Why Chinese Suppliers Require MOQ? What can you do about it? Reason 1 – Low Profit Margins Require Large Volumes Chinese suppliers tend to have very low profit margins, as low as 2-3% is common. Price competition is fierce and Chinese businesses in general tend to be focused on keeping a low price rather than improving product quality and service level. Low profit margins require the supplier to produce a large quantity of products in order to break even.  Reason 2 – Material Suppliers also Require MOQ I’m sure most Chinese suppliers would be happy to do business with smaller buyers if they could. In fact, I know that…

The whole point with importing from China is the cost advantage. It’s cheaper than buying from West and certain products simply cannot be found outside of China. While China is slowly losing its position as a the world low cost factory, importers still have a price focus and negotiation is part of the process. The Chinese love to bargain, it’s part of their culture and even expected in many situations. However, there are plenty of misconceptions and mistakes made my importers – especially small ones. The supplier must also make a worthwhile profit Rather few importers are aware of the (very) low profit margins that most Chinese suppliers struggle with. It’s simply not possible for them to offer a 10 – 20% price reduction, unless the price was way off to begin with. Asking them to lower the price with anything more than 0.5% – 2.0% is the same thing as…

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 printCustom colourCustom product packingAdd extra accessoriesUpgrade 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…

You found a China supplier on a trade show like Canton Fair, the suppliers looked good and professional, you gave them business, sent the payment and waited to receive the products. However, one delay after another, months on, your stock and inventory is running out, but the supplier still didn’t make the delivery. To solve this late delivery issue, firstly we need to know why the suppliers didn’t ship the products within the time limit provided in the contract. 1) Supplier is too busy, and you are not on the top of their priority list Many buyers try to find big and established suppliers, despite their own business size and order size. They didn’t notice that big but busy suppliers often fail to catch up the deadline of delivery.One of my clients has been buying car mats from a decent-sized supplier from East China. They buy one 20’ every month, the order…

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…

Many importers will always try to get a better price from their Chinese suppliers, but how? You need to know some tactics to try to meet this target. Here are some tips: #1 – Buy larger quantities This one might seem fairly obvious – buy more and you’ll get a lower unit price. However, many importers tend to buy from more suppliers than necessary – and thus lower the quantity purchased from each one of them. Orders can easily be concentrated on a smaller amount of suppliers if you base your product selection on what the suppliers has to offer, rather than selecting a number of suppliers on a predetermined product list. #2 – Streamlined usage of Materials & Components A product is a composition of materials and components. Your supplier needs to purchase these materials and components from their subcontractors. A large number of various components and materials results in a…

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…

Business is about culture. It is extremely important to learn and understand the culture, logic and thinking of your business partners especially when you are talking about international business. THE QUESTIONAIRS Social life in China 1. Q: What are taboos in Chinese society: subjects that I should not talk about? A: We talk about everything except sex, we talk age, income, politics, religion, etc. 2. Q: Are there any expressions that I must avoid while speaking to a Chinese person? A: I can’t think of any specific expression you need to avoid, generally, be polite, be nice, don’t be rude. 3. Q: Is it acceptable to talk freely about your private life? A: Yes, it is acceptable to talk about private life, especially with families, friends and people we know. But we don’t talk private life with strangers. We feel more comfortable to talk about the privacy with someone you know and close to you.    By…