Setting up a business comes with lots of responsibility. Once you're up and running, staying on top of your day-to-day operations can be a lot of work, and sourcing products to sell takes up valuable time and resources. China remains one of the world's most popular destinations for sourcing across every product category,but its unique marketplace can be difficult to negotiate if you know nothing about the business environment there.At every stage of the procurement process, it's important to get to grips with the peculiarities of the Chinese business world.
Selection of a qualified supplier
There are many ways for you to find out some qualified suppliers in China, the traditional way is to go and meet them at local trade fairs, say, Canton Fair, one of the largest trade fair on the globe.The best way to find some qualified suppliers is to source them at local manufacturing bases,in China, each city has their pillar industries, thus there are tens of hundreds of different manufacturing bases in China, please click here to find out some popular manufacturing bases in China.The most cost-saving way to source Chinese suppliers through online B2B platforms like Made-in-China,Globalsource or Alibaba etc, which allows you to search through high volumes of suppliers using a range of different criteria. It's fast, effective and will make it far easier to single out a few promising prospects from the thousands of companies out there. However,there might be lot of business scammers online as well,they can create anything online,some Chinese companies may have an untranslated or poorly translated website that doesn't tell you all you need, so if you can enlist someone to help you search in Chinese it could a worthwhile step.
Contact these suppliers, explain your business and get a sense of who is genuinely interested in you as a customer. The ones who reply promptly to emails and have all the information you ask for on hand are worth holding onto. Give them a detailed specification and ask for samples - and when they arrive, make sure you check the packaging and instructions as well as the build quality. Do they understand and meet all the right certification requirements for the market where you'll be selling the products? Are you sure that your supplier is a qualified factory? If you're not sure, you can simply check out their registered information with local officials or a Company Verification service from local experts in China.
Auditing of Chinese suppliers
In China,not all the factories or trade companies have the right or qualifications to do business with the overseas partners directly. On the one hand,some small factories or trade companies do not have their own Export License,they have to work with a qualified export agent to 'sell'their items. So legally a qualified exporter or export agent is your direct business partner in such cases. On the other hand,each exporter has their own business business scope, no exporter can export anything whatever you need, some items need special export quota or licenses from the government. If your order is small, you can try to verify their business license and export qualifications with local officials or verify them via a local expert in China like STIN. If your order is large enough, then an on-site third-party factory or supplier inspection service is very important to stop you from future trouble before you place any orders.
Communication with the suppliers
The most important skill you can learn is negotiation. Haggling over the price, minimum order quantity and other terms of your order is far more common in China, and if you're willing to drive a hard bargain you can make real savings from original quote.
Chinese manufacturers usually work on thin margins and quality does have a price, so don't get obsessed with chasing the cheapest price. Equally, you need to be realistic in your order estimates so they can work out exactly what they need to charge to avoid losing money.
Ideally, you would communicate in the same language; hiring a translator is often a necessary step. However,whenever you communicate, always make sure you send follow-up emails in which you reiterate what has already been agreed and ask them to do the same- this will cut down on the adverse impact of the language barrier.
Of course, you also need to make sure you have a contract drawn up by a legal practitioner or a professional purchasing agent in China who has good knowledge of Chinese trade so the terms are enforceable and comprehensive.
In the event of anything going wrong, it would be ideal to discuss the issue over dinner. But of course, that's unlikely to be an option, so Whatsapp, Wechat or Skype or something similar is the next best thing. Be prepared to wait until the end of the conversation to raise the difficult subject.
Quality control management
If you can visit the factory at least once during production, then do so before the order is shipped. Alternatively, if you'd like to save more time and cost, you can consider hiring a professional QC inspection company or sending a qualified person whom you trust. It may seem like you're wasting time and resources, but it will not be frowned upon in China and is vital to make sure everything is running smoothly.
Either way, you should already have an idea of the kind of quality to expect from the samples you've approved.
Payment and delivery
Paying in instalments and hold some back until the shipment has been delivered - a 30-70 percent split between order and delivery payments is common, but this is negotiable if you want to pay less upfront or increase the number of instalments so that some payment changes hands when the goods are received.
One of the most common arrangements in terms of shipping costs if “FOB Shenzhen”, where the supplier pays to get the goods to the port of Shenzhen and then you take over. But of course, this is up for discussion if you'd prefer different arrangements.
Generally, your main delivery options are by air or sea. Air transport is a better option for small volumes or high values, or even if your products happen to be small and delicate - it's faster and can often reduce the risk of damage. Ocean shipping takes longer but is better for bulky and heavier goods. Using a reputable logistics service is vital, since they'll usually be able to manage the whole process for you.
Take the hassle out of sourcing with the ONE-STOP STIN buying office service.
STIN buying office or purchasing agent service can solve the problems for the clients from the beginning to the end, covering: Selection of qualified suppliers; Payment Risk Control; Quality Control; Shipping and Logistics Support; and even after-sale services etc. By taking the stress out of sourcing your products, you'll save valuable time and resources that you can devote to your business. Find out more about how STIN services could help you here.
Source: Alibaba Forum and STIN service team
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