As per the report by Statista, product sourcing from China is growing at a rapid rate and it accounted for nearly 15% of the total global merchandise exports in 2020. Further, the exports in China crossed $331.26 billion in June 2022 with an increase of 17.9% in growth rate compared to last year.
This exponential growth is led by several factors responsible for the booming product sourcing market in China. These factors include:
- Rapid recovery in product demand from foreign countries after COVID
- Increased number of eCommerce brands and third-party sellers on global marketplaces
- Government aid to Chinese manufacturers
These and many others have collectively made China a go-to market for sourcing and exporting all kinds of products ranging from household to industrial goods.
But why does everyone turn to China for sourcing?
Let’s dig a little deeper into it.
Why Source Products from China?
There are several reasons and public opinions on why China is the hotbed for product sourcing. Some of the opinions are laced with personal biases while others view China as a strategic economy with numerous benefits that no other country can offer.
Here we list some reasons to source products from China:
Affordability
If your skills or luck favours you, you can source high-quality products at much lower prices from Chinese suppliers. This is because the country has a pool of cost-effective labour that's hard to match with other countries.
Also, the country with the biggest wall has the biggest market for affordable industrial tooling, moulds, packaging, design, and other engineering functions. However, you should be cautious as the market is flooded with cheap quality products and poor design.
No Middleman Involved
Elimination of middlemen is necessary to boost revenue for your company by delivering goods at low prices to your customers. Chinese manufacturers know this and directly deal with your company, thus, saving you huge amounts in expenditures.
Further, once you start exporting products from China, you develop a better understanding of how the market works and get the best products.
Large Supplier Base
As we know, China has been ruling the world in aspects of exporting products in large quantities from its large supplier base. As estimated by Statista, China has around 170,000 wholesale suppliers. Here’s an industry-wise bifurcation of the wholesalers:
China has the biggest share of wholesalers and manufacturers that export in huge quantities while maintaining the quality. No matter the industry, it has disrupted the world supply chain in textile, electronics, plastics, automobiles, and others.
You’ll find numerous suppliers that import raw materials to manufacture and assemble them in China and then export the finished goods globally. Thanks to this vibrant supplier base, the Chinese economy is flourishing even in times of recession.
How to Find Product Sources in China?
Although China enjoys the highest exports of goods and is the biggest sourcing market, often companies face difficulty in finding authentic product sources. If you are a beginner, here are some best places to start your eCommerce product sourcing journey.
1. 1688.com
It’s an online marketplace for product sourcing from China. It’s not known to many new-age sellers, but savvy Australian importers and wholesalers are aware of its presence. It’s home to local Chinese wholesale suppliers and manufacturers for companies to source the cheapest priced goods.
However, the drawback of this sourcing marketplace is the lack of English support, which makes it difficult to converse in the native language.
2. Alibaba.com
Alibaba is a renowned global marketplace with a large catalogue of millions of products spanning 40 different categories. The website gets visitors from across the world with visitors coming from over 190 countries. Thus, it’s a great place to start your product-sourcing journey.
3. Made-In-China.com
It’s a 3rd-party platform that helps connect buyers with the China wholesale suppliers. The platform allows China supplier wholesalers to create their own custom page that lists all the products buyers can source in large quantities.
4. Global Sources
It’s a Hong Kong-based company that organises trade shows and has an extensive online directory. They have been in the business for over 45 years and are distinct from the other Chinese suppliers due to their stringent vetting process.
Their numerous and grand trade shows across Asian countries attract big sellers and manufacturers looking for product sourcing from China.
5. AliExpress
Launched by the Alibaba group, AliExpress provides Chinese wholesale suppliers with a platform to sell goods to foreign consumers. Even though it’s not a product sourcing platform, it has widely been used for sourcing items in low MOQs. In a dropshipping business model, entrepreneurs refer to AliExpress to research, find and sell products and connect with suppliers.
Product Sourcing Methods
Before we get into the tips when sourcing products from China, let’s first understand what are the methods one can use for sourcing:
1. Direct Purchase from Seller
While it’s one of the cost-effective approaches to sourcing products, it does pose some risks if you are new to this world. The method is best if you have sufficient capacity to meet the minimum order quantity (MOQ) requirements of Chinese wholesale suppliers.
2. Hire a China Sourcing Agent
If you want to avoid the risk of getting delayed product delivery, left hanging from the shady suppliers or want to streamline product fulfilment, then hire product sourcing agents in China.
Another benefit of this method is you can leverage their network of suppliers and save a lot of time in sourcing quality products from China.
3. Purchase from Trading Company
The only reason to go for this is if you can’t match the given MOQ of suppliers. As a startup or entrepreneur, you can source products in small quantities from trading companies. However, this can be a costly option as there are intermediaries involved.
4. Use Dropship Tools to Source from China
There are many dropshippers like Spocket, Zendrop, Oberlo, and others that source products from China. Even though they are dropshipping providers, they can be good sources for finding quality product suppliers.
Such tools help you save time and money and accelerate your growth by helping you find the right products at the right prices efficiently.
8 Tips for Sourcing eCommerce Products from China
1. Do Extensive Market Research for the Right Product Supplier
The first thing you want to do is research and find China wholesale suppliers on platforms like Google, Bing, Yahoo, or others. You can also use the sources mentioned above to connect with local suppliers.
However, most results given up by these platforms are resellers and not manufacturers. Buying from them can be costly and should only be considered if you are looking for products like toys, clothes, or cheap electronic items.
But if you want to source products that meet certain technical specifications, then the best thing would be to research extensively to find manufacturers. By identifying actual product manufacturers, you can source products directly from them at lower prices.
2. Verify Supplier Authenticity
The next step after you shortlist suppliers that best fit your requirements is to verify their authenticity. You want to evaluate:
- Whether they are the owner and not a middleman
- Possess the technical expertise needed for manufacturing your products
You can validate the authenticity of your suppliers by asking for product samples, checking their tax receipts, and demand for audited accounts. You can also check with the government and local jurisdiction it falls under to check and verify their registration records and other details.
3. Selecting Quality Product Suppliers
The primary reason for product sourcing from China is the lower costs of manufacturing, shipping, customs, and other charges. However, every supplier has a base price for the desired products required by your business.
In cheaper alternatives, there is a risk of compromising in product delivery or the product packing. From a consumer's point of view, you don’t want products that are low quality or come with average packaging material. Even your customers would not want to buy a high-quality product with crappy packaging.
It’s worth noting that on an average, online sellers/businesses that pay due attention to their packaging report a 30% increase in consumer interest.
Also, find out the average manufacturing value of your product and threshold selling prices, going below which reduces the quality of your product. Doing so helps you in selecting quality product suppliers in China.
4. Be Straightforward in Your Communication
The biggest issues Australian importers and wholesalers face while sourcing from China is the language barrier and cultural differences. Though there will be some Chinese suppliers speaking in English for customer support.
However, since they are not native English speakers, the communication carries the chances of mistakes and misinterpretations. While this may not be deliberate, buyers need to keep this in mind to not make costly mistakes.
Thus, provide all your product specifications and order quantities in writing to leave no space for assumptions in your communication. Still, if there are any questions, encourage the suppliers to ask and clarify them with you directly.
5. Do Regular Inspections for Quality Control
Let’s assume that you have followed all the tips from finding a quality supplier, verifying its authenticity, and being clear in communication. Also, you went a step further and signed an agreement to ensure everything is bound with legal terms.
Even though everything is bound by judicial systems, you should frequently check your sourced products to ensure the quality hasn’t dropped. Doing so will help you keep your promise of delivering high-quality products to end-users.
6. Check MOQ Requirements
Before you finalise the Chinese wholesale suppliers’ list, check their minimum order quantity (MOQ) requirements. MOQ means the minimum quantity a supplier or manufacturer wants us to buy in one go.
Suppliers, many times, quote higher MOQs to finish their stocks as quickly as possible. However, you can always negotiate this requirement to a smaller suitable number you are ready to purchase.
However, this can cost you additional as suppliers would quote more for smaller batches. To avoid this, you can ask for a sample batch and may decide on the MOQ later. This gives them the feeling that you may not always order in smaller batches and increase order quantity in the future.
7. Check If Custom Packaging is Possible
Another thing to consider when sourcing from China is to ask for custom product packaging from the vendor. Doing so ensures end-users don’t face any issues while reading manuals or packaging in mandarin or Chinese letters.
Make your supplier understand the need for custom packaging and ask them to refrain from using such languages if possible. Furthermore, you can choose custom packaging providers to design your own packaging based on the product size and dimensions.
You can also ask Chinese manufacturers if they have a subcontractor to design custom packaging as per your specifications. Though it may take time but can improve the quality and user experience.
8. Give a Heads-Up When There is a Surge of Orders
There are times during the year when the influx of orders is high, and you need to keep your inventory in check to fulfil all the orders. Festivals like Christmas or shopping events like Black Friday or Cyber Monday usually see a spike in traffic and purchase rate.
Thus, you want to ensure buyers don’t leave your eCommerce store without making a purchase. For the same, you must give your China wholesale suppliers a heads-up before such events take place. You want to plan ahead considering the manufacturing, packaging, and shipping times.
These factors can affect the delivery of your containers and impact your sales on Black Friday or other events. So, ensure that your suppliers know about such increased demands well-in advance to not disappoint your customers.
Final Thoughts
In a nutshell, this article provides you with an in-depth guide on product sourcing from China. Keep these tips in mind when starting your journey to finding sourcing allies. But before you make any decisions, complete the due diligence to ensure that the suppliers are legit.
Once everything is finalised, the products will start getting shipped to your warehouses and the only thing you need to take care of is selling them and sending them to your customers. While shipping to end-users is crucial for the success of your eCommerce business, a partner like PACK & SEND is great to have onboard.
We help small to large enterprises ship eCommerce products domestically and internationally to fulfil their on-time delivery promise to customers. Join hands with our network of shipping partners to take your order fulfilment and logistics to the next level.