We used a contract agreement with a template in this blog post , and Gary has a free resource on his site. Ask around from credible people, and also read reviews. Showing up in China and attempting to haggle a deal yourself without experience or an interpreter is not likely to get you very far.
1. Local trade shows
Duties can vary from shipment to shipment. Make sure the company has a physical address and working telephone number that you have verified Inform yourself about importing rules in your country. Always speak to the supplier directly. Telephone or face to face will personalize the interaction on both sides, which will cause a significant impression. If dealing directly with Chinese business people learn a few words of Mandarin.
It can't hurt, and can easily be done online. Warnings Trying to leave China with a large quantity of goods without the proper paperwork or accounting for duties will never go well.
Don't pay for anything if the supplier doesn't have the stock "in hand", meaning if they're relying on your cash flow to pay for their manufacturing, get out of the deal. Never pay up front for a wholesale shipment from a supplier you're not familiar with. Typically you'll have samples sent, or pay via credit card with purchase security.
Showing up in China and attempting to haggle a deal yourself without experience or an interpreter is not likely to get you very far. In China the status quo is extremely different when it comes to brand infringements. You don't want to be importing goods into the US that you weren't aware are knockoffs of an international brand. Be wary of making payments by international wire or bank transfer unless you have an established relationship with the supplier.
He is giving away a free sourcing bonus pack for Jungle Scout readers who are interested. Chinese culture and values are very different from Western practices, and the difference manifests at every turn.
Trust, respect, face as in meeting in person or at least communicating via Skype , and time invested in the relationship will be the foundation of building good relationships with Chinese suppliers. Guan Xi is an important notion to remember as you deal with Chinese suppliers because you position yourself for a long term business relationship. As a result, suppliers will be more responsive to your requests, will offer more favorable pricing and payment terms, and be more accommodating in fixing problems as they arise.
One important insight that Gary identified is the ethics that Chinese suppliers have. Copying a brand, product, or intellectual property is commonplace.
In order to protect yourself against that fate as much as possible, you have to be extremely vigilant about protecting your product and brand. In order to do this, get everything in writing and monitor your listing. This example shows that business decisions and ethics have a different standard in China and Western countries. The one common bridge between you as Amazon seller and the Chinese supplier is the entrepreneurial spirit and desire to make money.
If you can align your communication around this common goal, you have found the universal language of….. When finding potential suppliers, Alibaba is the behemoth that you should look to first. As the largest online marketplace in China, it has the most quantity of suppliers, but not necessarily high quality.
You can send out a Request for Proposal RFP to many sellers, but the quality of replies may not be great. Not a problem, this is expected. Global Sources is another option for finding suppliers.
There is less quantity, but each supplier must pre-qualify, so the quality of supplier is possibly better. There are additional smaller marketplaces, though not worth referencing because most suppliers can be found on Alibaba or Global Sources. In addition to these online marketplaces, going to trade shows is a great place to find suppliers.
The Canton Fair is the largest, held twice a year in China. However, there are industry-specific trade shows in the US and Europe where you can meet Chinese suppliers in person and build Guan Xi, or your business relationship. This is almost a trick question. If you get a straight answer as in yes, they are the factory and only the factory then they likely are.
You can also guess whether they are a trading company by looking at their product catalog. No supplier has the capability to produce a wide variety of products with many different materials.
Furthermore, trading companies are less knowledgeable about the technical details of a product. For example, when Gary was speaking with one trading company and asked questions about the battery life and charging time for an electronics product, they were unable to answer. Clearly they are not making the product themselves!
Trading companies can offer better service, have better English skills, and even a nice showroom in the city. However, in exchange for this, you are paying a higher price for the product. And down the road, if you encounter problems, whose side will the trading company be on? Your side, or the actual manufacturer?
Furthermore, trading companies may lack in the trust factor and credibility, where the company may disappear overnight if they are especially shady. However, do not judge an address too quickly. You never know where good information can come from. An independent third party can be an excellent idea for a quick cost effective review of potential suppliers before you choose one to visit.
There are many companies in China run by westerners who do this and can provide a good bridge between you and your supplier at the start. Consider accessing the U. This will tell you who their customers are, how loyal those customers are, as well as the volume capabilities of your factory. Import Genius offers these hard-to-find customs records at affordable rates.
Document your product as effectively and as completely as you can. Sometimes, words just aren't enough. Work with suppliers that have already exported their products to Europe or the US. Pay attention to the agent relationship. Many manufacturers may have their products exported to the US in good quantity through a third party supplier without an exclusive supply agreement.
They may want to have direct channels to the US, and that might mean more business for you. Check the factory organization, its process flows, the quality of goods produced, the packaging, the workers' training level, the overall working conditions, equipment maintenance, etc. This will give you an indication of how the company is managed. A face-to-face meeting with the supplier's management team will also give you an idea of their experience and willingness to embark on your project.
You will also be able to create a friendly relationship, which is crucial for your project! Just because a site is ranked higher in Google search listing, this does not necessarily mean it is a more serious business. Some very good Chinese suppliers are not well-versed in having their website listed highly, while some other Internet guys can have their website listed very highly.
Use your industrial judgment. Warnings Beware of cheap electronic products sellers from China. Many online sellers of electronic products in China are fraudulent sellers. Unless you are buying in bulk and the products are shipped legally passing through custom checks, then most likely you are buying the product from retailer or wholesaler who do not have export license. This means there is no way to know whether the product is Real or Imitation unless you are an expert.
Famous brands will not allow their supplier to sell below their normal selling cost, therefore the suppliers are either selling illegally or it is actually an imitation. Be careful with suppliers sub-contracting your order! When facing a backlog of deliveries, Chinese suppliers usually sub-contract them partially or in full, without taking the precaution to inform their clients!
Most of the times this leads to sub-standard deliveries If you send out inquiries you will get tons of replies from suppliers of all kinds. Some guys may continuously send you product info for years, and are able to pass through all sorts spam protection.
PS Peter Saz Aug 26, A Anonymous Feb 28, I've learned a lot of things, and I'll use it as my guide. A Anonymous Jun 9, CF Char Fortney Jul 6, ES Emily Soto May 11,
Online directories of overseas manufacturers, such as Global Sources and Alibaba; Your nearest Small Business Development Center (SBDC) or SCORE office; International trade shows. While there are trade shows in China where you can meet manufacturers, a better place to start is attending U.S. trade shows that attract Chinese manufacturers. Trade Show News Network has global trade show listings. At the . The easiest way to find supplier on Google is by searching “[Product] + supplier from China. It is a fast way to find supplier companies. Although it’s free, it also comes with its own risks, i.e they may not be legit suppliers from china, so you have to do due diligence to verify them. Jan 06, · You will also find it hard to discover information about the supply chain, and you will still need to be on the lookout for product quality issues. Sourcing goods in China poses many risks for U.S. companies, ranging from poor quality goods to fraud to difficulty in enforcing contracts.