Once you’ve got a quality product, you need to find the right supplier, and China could be the place to serve your needs in 2021.
You have sifted through hours of product research looking for your very own niche product however, you have yet to find your supplier for your product. China is just the right country to serve your product supply needs.
China is seen as the global manufacturing hub, it makes perfect sense – buying your product at low prices and reselling them online at a higher price either on your Shopify store, Amazon US or your brick and mortar stores. China allows this to take place due to a few key factors:
- Established manufacturing infrastructure resulting in mass production and economies of scale
- Lower wages (which are typically the largest cost to business)
- Materials are easily sourceable
You can probably see the dollar bills floating around – so let’s keep this journey going and dive straight in!
How to find suppliers in China
Finding the right supplier in China is important as it can either make or break the beginnings of your e-commerce store. Having a reliable supplier will ensure your product is of the highest quality, reducing customer complaints that may result in a potential loss for the business either in the form of refunds or brand reputation.
Therefore, picking your supplier isn’t as easy as online shopping, however it is strongly recommended to have a good strategy, solid knowledge of the processes and plenty of research to back up your decision.
Check Online directories
Alibaba is the largest and most commonly used marketplace to find suppliers in China. A majority of their listings are made directly by manufacturers allowing you to speak directly to them regarding any requirements or standard expectations of your product. Albeit, there may be communication issues, it is important to be clear, direct and respectful when communicating your requests. Here are a couple of tips on how to find a reliable supplier on Alibaba:
Are they reliable suppliers?
Alibaba’s goal is to create a safe and easy buying environment for the customer. To facilitate this, they’ve created supplier profiles available next to products that are verified by Alibaba – this gives you a better idea of whether the suppliers are reliable and safe.
Another such method Alibaba employs is Alibaba Trade Assurance.
Alibaba Trade Assurance is a free program that protects customers until the product arrives and meets your expectations. If your product doesn’t arrive at requirements Alibaba guarantees your money back and will also handle any disputes on your behalf. Alibaba’s Trade Assurance has also started a credit-rating system giving suppliers motivation to ensure on-time production and delivery.
Network with people who’ve done it before
Word of mouth referrals are the easiest and safest avenue when looking for reliable results. These referrals are advocates due to the services they received and you are likely to receive the same experience. Therefore, it is always good to ask your network for any supplier recommendations they may have from Alibaba they’ve previously used to allow you to follow suit accordingly.
If you’ve extended beyond your network with no luck, other great referral avenues include private groups on social media platforms like Facebook, LinkedIn, and online forums. These are great alternatives as there are hundreds of groups with similar business needs who have worked with a supplier themselves for similar products from Alibaba.
Visit Trade shows & webinars
If you much prefer face to face interactions with prospective manufacturers and suppliers, this is an excellent way to do so both in China and locally. Attending such fairs can give you a better understanding of the large scale and exhaustive products and the availability of products that make China known as the world’s top manufacturing country.
As you can expect, there are plenty of trade fairs in China both small and large, however, we will deep dive into the biggest trade fair held in China that has created a worldwide reputation connecting buying and sellers from all over the world.
The Canton Fair is held twice a year in Guangzhou, China in April and October. Beginning 63 years ago and up to its 126th event, the fair brings nearly 26,000 exhibitors and over 200,000 buyers from 210 countries! The extensive range of categories will give you a greater understanding of the market as well as the latest trends you may want to add to your product line. As the Canton Fair is predominantly for international buyers, there is a key focus on ensuring multiple language assistance for the variety of different country attendees.
Amongst the global pandemic of 2020 which has halted global trade and travel, the 127th Canton Fair had to still carry on and was held virtually from June 15th to June 24th. This set forward a new path for international trade with 26,000 exhibitors displaying their products and negotiating with buyers virtually.
Image Source: Sapore Di Cina
Local trade shows
If you aren’t looking to embark on long-distance travel, there are also local options which gather Chinese suppliers under one roof. These local trade show fairs are beneficial for local buyers as it allows you to begin building relationships with potential suppliers and inspect products available, albeit at a much smaller scale. Listed below are two of the most reputable Aus-China trade shows held annually.
The Australia-China Trade Expo (ACTE) is held annually in Melbourne which attracts approximately 10,000 buyers. The ACTE is not solely Chinese exhibitors but rather a showcase of the epitome and symbol of economy and trade developments between Australia, New Zealand, and China with trade suppliers from each of these regions.
The Alibaba Ecosystem Expo will be held next year in Melbourne from March 19-20. The interactive 2-day expo will also include practical case studies of Australian and New Zealand businesses that will share lessons learned and successes to explore trade opportunities in China. The Alibaba Ecosystem Expo is also a perfect opportunity to grow your network with potential suppliers within the ecosystem that will have exhibition stands to connect. Panel discussions are also one of the key highlights of the 2-day event with plenty of value-added discussions between ANZ brands on how to maximize the opportunity through the Alibaba Ecosystem. Last year’s event was held in Sydney bringing together over 147+ exhibitors at ICC Sydney.
You’ve shortlisted your suppliers – what’s next?
You’ve done your research, picked a short-list of suppliers for your product but what’s next? Below are a few considerations to run-through with your selected few suppliers to see if they can meet your business requirements.
Request for samples
Sampling is an extremely important part of the process once you’ve found your supplier. Products may look good in images or at exhibition stands at trade shows, however, sampling also gives you a broader idea of the supplier’s ability to deliver acceptable quality, design, and functionality of your product before a large commitment for mass production.
An expensive lesson learned from Don Robertson, founder of stax.com.au, who stated on the most recent Alibaba Digital Day 2020, that a large number of basketball jersey’s he’d ordered without any sampling had to be disposed of due to poor product quality. This is a great example of the importance of sampling your products before mass production and also finding suppliers within the Alibaba Trade Assurance program, mentioned above.
Enquire about production times
Production times are typically dependent on the suppliers’ capacity. This is an important factor to consider as it gives you a better understanding of the supplier’s turnaround times for your products, allowing you to plan your supply chain management taking into account the manufacturing output of your supplier. Working hand in hand whilst asking for samples will also give you an idea of other important factors such as communication, shipping times, and product quality.
Minimum order quantities
Minimum order quantities (MOQ) refer to minimum order requirements from the supplier. Often mistaken as a solid figure provided by the supplier, this is a negotiable amount that is supplier dependent and . Following the basic understanding of economies of scale, reducing your minimum order quantity will result in an increase in production costs. Therefore, it is important to calculate the optimal amount of stock required at any given time to avoid holding excess stock which negatively impacts profitability.
How to make payments to suppliers
WorldFirst is international payments experts who have transferred over $150M around the globe for more than 250K customers since 2004. We specialize in making international transfers that are cheap, fast & secure to China in USD.
- Money transfers up to 8x cheaper than the banks with transparent pricing of 0.60% or less.
- Access to local currency accounts in USD, GBP, EUR, JPY, CAD, CNH, HKD, AUD, SGD & NZD; all integrated with Xero.
- Award-winning service from your dedicated account manager or transfer online 24/7.
These comments are the views and opinions of the author and should not be construed as advice. You should act using your own information and judgement.
Whilst information has been obtained from and is based upon multiple sources the author believes to be reliable, we do not guarantee its accuracy and it may be incomplete or condensed.
All opinions and estimates constitute the author’s own judgement as of the date of the briefing and are subject to change without notice.
Please consider FX derivatives are high risk, provide volatile returns and do not guarantee profits.