Product sourcing from China: How to get started
Last updated: 10 Oct 2025
Planning to source products from China to Australia? Here’s everything you need to know
Key takeaways
- Find Chinese suppliers on B2B marketplaces like 1688.com and trade shows like the Canton Fair
- Vet new suppliers through factory audits, company verification reports, or product samples
- Always try to negotiate prices with suppliers
- Choose a payment partner that can help you protect your already-thin profit margins
China remains the leader in global manufacturing, and for good reason. With advanced production capabilities, cost-efficient pricing, and access to millions of suppliers across various product categories, sourcing from China continues to power countless global businesses.
In August 2025, Chinese exports climbed to USD 321.5 billion, a 4.4% year-on-year increase, despite global trade uncertainties and new US tariffs.
If you’re sourcing from China for the first time, or looking to optimise your current workflow, this guide covers everything you need to know: where to find trusted suppliers, how to vet them, negotiate effectively, and make secure international payments.
Table of Contents
Is sourcing from China still worth it in 2026?
Even with rising global competition and increasing costs, China remains the world’s manufacturing powerhouse, and the preferred sourcing destination for most importers and retailers.
Top B2B platforms like 1688.com and Alibaba.com give buyers access to millions of suppliers across nearly every product category. Meanwhile, offline trade fairs like the Canton Fair continue to be a great place to meet vetted manufacturers face to face, discover new products, and negotiate better deals in person.
China’s export numbers to Australia and New Zealand remain strong post-covid, especially in categories that are central to e-commerce and retail supply chains.
- In 2024, Australia imported goods worth roughly US $75.7 billion from China (UN COMTRADE data).
- According to New Zealand’s Ministry of Foreign Affairs & Trade, total imports from China were NZ $17.41 billion, including NZ $16.12 billion in goods and NZ $1.29 billion in services (As of December 2024)
Even as countries like Vietnam, India, and Indonesia gain traction in low-volume or specialized manufacturing, China continues to dominate in high-volume production, vertical supply chains, and global logistics infrastructure.
And with the rise of dropshipping agents, hybrid fulfillment models, and consolidated freight services, sourcing from China has become even more accessible to small and mid-sized businesses.
Benefits of sourcing from China
Streamlined supply chain
For businesses, China offers a sustained supply chain with a robust manufacturing sector. Decades of manufacturing have resulted in a wide ecosystem of suppliers who specialise by sector, forming clusters throughout the country. Each cluster has achieved a sustainable cost advantage due to its specialisation in the sector, accumulated know-how, and network of partners. As a result, manufacturers are able to deliver products at a faster pace and scale.
Competitive production costs
Businesses prefer to source products from China because the product costs to output ratio is highly favourable. Lower production costs lead to lower costs for end customers and high profit margins for businesses. However, costs shouldn’t be the only factor you consider. Quality and delivery timelines are just as important.
Market expansion opportunities
Sourcing products from China gives you the opportunity to expand into the global market.
Most Chinese suppliers have experience handling the regulations and documentation of international shipping and sourcing.
Your Chinese suppliers could directly ship products to Amazon FBA warehouses in the US, allowing you to sell on Amazon US from Australia.
Wide variety of products
You can find a wide range of products through Chinese suppliers and increase the number of SKUs. Manufacturers in China offer customization, allowing businesses to source products in various colours and categories. You can also source white labelled and private labelled products.
Step by step guide to sourcing from China
1. Look for suppliers in China
You can choose from different types of suppliers. The right one will depend on how much you can invest upfront and how involved you want to be in the product sourcing process.
Factories/ Manufacturers
The biggest advantage of sourcing from factories is low unit prices since there is no middleman. Factories have minimum order quantity requirements and considerably longer delivery timelines because manufacturers don’t keep a lot of inventory. Instead, products are manufactured when a bulk order is placed.
Another issue can be a lack of communication. Most domestic suppliers in China only have a basic understanding of English, and you may find it challenging to communicate all of your requirements to them.
Distributors and wholesalers
Some manufacturers follow a direct-to-customer (DTC) strategy for selling products, but most manufacturers partner with intermediaries like distributors and wholesalers to sell large product quantities.
- A distributor has exclusive contracts with manufacturers; they serve as the first point of contact for manufacturers in the supply chain
- Wholesalers buy products in large quantities either directly from manufacturers or distributors and sell those products in smaller quantities to retailers or other B2B buyers
Sourcing agents or virtual factories
A sourcing agent helps businesses find reliable suppliers in China, negotiate the best prices, check product quality, assist with documentation, coordinate delivery with the factory, and manage international shipments. They also communicate with suppliers on your behalf and ensure no communication gaps or miscommunication.
Sourcing agents don’t hold stock. They only help businesses secure products within the required lead time. The payment is typically on a commission basis, where the agent makes a percentage of the total order value.
Sellers who are new to sourcing products from China or are too overwhelmed to deal with the language barrier can hire a sourcing agent to manage the entire sourcing process.
The major disadvantage of working with a sourcing agent is that you don’t have a direct line of communication with the suppliers, making it difficult to establish a long-term business relationship.
How to find suppliers in China
Online marketplaces: B2B marketplaces like 1668.com and Alibaba are some of the easiest ways to find suppliers in China. You can check all the products the supplier offers, communicate with them directly and order online. While Alibaba accepts international payments, 1668.com does not directly support payments from international buyers. Instead, you can sign up for a World Account to pay 1668 suppliers through WorldFirst Cross-border Pay.
Trade shows: A great way to find suppliers and meet them face to face is by going to China for a trade fair. The Canton Fair is one of the biggest trade fairs in China where top suppliers from all over the country set up exhibits to showcase their products to overseas buyers. In last year’s Canton Trade Fair, over 2.7 million products were showcased by 28,000 selected exhibitors.
Google and online groups: A quick way to find suppliers is to search for them on Google and look through Facebook groups. However, you must be careful when connecting with new suppliers online and take proactive steps to verify their identity and business.
2. Verify and vet new suppliers
Before placing a bulk order with a new supplier, perform due diligence and vet them properly.
Here are some steps you can take to vet new suppliers:
Company verification reports: A company verification is the most basic form of due diligence that involves reviewing government databases and records to ensure the company is legitimate, has a registered address, and has been around for a while.
Factory audits: You get a third party to audit the factory. The goal is to assess the factory’s capabilities, compliance, processes, documentation, and overall health.
Factory visits: One of the best ways to vet new suppliers is to visit their factories. This can also be a good opportunity to interact with suppliers face-to-face.
Ask for product samples: If factory inspection or visits are not possible, ask for product samples before placing a bulk order with the supplier. Inspect the sample products properly. If there are any QC issues, let the suppliers know.
3. Negotiate prices with the suppliers
You can always try to negotiate prices with suppliers. There are usually two chances that you will get to negotiate on prices: First is when you get an initial quotation from the supplier and the second is when you receive the samples.
Here are some tips for negotiating with suppliers in China:
Ask about bulk pricing for large orders: Your purchase quantity will be the first question a supplier asks you. If your order is only hitting the supplier’s minimum order quantity, getting a discount will be difficult.
While placing a small first order with a new supplier just to test the waters makes sense, you should still try to see if there is room for price negotiation, even on the first order. Instead of just sharing your initial requirements, share the likely annual order quantity and the frequency of orders that the suppliers can expect if everything goes smoothly.
If the annual order quantity is high enough, suppliers will be more likely to decrease their prices to maintain long-term cooperation with your business.
Build trust: Share information about your business and industry to ensure the suppliers take you seriously. If the suppliers know you have an established business with some products already in the market, you become a compelling prospective customer.
Negotiate on the deposit terms: You can also negotiate on the deposit terms to get a possible discount from suppliers. The usual payment terms of suppliers in China are 30% at the time of placing the order and 70% before shipment (The exact deposit terms can depend on the suppliers and the industries).
You can suggest more favourable terms to the supplier, like putting a 50% deposit upfront to lower prices.
4. Look for a shipping partner
Shipping products from China to Australia or other international locations is more complicated than domestic shipping. Several factors need to be considered, including the type of products being shipped, the countries involved in the shipment, and the shipping mode.
Shipping costs can also vary depending on factors such as package weight, volume, and dimensions, as well as the mode of transportation.
There are various types of shipping methods you can consider, including:
5. Find a payment provider
The last and most important part is to decide how you want to pay suppliers in China. The transfer fees and currency exchange rates shouldn’t cut through your already razor-thin profit margins.
WorldFirst is a global payment provider that supports online sellers in achieving growth through fast, secure, and reliable cross-border payments. SMEs and online sellers can open a multi-currency World Account in minutes and pay suppliers in China like they are just around the corner.
One World Account lets you set up local currency accounts in 15+ currencies, including GBP, USD, CAD, EUR, AUD, NZD, and CNH. Local currency accounts are created under your business’s name. For every currency, you get a separate account number and branch code.
You can send payments to suppliers in 40+ currencies and get access to interbank/ mid-market exchange rates.
With a World Account, you can:
Pay suppliers faster: Send same-day or next-day payments at competitive interbank/mid-market rates (Cut off times apply)
Securely pay 1668 suppliers: WorldFirst Cross-border Pay is the only way to make international payments to suppliers on 1668.com
Collect from marketplaces: Collect payments from 100+ global marketplaces, including Amazon, AliExpress, Etsy, and eBay. Hold the funds to pay suppliers or withdraw funds to your bank account anytime
Protect your profit margins: Lock-in exchange rates for up to 24 months through forward contracts
Send instant payments: Make free and instant between World Accounts.
Keep transactions secure: WorldFirst safeguards customer funds in segregated accounts with leading financial institutions.
What risks to watch out for when importing from China
Sourcing from China offers immense potential, but it also comes with risks that can impact your timelines, product quality, and profit margins if not managed properly. Here are the most common risks faced by Australian and New Zealand importers, and how to mitigate them:
Scams and fake suppliers
Not all suppliers are who they claim to be. Some intermediaries may pose as manufacturers or list fake factory credentials.
How to avoid it:
- Find reliable suppliers in China and take steps to verify their business
- Use a sourcing agent to run background checks or conduct on-ground factory audits
- Always request and verify business licenses, ISO certifications, or export documents
Poor quality control
Products may not match samples or agreed specifications. If you don’t raise issues early, you may end up with a whole warehouse full of poor quality products.
How to avoid it:
- Ask for a Golden Sample and use it as a reference in your purchase contract
- Include clear specifications, packaging, and labelling details
Book third-party quality inspections during production (midway or before shipment)
Unpredictable shipping timelines
Freight delays are common, especially during Chinese New Year, national holidays, or port congestion.
How to avoid it:
- Plan buffer time for freight delays when shipping from China to Australia
- Choose reliable freight forwarders who can provide tracking and customs updates
Consider splitting shipments or using air freight for urgent orders
Language and communication gaps
Suppliers may have limited to no English proficiency which can lead to misunderstandings around product specs, timelines, or payment terms.
How to avoid it:
- Use clear, simple English and confirm all communication in writing
- Avoid verbal agreements, always have a signed purchase contract
- If needed, hire a bilingual sourcing agent or translator to manage key supplier interactions
Unexpected costs
Beyond production costs, importers may face hidden fees for freight, customs duties, and foreign exchange.
How to avoid it:
- Budget for currency conversion fees, especially when paying in USD or RMB
- Use cost breakdown sheets and ask for quotes including all logistics and customs charges
Do you need a sourcing agent, or can you go direct?
Whether you go direct or use a sourcing agent depends on your experience and how much control you want.
Go direct if:
You’ve sourced from China before, have repeat orders, or feel confident managing suppliers and quality checks. Many importers successfully find quality clothing manufacturers or private label manufacturers on their own by using platforms like 1688 or Alibaba.
Use a sourcing agent if:
You’re short on time, new to importing, or want help with things like price negotiation, factory checks or managing production.
Make sourcing with China work for your business
When you source from China, you get access to global manufacturing at scale. But it requires careful planning–from supplier vetting and quality control to logistics and payments.
A trusted cross-border payment solution like WorldFirst can help you simplify transactions, manage currency exchange fluctuations, and ensure funds reach suppliers securely.
FAQs
How do I know if a Chinese supplier is legitimate?
Check their business licence, ask for references, and verify their factory through a third-party audit or a sourcing agent. Many platforms list verified suppliers, but extra checks are still essential.
What is the safest way to pay a Chinese supplier?
The safest way to pay Chinese suppliers is by using an international payment provider like WorldFirst, which supports fast and secure payments in 100+ currencies, including USD CNH. With a World Account, you can hold funds in 15+ currencies, get access to competitive exchange rates, and make same day or next day transfers (cut off timings apply). For buyers on 1688.com, WorldFirst also offers World Pay, the platform is the only authorised international payment solution, so you can safely pay verified suppliers while staying fully compliant with Chinese regulations.
Should I pay the full amount upfront?
No. A common practice is 30% upfront and 70% after production or inspection. Always tie final payment to passing a third-party quality check.
What taxes or duties do I need to pay when importing to Australia?
When importing to Australia, you’ll generally pay:
- Customs duty, typically around 5% of the goods’ customs (FOB) value.
- GST at 10%, applied on the total taxable importation value, including the item cost, insurance, freight, and any duties.
Goods below AUD 1,000 (CIF value) are generally exempt from both duty and GST.
Disclaimer: The information contained is general only and largely our views. Before acting on the information you should consider whether it is appropriate for you, in light of your objectives, financial situation or needs. Although 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, estimates, mentioned products/services and referenced material constitute the author’s own judgement as of the date of the briefing and are subject to change without notice. WorldFirst shall not be responsible for any losses or damages arising from your reliance of such information.
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