It is no small decision to start a business whether it is a traditional face-to-face, online or blend of both. You are going to need products, quality products that people want and need, but you need to sell them at a reasonable price for a reasonable profit. China is leader in sourcing products for businesses across the world. Sourcing Nova explains why sourcing products from China is good fiscal sense for your business.
When you walk into any retail outlet, you will find it difficult to find something that is not made in China. Now most of the big companies, including Home Depot, Target, Wal-mart, Wayfair and others have a buying office somewhere in China. These multi-million dollar companies are more and more often buying products made in China. This is because those products can meet the particular company’s most stringent standards in terms of price, quality and lead time.
Sourcing From China –
A Brief History:
Since entering the WTO, World Trade Organization, China has opened a market economy to the world. For SMEs, small or medium sized entrepreneurs, the good news is that the process of sourcing products from China is becoming easier; the bad news is that more and more international buyers are now starting to purchase directly from China. This has drastically increased competition. For many sellers, it is not a question of whether to purchase from China; rather, the question is how to better purchase from China.
Why China for products
Before the rapid development of China’s manufacturing industry, many large international companies would choose Japan, South Korea and Taiwan to source products for import. Compared with developed countries in Europe and the United States, these Asian countries had lower purchase prices even with importation fees. This era has since passed, and these Asian countries have no real price advantage over China. A large reason for this is China’s low-cost manufacturing. Current predictions point to manufacturing costs will not increase sharply within the next 10-15 years. This is an ideal situation for a small to medium sized business in the West looking for quality products.
In terms of price alone, Vietnam, Thailand, Bangladesh and India have cheaper labor costs than China, but these countries cannot compete with China in terms of infrastructure and industrial variety. China has a complete industrial system, capable of producing parts and components for manufacturing of almost any product. This means there is almost no need to import raw materials from abroad. Additionally, China has some of the most advanced logistics for transportation of raw materials in the world. This internal combined system works to the advantage of the Western buyer as cost savings are passed along to them.
China’s industrial planning matrix is very meticulous and well-developed for product manufacturing. Factory A handles tooling; factory B is responsible for raw materials and components; factory C is responsible for packaging materials and factory D assembles everything for export. These upstream and downstream companies in the supply chain are concentrated together, and positive relationships exist between factory owners in the matrix. This positive relationship is due to Guanxi, the interwoven business relationship custom between companies and manufacturers in China.
There are many benefits of sourcing products from Chinese factories. For Example:
- Historically, retailers had to buy from importers and distributors. This business model has an obvious disadvantage: many sellers sell the same product at the same time. If your competitors reduce their selling prices, you will face a dilemma: if you also lower the selling price, profits will decrease; if you do not lower the selling price, the sales will decrease. It is difficult for you to ask the importer to lower your purchase price on products.
- You may be able to enter a niche market and corner it. If you have a product in a new market, you are the first person on the market to sell it. You are the only seller, and now you can build a “moat,” what amounts to a barrier of protection, for yourself. You can contact Chinese manufacturers directly to see what products you can import. You then have options on what you could sell or complement your available products. You can even design a product yourself, brand it yourself and build your own personal brand.
- Low manufacturing cost and excellent quality products mean happier customers and a larger profit margin for you, the business owner.
- There are many small manufacturing companies in China that are more open to MOQ, minimum order quantity, and these smaller companies can accept small batch orders of imported products.
- There are many products produced only in China and are found nowhere else in the world.
- China has highly developed e-commerce websites such as alibaba and DHgate, as well as purchasing agent websites similar to Sourcing Nova. This competition means entrepreneurs have more producers to choose from for the products they import and sell.
For many people who are interested in starting a business, including you, sourcing goods directly from China and selling them in your country is one of the best opportunities available to make money and turn a profit. This method means less stress on you and your business, allowing greater clarity and focus on the customer and profits.
Why A Sourcing Agent and not direct contact
- If you cannot find importable products of high quality, no matter how great your marketing ability is, the more you sell, the greater the risk you take on a backfire against you and your business. Inferior products only lead to negative reviews. Customers are less likely to return to you for your inferior products and choose your competition. Major e-commerce sites like Amazon do not take negative reviews lightly, and the chances of your Amazon e-store closing due to negative reviews is a very high possibility. You may lose your business and take a chance of bankruptcy.
- Most small and medium-sized manufacturing enterprises within China do not have foreign language proficiency, which is quite inconvenient for daily communication. A severe lack of communication skills leads to serious mistakes and errors in order processing, shipping, receiving and billing.
- China is a vast land area with many specialized industrial specific areas. Westerners may not know the locations of the best and choice factories for imported product manufacturing.
- There are huge differences between the cultures of China and Western countries. In China, you cannot move forward without ‘Guanxi.’ This business concept is unique to China and is difficult for Westerners to understand. A failure to understand guanxi makes trade difficult for both parties.
- Customs clearance is cumbersome. This is a real hassle for small businesses who depend on their imported products.
- Chinese companies are accustomed to receiving payment before shipment. This means the Western importing company will take a risk on payment and investment. Chinese sourcing agencies with strong guanxi do not have a problem with advanced payments.
These are real barriers you will encounter trying to source products directly with Chinese manufacturing. Your best option is to find a reliable sourcing agent. Sourcing Nova is your perfect solution.
Sourcing Nova is the best
- We are familiar with the distribution of China’s industrial specific areas and know where to find different products for your specific needs.
- We have a good relationship with the organizers of the Canton Fair. We can easily find the contact information of factory leaders of previous exhibitors. We have contact information of hundreds of thousands of factories and can directly find manufacturers in any industry.
- We can access the customs import & export data of many countries and have access to the suppliers of many of the largest companies in the world. There are many first-class companies whose imported products are made in China. These products are of solid quality, low price and hold many international certifications. As long as your business can meet quantity demands, we can find these big factories to produce world-class quality products for you.
- We are proficient in English and communicate with customers without any obstacles. We are native Chinese, and we are fluent in both Cantonese and Mandarin. We have no obstacles of communication with any of the factories in China.
- Our team has members who are very good at interpersonal communication. We were born in China, grew up in China, grew up in guanxi and actively maintain guanxi with all manufacturers in our matrix. Our team also has an American citizen on staff who can explain cultural differences. A normal encounter as a part of daily business.
- Our team has a member with 15 years of experience in international logistics and importing products. He works and lives in Yantian, Shenzhen. He maintains a positive relationship with the management of many shipping companies. He has a good relationship with the owners of various warehouses and land transportation companies. He often deals with customs staff of many western countries. He has the professional ability to handle all issues related to customs and logistics. As long as your product meets the relevant regulations, you do not need to worry about formalities or documents at all. Sourcing Nova will take care of 100 percent of these needs.
- We are familiar with the staff of many inspection companies. Regardless of the province in which the manufacturing company is located, we can arrange staff to inspect the factory and ensure that the quality of your products meets the expected standards before importation.
- Concerns over scammers and lost payments is a very real thing. Instead of paying the Chinese factories directly and taking a chance on losing money, Sourcing Nova recommends paying us for your products. We will, in turn, use guanxi and make the payments to the factories on your behalf. This makes for a safer and much more secure transaction.
Sourcing Nova is your sourcing agent in China and your eyes and ears in China. For a reasonable fee, we can help you find the best quality producers in China, manage the production and transportation process throughout and transport the products safely to the import destination you specified. These tedious procedures need to be the last of your worries. We at Sourcing Nova will handle everything until the products arrive at your location. This allows you to concentrate on your customers, employees and turning a profit.
There are many challenges when dealing with international sourcing and importation of products, and this makes Chinese product sourcing well worth the cost and effort. It is evident the pros far outweigh the cons when it comes to international sourcing.
Is there a specific product you would like to source from a Chinese supplier? Sourcing Nova can find virtually anything you want. What can we do for you? It is time to stop thinking about product sourcing from China and do it. Contact Sourcing Nova today, and let us show you how we can help your business become profitable.