Tips on How to Find Quality Chinese Suppliers
By Jane M Dawson
Chinese suppliers are plenty owing to low production costs in China. If you're interested in finding a Chinese supplier, they're easy to find. Just visit a search engine and do a search by simply entering the name of the product that you want to sell in the retail market. The search engine will bring up long lists of Chinese suppliers with whom you can get in touch. However, if you are wary about their reliability, and want to find someone who is not only capable, but also legitimate, caters to your requirements, and has an eagerness to work with you, you need guidance. Many dealers who interact with Chinese suppliers often find themselves getting extremely frustrated because their business is not very successful. It is very likely they did not find the right Chinese supplier from the start of their business. To ensure that you find the right supplier in China, you need to have a strategy. You need to be constantly vigilant, have thorough knowledge of the field, and do your homework. Here are a few tips to help you.
Understand your requirements
Your primary task in finding a reliable Chinese supplier is to clearly know and understand your requirements. You need to understand exactly what kind of supplier you are looking for.
Research: The first step to understanding your needs is carrying out research. You need to research the following:
Category:Prior to selecting a category, you need to first do some research to develop a category system. You can use the Internet for your research, and record your findings in a data table. The table must comprise columns such as name of the company, contact information, scale and scope of the business, check boxes for each category, and notes, among others.
Product:You should also carry out research on the product that you want to sell. Use search engines for this. The first hundred results that show up are websites that have the most relevance to your product. It is imperative that you also find information regarding your competitors to gain a better understanding of the market as well as the various marketing strategies they are using to boost their business.
Select a category: Once you have created your list of categories, you can make your choice.Here's a list of categories that you can choose from:
- A manufacturer versus a third-party supplier
- A large corporation versus a small family-owned business
- A third-party supplier who has the capability of developing products in-house versus a third-party supplier who simply purchases-in and sells-out
- A manufacturer who is vertically integrated versus a manufacturer who is assembly-based
Once you categorize your suppliers properly, you will be able to understand your needs. For instance, if your business entails importing products that don't have much variety, you may choose a manufacturer instead of a third-party supplier. If, however, you have a small business and require special attention, your objective is to establish a good relationship with a small business that is family-owned.
Identify suppliers
Having understood the type of supplier you need to find, the next step involves finding that supplier to cater to your needs. Here's how you can do this.
Search the Internet:Two decades ago you would have delved into trade magazines to find manufacturers or suppliers. However, today you begin your search online.
Business directories:There are many business directory sites you can visit to find information on Chinese suppliers. These websites also help you to gain in-depth knowledge of the business world.You can visit supplier directories like "Global Sources" that provide lists of innumerable Chinese suppliers with their products. Another option is to visit the website of China Sourcing Reports. Here you'll find reports of suppliers in China based on extensive research.
Supplier websites:It is recommended that you not visit a supplier's English website, as the interpretation could be incorrect. Besides, if you find a site having a higher rank in one of the search engines, it does not imply that it is involved in more business. There are many Chinese suppliers who are not well-versed with the concept of rankings in search engines. However, they do better business than others who may have good knowledge of how to get their website a high ranking in a search engine. So, you need to use your discretion and industrial judgment to select a supplier.
Read magazines:If you are looking for an overall perspective, Global Sources Trade Magazines are your best option. These magazines give free sample copies. If you like what you see, you can choose to subscribe to the magazine. What's more, readers are now given the option of reading the free samples online, that is, in e-magazine format.
Attend trade shows: This is the best way to interact with suppliers face to face. In the U.S. and Europe, only a few China manufacturers attend trade shows that are organized locally. You'll find a larger number of Chinese suppliers in the shows that are held in China and Hong Kong. The China Sourcing Fairs and Canton Trade Show are two trade shows that are organized in Hong Kong and China, respectively. Both take place bi-annually. The former also includes an Electronics show, Gifts & Home show, Fashion Accessories and Underwear & Swimwear show. You will get updates on trade shows that have take place recently, as well as those that will take place in the future at the Trade Show Center.
Seek advice: Another way of learning about Chinese suppliers is by seeking advice from Chinese professionals. They will give you an insight on the culture and business practices of the country, as well as the Chinese mentality.
Select suppliers
Select your supplier: After you have done your research on Chinese suppliers that you are interested in working with, but are still unsure who you want to actually do business with, it is time to make contact.After interacting and developing a relationship with them, you'll be able to decide who you want to do business with. You'll find the entire process both fun and insightful.
Explain your business:Once you have decided on which supplier you want to do business with, get in touch with them. Begin by explaining the business you are involved in.
Ask for samples:Put forward a request for samples of the product which interests you. You may have to incur the costs of shipping as well as the product via wire transfer. When you receive the samples, make sure to inspect the product and its packaging, besides reading the instructions.
Ask questions: As an importer, you will need to follow certain regulations for importing your product. You need to know what these regulations are. Ask your supplier whether the products they are supplying you have been exported to your area before and what certifications are needed. Another option is to visit your local retailer to find out the certifications that are required for similar items.
Interact frequently: It is crucial to frequently interact with your supplier. Talk to your supplier regarding the product, transaction, lead times, and dates of completion of a manufactured product.
When selecting a supplier, be sure to take note of the following:
Information:Do not trust any information that you get. For instance, sometimes an email address can provide a lot of useful information about suppliers in China who are relevant to your business. However, you need to be careful and ensure that the source of the information is genuine.
Communication:
Language:The person who makes the decisions in the company may not have knowledge of English. However, make it your job to speak to the top management that does know English and develop a long-term relationship with them. If you don't speak Chinese, a good idea would be to hire a third-party to act as an intermediary and find out information about the supplier.
Correspondence:When it comes to finding out product specifications, price list, and catalogues, an exchange of emails is always recommended.
Understanding:If you want to cement a good relationship with your supplier, you should meet with him or her. If a meeting is difficult to organize, a phone call is your next best option. This gives you the opportunity to get to know your supplier, bringing your relationship to a more friendly level rather than keeping it strictly formal.
Experience: It is always better to do business with those Chinese suppliers who have previously exported their products to the U.S. and Europe. You'll find many suppliers who use third-party suppliers to export their goods to the US without even having an exclusive supply contract. This in turn gives you the opportunity to do more business.
Verification: To verify whether the supplier that you are about to deal with is genuine or not, consider:
Looking at the U.S. customs records:Here you'll find a list of the products they have shipped to the country. You'll be able to know the customers they are doing business with, the loyalty of their customers and how capable the factory is in producing volumes.
Hiring a third party: There are numerous companies in China which are owned by westerners and act as third parties. They can provide you with information regarding the supplier you are interested in doing business with. In other words, they bridge the gap between you and your supplier.
Visiting your supplier's production site: The only way to really know your supplier's capabilities is to make a visit their production site in China. Verify if the information you have researched is exactly what you see at the site. Check if the supplier has applied ISO and Quality principles. Look into the organization of the factory, the process of manufacturing, maintenance of equipment, and working conditions as well, to determine if it meets quality standards. This will tell you if the company is managed well or not. Try to have a face-to-face interaction with the management team. This not only reaffirms your decision on dealing with the supplier, but also creates a friendly relationship.
Pay suppliers
Shipping:The first time you communicate with your China supplier, make sure to discuss the terms of trade. You can choose "FOB Hong Kong," which suggests that your supplier will pay for shipping the merchandize to the port of Hong Kong and you will incur the costs of shipping them from Hong Kong to your warehouse.
Payment procedure:You are welcome to negotiate the payment terms with your supplier. However, the common trend is that you pay 30% at the time the order is placed and 70% when the merchandize is shipped. When you pay the 30%, you are giving the manufacturer enough money to buy raw materials essential for your order. Some buyers negotiate terms such as 30% when an order is placed, 55% with the goods are shipped and 15% when they receive the goods. The best way to pay is via wire transfers. The international wire transfers that take place worldwide vary from bank to bank.
Contract: Ensure that your contract or purchase order clearly states the penalties that your supplier will face if any problems arise.
Quality control
After you have done the research to find a supplier, then finally selected one, placed an order with him or her and paidfor it, you now have to decide on the quality control methods you will use. Usually quality control starts well before manufacturing begins. So, after you've seen the sample of the product, question your supplier about what steps he or she takes to keep quality under check. The quality of a product depends on the raw materials that a manufacturer uses as well as steps taken continuously during the process of manufacturing. The moment your order is ready, you are faced with three options to keep the quality of the products in check. They are:
Depend solely on the steps taken by your supplier for quality control:If the order you are placing is a small one, it is recommended that you rely on your supplier's methods to keep the quality of the product in control. If it is a large order, this is not your best choice.
Hire someone in your company to manage quality control: You have your resources in China. Use them to keep a watch on the quality of the product, right from the time the raw materials are purchased, to when the products are finally ready, and even during the intermediate stage.
Hire a third party to manage quality control: If the order you are placing is extremely large, you should hire a third party inspection company to do the job.
Warnings: You should beware of the following:
Sending out inquiries is a way of contacting suppliers. When you do that, you are sure to receive many replies. In fact, there are some who will continuously send you information on their products for years. What's more, they will not show up as spam. So, when registering as these websites, it is recommended that you not use your primary email account.
There are some Chinese suppliers who sub-contract your order. In other words, if they have a backlog of deliveries, they sub-contract them, either partially or completely without informing their clients. Fraudulent sellers have flooded the markets in China. This pertains especially to those selling cheap electronic items. In fact, now you'll find such sellers online waiting to pounce on inexperienced and naïve retailers. When you purchase in bulk, the products that are shipped have to pass through customs. If they don't, it suggests that your wholesaler or retailer does not have an export license and the product is probably a fake. A famous brand will never allow its suppliers to sell below the actual selling cost. So, if you find a supplier selling product dirt cheap, you can rest assured that the product is either being sold illegally or is an imitation.
If your order only takes up 1% of a factory's volume, be prepared to face delays in delivery. This is because those customers who have larger orders will push for their deliveries. Also note that some suppliers in China grow rapidly. If you comprise 15% of its capacity in one year, after three years it might just be a meager 5%.
You should avoid a Chinese supplier's busiest time of production. This will result in delays in delivery and poor quality of products.
If you have a small business and is interested in only purchasing a few units of a particular product, you may not be entertained by domestic or international manufacturers. However, if you have had success in your business so far and are seen as someone who has potential to further increase sales, you may just get the attention of a manufacturer.
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