Finding Suppliers In China

Are you looking to sell your own branded private label products online and are you having problems finding a supplier in China to make what you want to sell?

 Well if so then using a china sourcing agent can save you both time and money and i have used a sourcing agent for my e-commerce store over at Mini Mini Garments and i have found success finding factories that will produce practically anything that i want, so in this blog i will break down all the trade-offs and costs with using a China sourcing agent and other methods of sourcing from China.

A sourcing agent is a specialist that connects you with factories in china to produce your products and they can also help you with packaging your products shipping your products quality control and price negotiation now a good sourcing agent typically lives in china and acts as your trusted advisor on the ground they’ll help you locate manufacturers that you cannot find on directories like Alibaba or global sources.

They also have a strong network of trusted factories freight forwarders and inspection companies for your review. now i will have to go over the pros and cons of using a china sourcing agent and whether they are worth the money?

Now how do you source from china well when it comes to importing products from china there are six basic steps that you must follow you have to know exactly what you want to sell you must identify a chinese supplier that can manufacture your products you must work with your supplier to create a golden sample you must negotiate with your supplier on cost for your first bulk order you must hire an inspector for quality control and then you must manage the logistics for shipping stuff to your warehouse now once you’ve found a reliable supplier managing all of the above is relatively straightforward but when you’re first starting out it can actually be intimidating to source your first product from china.

Here are your options and overall there are five main ways to source private label products from china.

1.Directories & Trade Shows

You can find your own suppliers with directories and trade shows, finding your own wholesale suppliers is by far the cheapest way to source your products from china and using a directory like Alibaba or global sources you can quickly and easily find factories to manufacture the products that you want to sell in addition you can use the jungle scout supplier database to find out which factories your competitors are using now here’s how it works every shipment that arrives to the us by Sea is documented on the public record the jungle scout supplier database allows you to browse these records to find suppliers for any brand here’s a blog that tells how to use this tool now if you’re willing to travel attending the canton fair is a great place to meet thousands of suppliers in person all in the same place now while finding your own suppliers is convenient and inexpensive you have to know what you’re doing so for example you must learn how to approach a supplier and negotiate the lowest price you must learn how to perform quality control and import products from china and you must learn how to manage your own supply chain.

2.Hire a Sourcing Agent

A sourcing agent is an individual that helps you connect with reliable manufacturers and they are responsible for pre-vetting your suppliers and find the best factory that meets your specific needs a sourcing agent will also negotiate on your behalf and act as a liaison with your supplier in addition most sourcing agents have a rolodex a reliable freight forwarders and customs agents to manage your entire supply chain so overall a sourcing agent will save you time but their service comes at a price now china sourcing agents are typically paid a flat rate for their services or by taking a percentage commission based on the overall cost of your order.

3.Trading Company

Buy from a trading company now a trading company is a middleman that works with many different factories across the entire supply chain to provide you with products to sell however you have limited customization options and you must sell what’s already in their catalog now buying from a trading company is a good option if you’re on a budget and you can’t afford the high minimum order quantities of a factory in china.

4.Yiwu Market

Yiwu Market, located in Yiwu City, Zhejiang Province, China, stands as one of the world’s largest wholesale markets. Renowned for its vast selection of small and affordable goods, it boasts over 75,000 shops offering more than 500,000 different products. Operating year-round (except for specific holidays), it is recognized as the largest export center in China.

Advantages of Yiwu Market

Unlike trade shows like the Canton Fair or Global Sources, which occur semi-annually, Yiwu Market is open continuously. This provides the benefit of immediate shipping to your warehouse due to its proximity to major shipping ports, ensuring reasonable costs. While the market primarily caters to retailers and trading companies, it also features suppliers offering low-cost commodity products like accessories, handbags, and textiles.

Online Access: Yiwu Go

For those unable to visit China, Yiwu Go serves as the official website of Yiwu Market. It showcases the market’s 75,000 shops, offering a 360-degree panoramic display for an immersive online experience. The Yiwu Go mobile app further facilitates browsing and shopping directly from your phone.Even if you don’t know the name of your product you can search image also, just make sure that you have wechat installed in your phone because most suppliers in Yiwu are only available on wechat.

Yiwu Market is suitable for buyers looking to source low-cost commodity goods with low minimum order quantities (MOQs). Products such as ornaments, accessories, crafts, toys, textiles, office products, and other low-dollar items are prevalent. Approximately 20-30% of shop owners are direct factories, while the rest are trading companies.

Regulations for Certain Products

For products like children’s items or electronics, understanding regulations is crucial. Certifications such as CPSIA (Consumer Product Safety Improvement Act) for toys and children’s products and FCC (Federal Communications Commission) for communication and electronic devices need consideration.

5.Service Company

A service company is a business that specializes in helping you find a reliable supplier negotiate cost perform quality control and manage freight forwarding now working with a service company is similar to hiring an individual sourcing agent except that service companies typically do not give you the contact information of your factory in fact most service companies keep their supplier contacts tight to their vests because their network is their main value add now similar to a sourcing agent service companies take a commission based on a percentage of the overall order cost.

 Why should you use a china sourcing agent? Well even though you must pay a china sourcing agent a commission based on the cost of your inventory, they can save you both money and time now establishing contact and building trust with a chinese factory is not easy because most large manufacturers are not willing to work with random buyers you must establish a relationship first now a good sourcing agent already has close ties with many different factories and combined new manufacturers that would normally not give you the time of day in addition many top tier suppliers cannot be found on Alibaba and in some cases the best suppliers online can only be accessed by a native china sourcing agent with established ties

Main Benefits of Using a China Sourcing Agent

A China sourcing agent can offer several advantages in the process of procuring products. They can assist in pre-screening factories, negotiate prices on your behalf, facilitate communication with factories, conduct quality control and inspections, find low-cost freight forwarders for shipping, and even help you explore new factories to ensure the best prices. Having backup suppliers is also beneficial to address production mishaps or product shortages.

Cost of a China Sourcing Agent

The cost of a China sourcing agent is typically a commission fee based on the cost of your order. The percentage charge often decreases as your order size increases. For example, Jinx Sourcing, a sourcing company that i have used in past, charges a flat fee of $100 for orders below a thousand dollars, approximately 7.5% for orders under 10k, and 5% for orders over 30k. It’s crucial to note that after the first order, future orders are usually required to be placed through your sourcing agent, and direct dealings with the factory may be frowned upon.

Questions to Ask Before Hiring a Sourcing Agent

When considering a sourcing agent, it’s essential to ask specific questions:

• Payment Terms: Inquire about payment terms, including any required deposits.
• Quality Control: Understand how quality control is handled and whether inspection services are provided.
• Factory Visits: Check if the agent visits factories to ensure ethical production practices.
• Referrals: Ask for referrals from happy customers in your home country.
• Production Updates: Understand the frequency of production updates and the communication channels.
• Guarantees: Inquire about guarantees for late shipments or poor-quality goods.
• Location: Prefer agents located close to your factory for better accessibility.

Pros and Cons of Using a China Sourcing Agent

Let’s explore the pros and cons of opting for a China sourcing agent compared to finding your own suppliers via Alibaba or attending trade shows like the Canton Fair.

Pros:

• Time Savings: Sourcing agents have a pre-vetted network of manufacturers, saving you time.
• Communication: Agents facilitate smooth communication between you and the factory.
• Production Expertise: Sourcing agents bring experience in sourcing products and can guide newcomers.
• Quality Control: Agents have in-house staff or inspection agencies to ensure product quality.
• Accessibility: Agents can directly address issues at the factory.

Cons:

• Extra Cost: Sourcing agents charge a percentage of the goods, impacting margins.
• Single Point of Failure: Dependence on an agent, and if they quit, you may lose your supplier.
• Potential Back-End Deals: Agents may be incentivized to work with specific factories for incentives.

Conclusion

In my opinion Whether to buy from Yiwu Market, Sourcing Agents or directly from Companies depends on your specific needs. If you seek mass-market commodities with low MOQs, Yiwu Market is an ideal place. However, keep in mind that most items are relatively inexpensive, and customization options are limited. If you are looking for long term relation and good quality products my personal opinion is that you must visit Canton Fair and visit your supplier factory because when you visit your supplier factory they develop different perspective for you, they treat you as a serious buyer and takes special care when producing goods for you.

Interested in learning about selling physical products online, feel free to reach me out.