China sourcing ultimate guide Part 1

[yuhaoroman]

By Steven Chow, from China business and legal consultation - chinawhy.net


China sourcing makes the headline in every main media. One fact can indicate how hot it is. Chinawhy have recently launched a PPC campaign on Adwords to promote China product sourcing service, we didn't make to first page when raising the bidding price to 1USD/click. In this article, we will try to cover all the issues and challenges you are facing when sourcing from China, including: find suppliers, screen and verify suppliers, price negotiation, contract negotiation, production coordination(follow-on), quality inspection, shipping arrangement, etc.

1. Find China suppliers
a. Chinese Trade fair
The best place to find reliable China suppliers is to attend Canton Fair, which is the biggest trade fair in China. In 2008, more than 10,000 Chinese companies have attended Canton fair(spring session). The Canton fair organization committee set a very high threshold for exhibition companies, let us take textile industry for example, only companies with more than 3 million USD export turnover in last year are qualified to attend Canton fair(For companies from eastern part of China, the limit for western China company is 1 million USD).

So the suppliers you met in Canton fair are mostly big and authentic suppliers that selected and recommended by local government. So the big buyers can always find ideal suppliers from Canton fair. But if you are smaller buyers, I would suggest you choose smaller while rapid-developing companies instead of big suppliers. The big buyers like Wal-mart, Target etc are on their top priority, smaller buyers' interest will be sacrificed first if they don't have enough production capacity to fulfill all the orders at peak season. However, your orders are always taken care well by the smaller suppliers. The other reason I recommend smaller but quality suppliers from Canton fair is that they are fast responding to your questions and concerns, that is very important especially when your order is really complicated.

Other than Canton fair, the East China fair is a large scale trade fair in China that is only next to Canton fair. Also if you are geographically connected with China, for example, if you are buyer from Russia, you might be interested to attend Harbin fair which is close to Russia.

b. B2B website
I have worked in several trade companies, when I received an inquiry from foreign buyers, the first thing I do is go to alibaba.com to compile a list of suppliers and then compare price and narrow down the list. That fact shows how useful it is to use B2B website to find a good supplier.

There are many B2B website out there, like Alibaba, made-in-China, globalsources, tradekey etc. Globalsources set the highest threshold by charging for expensive membership fee, so the supplier quality are relatively higher than the other platform. Alibaba, made-in-china and tradekey are also good resources to find suppliers, especially Alibaba. Most company in Alibaba are real companies(except for counterfeited brand products sellers). But one thing I need to stress is that gold supplier and trustpass members in Alibaba don't necessarily mean they are real, Alibaba said they have verified those companies, but don't promise those companies are real. Check our article on "alibaba gold supplier scam", and then you will figure out why.

c. Search engine
Use search engine Google or Baidu to search China suppliers. Vary the the search term to put up a list of suppliers showing up in the search results. Besides, many suppliers launch pay per click advertising on Google and Baidu, the AD appears on the side of organic search results. PPC advertising is pretty new in China, companies pioneered to use this advertising method definitely worth you to have a look at.

d. Industry association
It is always a good method to search the industry association websites or buy industrial publication from those industry associations to search for reliable suppliers and buyers. We have written an article on Chinese industry association list, where you can find the industry association website related to your business. One thing I might add is that they are mostly very bureaucratic, do a DIY search on their website to find the information and resources useful, don't expect they will answer your email.

Very helpful!

Thanks for the suggestions!

[tkexplorer]

Good and educational for new comers in the industry.

can any one try to explain it in simple words

Really helpful and provides a great insight to the China sourcing industry.

For the trade fairs, www.cantonfairs.com and www.chinasourcingfairs.com are fairs that are not to be missed. It provides you a great opportunity to meet up with a large number of suppliers face to face and view the actual products etc.

Regarding the B2B websites, agree with you that www.globalsources.com have a better quality suppliers due to their pricey membership fees. And also, their strict verification system. They visit their suppliers at least 3 times to ensure that they are real companies with real people. I think this is great for us (buyers) as we know that we're only getting the best.

I think in the current economical climate, its very important to know that the suppliers we're sourcing from are reliable. Hope that helps!

[Netsoft]

Thanks for the fast read. It is a good read.