Sourcing in China - The Basics

One of the best ways to find reliable trading/sourcing companies in China is to visit trade fairs, which are held all around the year. Millions people visit these fairs annually. You would be able to come across a large number of reputed trading/sourcing companies in these trade fairs. Thousands of manufacturers and traders participate in these events. A large number of trading/sourcing companies in China also are present. Attending a number of these events during your visit to China would help to get in touch with a number of good trading/sourcing companies in the country.

The department / chamber of commerce in most countries would have a directory of reliable trading/sourcing companies in China listed in their database. For instance, the Department of Commerce in the US publishes a guide every year known as the “Contact China” guide. This publication is extremely valuable for companies hoping to have business ties with China since the guide contains a list of trading/sourcing companies in China. This is an invaluable resource for anyone considering buying products from China, or setting up operations there. The website of the US Department of Commerce also has a number of resources to help you get started.

You can also employ business service providers to help you locate good trading/sourcing companies for you in China. Most of these companies would have a huge number of business contacts throughout China. You can effectively use their client base in China in order to spot reliable trading/sourcing companies to source products from. These business service providers would also help your company to draft sound legal contracts with these trading/sourcing companies, which is very important for your business interests. Basing your business on a strong legal footing is extremely important for doing business with your trading/sourcing companies in China.

The web is another powerful medium through which you can find good trading/sourcing companies in China. Of course, the normal precautions you need to take while gleaning through information online still applies here. Regardless, the immensity of the web makes it a limitless source for finding good trading/sourcing companies that you can source from in China. You however need to carefully go through the websites of these trading/sourcing companies in China in order to check their credentials. A number of genuine trading/sourcing companies in China have a comprehensive amount of information on their websites, which would help you assess their credibility quite easily.

China is extremely different in a lot of ways than other countries in the world. The language, the customs, the tradition and the eastern way of doing things is a lot different from what most westerners are used to. The socio-political climate of China is also very different which makes it difficult to easily source in China. In case this is not your first time doing business in China, then you might try to source yourself in China. But on the other hand, if this is your first venture in China, then using a trading/sourcing company would be essential.

It is always wise to use a trading/sourcing company when starting new in China. If you try to source in China by yourself, you might face a lot of difficulty. A trading/sourcing company would help you avoid most of these problems. Since China is not very transparent, the trading/sourcing company would help to get things done quickly in tricky situations. The trading/sourcing company would also help you source from reputed firms in China. To source a good trading/sourcing company, you might need to search around in China. But once you locate a good trading/sourcing company in China, they would help you to source your products from reputed firms in China.

It is never advisable to source by yourself in China because you may not know the various intricacies of doing business there. But a good trading/sourcing company would know much of the situation there and help you source products from reputed firms. A reputed trading/sourcing company would have a lot of business connections in China. You can effectively use their contacts to source your products. In fact most new companies find it difficult to find good contacts to source from in China. A trading/sourcing company would be the best solution for their problem.

Locating good companies in China to source from is just the beginning. You then need to draft an effective legal contract with them that is profitable for you. Here again, a reputed trading/sourcing company would help you with all the legalities involved. Since the trading/sourcing company would know much of the technicalities of such a business partnership, they would help you source from the best companies in China. The trading/sourcing company would also go a long way in helping you avoid many of the loopholes that you might otherwise encounter if you try to source products by yourself in China.

One of the strongest business aspects that make China a competitive business destination is its low cost of products coupled with China’s technical expertise in the manufacturing industry. Virtually any product can be manufactured in China as per your specification, and almost always at a much cheaper cost than what would be possible in the west. Chinese manufacturers have the advantage of low labor costs. This makes it easier for Chinese manufacturers to price their products at a very low price. So products made by Chinese manufacturers have very competitive prices and are in high demand throughout the world.

Chinese manufacturers are also highly skilled in technology, which again makes them highly competitive. While other developing countries are trying hard to gain market share, Chinese manufacturers are able to dominate the industry by their competitive prices. The technology used by Chinese manufacturers also helps them to minimize on production costs, which makes their prices even more competitive. Countries from around the world are attracted to product made by Chinese manufacturers for their high quality and competitive prices.

What sometimes what makes importing from Chinese manufacturers not very competitive is the cost of importing the products. The huge amount of expense in shipping and storing the products made by Chinese manufacturers makes it lose its competitive edge in the market. When all the overheads are piled up on the price of these products made by Chinese manufacturers, the prices are no longer competitive. This is one of the reasons certain kinds of products are not imported from Chinese manufacturers even though the prices might still be very competitive in the Chinese market. It is only when these products made by Chinese manufacturers land on western shores that the prices lose their competitive edge.

This is not to mean that products from Chinese manufacturers are not sold in foreign markets. Our own experience tells otherwise. We see so many products Chinese manufacturers being sold in our own countries and the prices are still competitive. It is just that certain products made by Chinese manufacturers become very expensive for importing and hence lose their competitive edge in pricing. There are, however, a number of other products made by Chinese manufacturers that are still very competitive in price. Such products from Chinese manufacturers are still being imported in large numbers and sold at competitive prices in supermarkets and chain retail stores in various countries around the world.

The first and foremost thing to understand about China is that things over there are worlds apart from what people are normally used to in the west. We cannot expect the same amount of transparency and support from authorities in China that one is used to in their own country. This makes self sourcing at little bit difficult for new entrepreneurs. If you have been running a business in China for a considerable period of time, then you might already know many places for sourcing your products. But if you are new to China, then sourcing by yourself would be a difficult option.

One of the things that new businesses start ups are encouraged to do is to always get advice from reputed and established business service providers in China. They are warned not to venture out on their own for sourcing products or business partners in China. An established business service provider can help in sourcing good companies for you based on their years of experience in business in China. When you start a new business in China, you may not have the required experience or the contact necessary to do the sourcing all by yourself.

Starting a business in China requires a lot of legal paper work that is best left to the experts. Especially when you are sourcing products through other Chinese businesses, you need to know the exact strategies involved in structuring your business correctly. The sourcing needs to be done right so that you do not run into problems in the future. If you make a mistake in sourcing, then it would take a lot of time and effort to set right the problem in China. Therefore, hire the services of a business service provider in China to do the sourcing for you.

When you do your sourcing through a business service provider, you might be able to establish contacts with so many reputed companies in China that you might not be able to do if you are sourcing on your own. A foreign company in China should always do their sourcing through reputed service providers so as to establish a strong and stable business presence. All the possible loop holes of sourcing by oneself can also be avoided when sourcing through a reputed business service provider in China. This kind of sourcing would help you concentrate better on growing your business in China rather than rectifying the mistakes you had done.

You have to be careful about any kind of Chinese scam when planning to start a business in China. What do we mean by a Chinese scam? Well, there are a number of dubious business offers that we find being pushed on the Internet. While not all of them originate from China, a lot of them however do. So we would refer to any kind of too-good-to-be true offer that originates from China, obviously, as a Chinese scam. Sometimes an offer might seem to look like a Chinese scam but in reality could be an extremely profitable deal. Just because is sounds too good, we need not label it as a Chinese scam.

Here are some of the ways in which you can detect a Chinese scam. First visit the website mentioned in the offer to study a little more about the business. Since English is not their first language, most of them struggle to write grammatically correct sentences. You can identify a Chinese scam when they have not taken the time or the effort to coin a domain name that is grammatically right. A Chinese scam would most often have an incorrectly spelt name or one that do not make proper sense. When you see such a site advertising a very attractive offer, it is most probably a Chinese scam. Do yourself a favor and just close the browser. This is one of the most straightforward ways to detect a Chinese scam.

Next, can need to check the “Whois” details of the website. Every domain name has a corresponding “Whois” page which shows you who registered the domain, when it was registered, when it will expire and so on. You can use this information to detect a Chinese scam. The “Whois” page almost always would contain the contact details of the registrant of the website. If you suspect the website is a Chinese scam, you can go ahead and verify using the contact information listed. If it is a Chinese scam, then the company would not exist in the address mentioned on the “Whois” page. You can also check the date of registration of the domain name and the number of years the website claims that the company has been in operation to determine whether it is a Chinese scam. That is another powerful way to detect a Chinese scam.

Once you are on the site, check the quality of the site itself to see whether it is a Chinese scam. A professional company would at least have a reasonably good and professional looking website. A Chinese scam on the other hand would focus more on extracting your money right away. If the sites talks only about how you can pay and not much about the product or service itself, then you might be looking at a Chinese scam. A Chinese scam website is only after your money. Moreover the Chinese scam is not very intent on being discreet. It aims its schemes on the gullible and innocent. If you are shrewd enough, you can protect yourself from a Chinese scam.

If also need to be aware of the fact that a website which collects credit card information always uses SSL for transactions. You can tell by looking at the URL which always starts with ‘https://’ instead of the standard ‘http://’. If it does not use SSL while collecting credit card information, then it is definitely a Chinese scam.

It is not always easy for western importers to locate the best factory in China to source their supplies from. It takes a lot of time and effort to familiarize yourself with the factory in China and the way that things are done in the market there. Nevertheless, if you spend enough time in the factory in China, then you will slowly come to know the names of some of the reputed companies that have a good quality factory in China that makes a lot of high quality products which you can source from.

The reason why you might need to search far and wide for a factory in China is that there is very little done in the form of formal registration of businesses and the kind of regulations that we are used to in the west. So what happens is that some companies that are very small and do not have proper registration also are very good sources of high quality products. They may not have a very good corporate image, but the quality of their goods might be very good, which is exactly what we are looking for. Unless we search well enough for a factory in China, we might totally miss such opportunities. The more time we spend to search for a factory in China and the harder we look, the more chances we have of locating a good factory in China from which we can source good quality products.

We can also go through trade journals and attend trade shows to get a taste of the kind of products that are available in the market. Sometimes it might be a little difficult to determine the exact factory in China that manufactured these products that you see in the trade shows if the company that showcases the products is different from the factory in China that manufactured the products. So you might have to dig a little deeper to actually determine the name of the factory in China which actually made the products.

A number of websites also feature a long list of companies that manufacture a wide array of high quality products made by a factory in China. Browsing through many of the sites that specifically deal with the subject of sourcing from the Chinese market can help you locate a good factory in China that manufactures the exact product that you are planning to source from China. You local representative might also be help you locate good factory in China that manufacture high quality products available at an affordable price.

There are a number of ways to find the best factories in China for premiums and gifts products. The first and foremost step is to determine the variety and range of products that you want to deal in. Some people do not have a clear picture of what they want. So this is the first step. Once you know exactly what want, then it is a matter of making a systematic search for finding the sources from which you can procure the products.

There are a number of ways in which you can locate the best factories that manufacture premiums and gifts products. It depends on the approach you would like to take. If you have the time, budget and the inclination, you can personally visit China for a first hand look at the opportunities that is available to you. You can attend various trade shows that take place on a regular basis in different parts of China. These events are wonderful opportunities for you to catch a glimpse of the kinds of products that you are interested in. You would also come to know of the companies that manufacture the products. You can also find out whether you can procure the items directly from the factory or you need to go through a distributor to buy the items.

On the other hand, if you are planning to outsource the manufacture of your premiums and gifts products to factories in China, you can use the same strategy outlined above to locate good factories in China. You can look for products similar to the ones you would like to manufacture and find the factories that manufactured those products. Then you can get in touch with those factories directly and try to work out a deal. You can also hire the services of agents who would be able to forge a contract between your company and the manufacturing unit that you would like to outsource your work to. Being in person would immensely help you in quickly establishing your business in China.

You can also locate good factories in China by browsing through the numerous online directories on the web. A number of directories are devoted to business listings where you can find factories in China that make premiums and gifts products. You can also browse through trade journals to locate many of them. The U.S. Department of Commerce also has many resources that would help you locate the kind of services that you are looking for in China.

There are a number of ways in which you could source materials and goods in China. There is not just one way to source in China. There are numerous ways to source in China. The first task to source in China is to familiarize yourself well with the way things are done in China. Since the country has a culture that is far different from anything you have experienced in the west, you need to first understand the differences and be familiar with the way things are done in the east. To source in China, you also have to become knowledgeable on the various aspects that are unique to the Chinese culture and their way of doing business. Once you acquaint yourself with their modus operandi to source in China, then it becomes quite easy to negotiate a deal and source in China for all your business needs.

One of the most important things to start negotiations in China when you source in China is to have a local person represent you in all business dealings. Since you may not be able to always be present to source in China for your products, it is vital to have your representative who can oversee the business dealings on your behalf. It would be very ideal if the person is a Chinese, but even a non-Chinese is better than having no one there to source in China. So you need to first of all build a relationship with someone in the local setting who is trustworthy enough to source in China.

With insider information to source in China, it would be easy for you to source the right kind of suppliers for the type of products that wish to source in China. People who have been in China for a considerable period of time would know about the most reputed suppliers to source products in China for your specific niche. They could provide the best leads to locate suppliers that you can source your materials from in China.

You also need to understand that the Chinese place a lot of emphasis on a relationship more than the business itself. While westerners focus more on the business and look at the relationship as secondary, the Chinese first try to build the relationship and then base their entire business on the strength of that relationship. If the business relationship is not very strong, then they would not be able to build enough trust to do good business. Therefore it is vital to focus on building rapport with your suppliers in China that you source your material from in order to have a smooth business experience.

In any business, the credibility of the company that you trade with is of extreme importance to ensure a smooth business relationship. It is risky to enter into a business contract with a company whose background you are not familiar with. When it comes to dealing with companies overseas, it becomes even more risky to trade with unknown companies. You need to do everything under your control to determine the credentials of the company that you wish to do business with. When you are planning on starting a business operation in China, you need to know as much as possible about the Chinese company that you would be dealing with in your business.

In order to check the background of the Chinese company you are interested in, you can use the U.S. Commercial Service has an International Company Profile service which does a preliminary background check for you on the Chinese company you are interested in. If you wish to have your company referred to Chinese service providers, you can request the U.S. Commercial Service to do so. The U.S. Commercial Service has setup the ICP or International Company Profile for the sole purpose of enabling US companies to have confidence in the business partnerships they are planning to enter into with any Chinese company.

When you want a particular Chinese company to act as marketer for your services or products, the ICP can aid you in evaluating that Chinese company’s potential. Within a matter of twenty days, the ICP would come up with a comprehensive report about the Chinese company you have shown interest in. The ICP is made available with the help of Sinotrust which is a reputed investigation and risk analysis firm. Sinotrust also collaborates with Globis in gathering data for the ICP.

These firms basically collect information that provides answers to a standard questionnaire. The U.S. Commercial Service also provides any additional information it has at its disposal about the Chinese company in question. It also provides valuable information on the diligence procedures you need to adopt while doing business overseas.

Some of the information provided in the ICP includes financial data, market outlook, sales volume, bank and trade references, product lines, and principal officers and managers of the company. With such valuable information at one’s disposal, it becomes much more safe for companies in the west to enter into a business relationship with any Chinese company.