You have a great idea to start a promising business, or you know how to make your product really stand out, now you have to think about how to source the ideal products.
There are a lot of places around the world to source from, however, there is no doubt that China is the most popular destination due to the wide selection of manufacturers, the low cost of production, and the superior logistics in the country.
Here are 6 things you need to consider before sourcing from China.
Create an RFQ form
RFQ is an abbreviation for “Request For Quotation”. Typically, an RFQ involves the product name, product description, materials, dimensions, target price per item, and other relevant information.
Oftentimes, the RFQ may be different for each supplier. So, it’s best to create your own RFQ form which allows you to provide enough details about your product even including images. In this way, there will be fewer chances for misunderstanding your requirements and avoiding potential pitfalls during mass production.
Confirm the MOQ
MOQ is an acronym for “Minimum Order Quantity”. The MOQ is a number that suppliers set as the least number of units acceptable for them to accept an order.
One thing to keep in mind is that the MOQ may not be accurate most of the time. There are two approaches regarding the MOQ. One is targeting the lowest price and the other focuses on mere quantity.
For example, if the supplier claims $5 per unit with an MOQ of 100, it means you can get items as low as $5 or as low as 100 units, but not necessarily at the same time. Keep in mind what is more important to you, getting the lowest price possible or being able to order the lowest quantity possible.
In China, most of the time both the quantity or the price can be negotiated, so use the MOQ as a reference number but not as a deterrent for placing an order with a supplier.
Find the product
Even if you can find a lot of suppliers that say that can make your product, there is a possibility that you cannot find the right manufacturer easily.
The reason is your product may not be popular in the market so there might be fewer suppliers that offer the exact products you need.
The most common route for finding new suppliers is searching on Alibaba, Made in China, or similar platforms. However, Alibaba and 1688 are merely platforms to connect you with suppliers to manufacture the products rather than for finding products that fit your list of requirements right away.
For example, you may want to make some wooden iPhone cases but there may not be any similar options online from phone case manufacturers, so you may need to reach out to some wood product manufacturers to see if they can get the item done.
Consider the fees
If you receive quotations from different suppliers, you should do a deep check on all related fees. Some suppliers intentionally “forget” to add other fees when providing the initial quotes, trying to impress you with a very low price.
So, spend time analyzing all related fees, and make sure to double confirm with your manufacturer that all of these fees have been accounted for when placing the order.
Otherwise, you will get caught off guard by extra fees like storage, packaging, prepping, etc.
Get some samples
To avoid the risk of faulty products and losing time and money, you need to ask for samples before mass production. It’s advised to order two to five samples to check the quality and other product specifications.
You may also need to consider again the packaging based on the samples especially when you sell on an e-commerce platform such as Amazon.
The size of the packaging will affect storage and shipping fees, higher fees than the ones you initially accounted for, can heavily impact your profit margins.
Additionally, having samples from multiple suppliers allows you to compare quality, finish, and make an educated decision before placing a mass production order.
Utilize product inspection services
Just because you have the perfect samples and a good relationship with suppliers does not mean there is a 100% guarantee that your order will be flawless.
Of course, you do not want to pay for sub-par or low-quality goods, so you need to get a pre-shipment inspection. Utilizing a third-party product quality control service may help you check the product before shipment and request to rework.
Pre-shipment inspections are often undertaken before paying the balance for your order, so it will be in the suppliers’ interest to solve any issues that can arise as they are interested on receiving the payment for the balance and keeping you as a long-term customer.
Sourcing products from China may seem daunting especially for business beginners. You can hire a third-party sourcing agent to find the best supplier and negotiate on price and terms for you.
