The key to successfully importing goods from China is to get up to speed how to select products and suppliers and manage your own risk, even if you import through an agent. Finding the right supplier is also not easy when 30,000 suppliers are listed for your product. You can choose to work direct with a supplier found on alibaba.com, or pay a sourcing company to do the sourcing for you.
Here are the 5 keys to success:
1. Product Knowledge is Essential
When you contract a sourcing company or agent to import from China for you, they really should understand your industry and products to find relevant suppliers. If they are not industry experts, they could choose a less competent supplier.
Don’t rely on the sourcing company or supplier to cover your product knowledge gaps.
2. Manage Your Own Risk
Unless you buy direct from the agent in Australia (not China), the contract is still between you and the supplier. The risks of quality, supply and shipping are still your responsibility. If there is an issue, don’t expect the sourcing company to work at their expense to solve the problem. If you want to reduce your risks when importing, you need to directly address them yourself – just make sure you get expert advice about how best to identify and plan your importing risks.
If you are working with a sourcing company, make sure they are registered company in your country (not Hong Kong, UK, US or China) – the cost is higher and your ability to enforce an offshore contract is significantly less.
3. Watch the Ongoing Costs of China Imports
Sourcing companies often offer zero or low up-front cost to get started. But once your import business is reliant on that product, the ongoing costs of 5-10% of invoice per order plus extras, become significant. While it would be unlikely (and unethical) for the sourcing company to inflate prices and their commission, you need to know exactly what the base costs of your product is from the Chinese manufacturer, so you can better negotiate future price increases.
Importantly, many agents rely are paid through a percentage of the order. For this reason, many sourcing companies will not disclose their supplier to protect their ongoing commissions.
4. Know your Supplier in China – A Relationship Based Culture
The best ongoing risk management strategy is to know your supplier in person. The disadvantage with using a sourcing company is that you are not developing a direct business relationship with your supplier, your sourcing company is. Establishing trust and rapport with a supplier can benefit both parties when doing business together. Go to China, India, Vietnam – or wherever you are sourcing from, build the personal relationship and supply issues can be better resolved with that relationship in place.
Email is a very poor substitute for one on one communication when liaising with Chinese factories. Since sourcing companies often do not disclose their supplier, it may be impossible to do that when you use their service.
5. Learn to Use a B2B Manufacturer’s Directory Safely
A B2B marketplace like alibaba.com is the lowest cost way to find the best suited suppliers for your imported goods. You will be able to find and assess suppliers online from China without paying a sourcing company or agent. We are often asked, ‘Is Alibaba safe to buy from?’, the answer is yes, provided you understand that:
1. The importer (you) is responsible for complying with import licences, regulations and standards
2. It is your responsibility to do due diligence of the supplier before you make a commercial order. This means not working exclusively form information posted online.
China Imports – Summary of Keys to Success
The days of paying a sourcing company or agent to find and assess manufacturers in Asia are long gone. You can easily import online from China to develop new product ranges with your own brand. Just know your risks and responsibilities and get expert advice from a qualfied training provider like My Import Label before committing to an order.
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by Craig Ford How to Import Online from China – What you Must Know
My Import Label How to Import Online from China