How to buy direct from China: Suppliers, costs, top tips

China is a popular choice for sourcing low-cost inventory for resale. The lower manufacturing costs can help companies increase their own profit margins.

Contact us to discuss your requirements of china tools wholesaler. Our experienced sales team can help you identify the options that best suit your needs.

Many sectors choose to buy direct from China. The leading product categories are electrical machinery, toys, and sports equipment.

&#; Did you know? In , China was the largest supplier of imported goods to the US - accounting for 18.8% of all imports. This was worth a total of $434.7 billion.¹ Total imports for May were $44 billion, compared to around $39 billion in May .²

Whatever products you&#;re considering, there are several things to be aware of when buying from China - from initial supplier contact up to finalizing payment. This guide will help you navigate the process.

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How to buy direct from China

When approached right, the Chinese market can offer high-quality products for great prices. Buying direct from the supplier can help build a stronger supplier relationship.

The process can seem complex and confusing when starting out. It doesn&#;t have to be this way, though. Companies have been successfully sourcing from China for decades. Taking the right actions can make the buying process easier and safer.

Find a supplier in China

The first step is to find the right supplier. There are many ways to do this. Searching online and looking at supplier platforms can be the best place to start.

You can often find customer reviews online that can give you an idea of whether the supplier is good and trustworthy.

You may also turn to other companies for supplier recommendations, if they are happy to share these with you. If a company highly recommends a supplier, it is a good indicator that you will also likely be satisfied with their services.

It&#;s a good idea to start by finding two or three potential suppliers. You can then compare them against each other before making a final decision.

Contact your chosen suppliers

Once you have shortlisted suppliers, you should contact them. This can be by initially, with subsequent video calls if you prefer. Due to the distances, suppliers are often used to handling the whole process remotely.

This initial contact with a potential supplier is important. Relationships and customer service can be vital. Remember that the best suppliers will become more than just a seller.

A good relationship will support changing business needs, and even expansion in product offering.

Request product samples

Before placing a firm order, it is sensible to request samples from potential suppliers. This allows you to test product fit and quality. It also lets you further evaluate the supplier and possible relationship.

Suppliers may offer to supply photographs and other details instead of samples. It is up to you, but in many cases, examining the real product is by far the best way to test quality.

Keep in mind the shipping time for receiving samples. Of course, this is a significant factor in future orders as well. You may have to pay for samples, or the supplier may offer them for free. Always confirm this before expecting any free samples.

Choose a supplier and specify your product needs

After dealing with two or three potentials and evaluating the company and product quality, you need to select your preferred supplier.

When making an order, you need to be very clear about what you want. Be specific. This may sound obvious - but clearly specify all details including modifications, sizes, and quantities. You also want to ensure this is fully documented in case of problems later.

Be sure to also let the other suppliers know that you won&#;t be choosing them. It&#;s always nice to keep a good relationship incase you do need to fall back on your second choice.

Negotiate prices and payment terms

Price is a major consideration when choosing a supplier and placing an order.

Keep in mind any minimum order quantities when placing an order. Suppliers may place limits to obtain certain prices. In general, the price per unit will decrease as you order more. Factoring this into ordering plans can be advantageous.

Make sure that the payment terms are clearly specified and documented. This includes price, quantities, delivery time, and payment timeframe. You may also have to make a partial payment (downpayment) before shipment.

Good documentation will be vital in the event of any problems or disputes later.

Arrange shipping from China

There are several options for shipping from China. This could be arranged by yourself, the supplier, or a third-party company.

Options vary depending on budget, types of goods, and desired shipping speed.

Shipping options include:

• Air cargo ensures the fastest transit times but at a higher cost. To have cargo shipped by air, you need to have an Air Waybill (AWB).
• Sea freight is slower (up to around 40 days) but more economical.
• Freight forwarding could be a simpler option. They may use air, sea, or a combination - and will have access to multiple networks. A freight forwarder will also handle paperwork and customs for you.

Pay any customs duties upon receipt of goods from China

Customs duties could be due on any item imported from China (or any other country). The United States Customs and Border Protection (CBP) enforces customs rules in the US.

For goods valued under $800, there is no customs duty. Above that, the duty payable will depend on the type of goods.³

The US uses the internationally recognized Harmonised Tariff Schedule or HTS code to calculate the exact rate due.

US customs will calculate any duty due for arriving goods. It is common to get the supplier to send a shipping invoice before the delivery of goods. You can then pay charges before the goods arrive at customs, which can speed up the import process.

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How do I find direct suppliers in China?

Finding the right supplier is essential. You want one that offers the best possible products; but also one where you are comfortable with the relationship.

Some of the best ways to find potential suppliers include:

Online marketplaces

There are many online marketplaces for the Chinese market - including Alibaba, DHGate and AliExpress.

Manufacturers will list details of themselves and their products. The platform then facilitates communication with potential suppliers. Alibaba can also offer a level of protection for orders through its Alibaba Trade Assurance program.

Trade shows

Trade shows have long been a leading way for companies to meet. Even with the rise of online marketplaces, trade shows still provide a useful face-to-face meeting opportunity.

Shows are held in China and overseas. The largest show is the Canton fair (also known as the China Import and Export Fair). This is held twice yearly in Guangzhou, China, and attracts over 24,000 suppliers.&#;

Word of mouth

Recommendations remain important, just as they do in other areas of business. Talking to other companies about the experience is a good idea. Trade shows can also provide opportunities for this.

Pros and cons of buying direct from China

Buying products from China has its advantages, but it&#;s not for everyone. The following are some of the main considerations for sourcing from China:

ProsCons

• Take advantage of lower labor and manufacturing costs in China for your products.
• Increase your profit margins.
• Going direct to suppliers reduces costs by cutting out any middle-man.
• Take advantage of a wide choice of suppliers and range of products.
• Work with established suppliers to customize or improve your products.
• Once relationships are in place, it is easier to scale production and supply.

• It can be harder to assess the quality of goods directly.
• Product standards can be different. This is especially important when considering US safety and quality standards.
• Communication can be a concern. There can be delays in this, and language may be an issue.
• Shipping can take time.
• It's harder to manage the supply chain with delays in procurement and transit time.

How to pay your supplier when buying direct from China

Suppliers often require payment in Chinese Yuan (CNY). Paying in local currency is the norm when you buy direct from China.

Even if you have the chance to negotiate payment in US Dollars, this may not be the best idea. It could harm the supplier relationship, and may incur delays or extra fees for either party.

A Wise Business account will help with making Chinese Yuan payments. You can hold, spend, and convert money in over 50 currencies, including Chinese Yuan. The Wise Business account gives you the flexibility to have account details for USD, Euro, GBP, and seven other major currencies.

Pay suppliers in China with Wise

Chinese Yuan invoice payments can be made with ease. Your funds are converted at the real mid-market rate, for a low and transparent fee.

All sources checked August 23, .

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Common Mistakes When Choosing Products

1. Always Going After the Fad

With perfect timing, there&#;s no doubt that you can rack up millions from the latest product fads. For instance, from to , the hot item, the fidget spinner, helped two of my customers earn big money. But as time passed, fidget spinners are less and less popular, which bewildered these two customers. Now they are faced with problems deciding what new products to sell.

In addition, if your products are seasonal, it means that you need to sell them quickly in the right season. Otherwise, when the season passes, you have to drastically lower prices to get sales and avoid long-term storage fees. But in fact, it is quite possible they won&#;t be all sold in time.

So, to develop a long-term business, we do not suggest this kind of speculative behavior. The timing of taking advantage of product fads is critical. Being too early or too late can make a huge difference. But for most of you, it can be difficult to identify the perfect timing. Therefore, focusing on products that would sustain a long-term business would be a wiser choice.

2. Never Take Your Eyes off Low-value Products

You may always be attracted to low-value products because you think the cost of purchasing is low. But they are often together with fierce competition, low added value, and thin margins.

For a low-value product, the potential to increase its value is little. For example, the selling price of a cheap bottle opener will not significantly increase even if you put it in fancy packaging.

Besides, low-value products made in China only seem cheap initially, because the international shipping cost has not yet been taken into account. Even though it is a low-value item, the shipping fee is still the same high. Once you subtract product cost and shipping cost from your sales, there won&#;t be much profit left for you.

One of my customers once sold disposable food containers on Amazon. It seemed like a good business because the product price from China is just $ 0.75/piece. But there were already too many sellers selling the same product on Amazon. As a result, many of the food containers are still lying in his warehouse until now. So, after doing a careful check, if there are already plenty of players on the field, please stop to think about whether this business is suitable for you. 

3. Think That Highly Consumed Products Are Good Products

When talking about a good product imported from China, market demand is one of the main factors to be considered. Highly consumed products meet the criteria without a doubt.

Our customers once inquired about the A4 printing paper. But when they started selling some, they found out that it was not as easy to sell as expected.

Selling highly consumed products is utterly a cut-throat competition. Thousands of players are sharing the cake. The profit is totally transparent. Moreover, they have been in this segment for a long time and already established their own stable sales channels. 

4. Choose Large-sized Products, Thereby Paying High Shipping Costs

For large products, like dressing mirrors, shipping will cost even more than the product itself. Besides, the probability of the product breaking must be considered. If the product is sold on Amazon, there will be extra charges for storage and handling. The same goes if you plan to store it in your own warehouse.

 

For someone who is just starting out, it&#;s never good to choose products with less value, but higher shipping costs and taking up larger storage space.