A manufacturer produces finished products from scratch. Manufacturers can be suppliers and sell their products to distributors, retailers, wholesalers, customers, and other manufacturers aiming to create intricate items. The supplier [can be a manufacturer], distributor, or wholesaler are the ones who buy existing products and brands to stock up their inventory. A dropshipping company fulfils the product orders of existing brands. Therefore, if you plan to launch a business then first decide the kind of supplier you need, to do further research. Do you need a manufacturer, supplier, distributor, wholesaler, or drop-shipper? If you prefer a supplier, then make sure he has sufficient inventory to offer. A supplier encompasses manufacturers, distributors, and wholesalers.
You also need to consider whether to source domestically or from abroad. It is sensible to secure two suppliers – one nationally and one from abroad. If the overseas order is late or incorrect then you can approach the domestic supplier. National suppliers are expensive but it’s great to have a product in stock rather than having customers wait for the international shipment to arrive. It can cause customer dissatisfaction and even loss.
Sourcing products from Asian countries like India, China, and Taiwan is preferred because of the cost savings. However, there is a lot more to consider than upfront investment and per product cost. Thus both national and international sourcing has their pros and cons.
Why source products or goods from China?
Currently, Western entrepreneurs take help from China sourcing services for buying finished goods easily without the need to visit this country. They are present on the ground and help to connect buyers and suppliers, handle the communications as well as quality inspections on their client’s behalf. Large platforms like Made in China, Alibaba, and Global Source have helped to connect worldwide suppliers and buyers. Advanced technology has facilitated buyers to the Chinese suppliers securely, reliably, and rapidly.
What are the reasons to source from China?
This leads to cost savings
China’s manufacturing landscape is competitive. The manufacturing cost is low when compared to developed countries like the US, Europe, and the UK. The product costs include raw material costs, labour costs, and overheads like maintenance and electricity, which are lower than the western countries. Besides, Chinese factories are capable of producing massively and handling huge orders, which in turn reduces the per product prices. All these features reveal that sourcing product manufacturing in China is inexpensive. Thus your affordability and profits increase. The profits can be reinvested to help your brand grow.
There was a time when cheap Chinese products were regarded to be of poor quality but today the manufacturers make products equivalent to the western quality standards. Even if the products are inexpensive there is no compromise on quality. There are some shoddy manufacturers in the market, so you need to be cautious while evaluating the suppliers to ensure that the chosen one is reliable.
The wise thing is to find a reputable sourcing agent in China who can communicate with producers on your behalf, so you stay in control of the quality.
Factories in China make a vast range of products ranging from medical devices to electronics to gym equipment to aircraft parts to automobile components.
How to find a reliable manufacturer in China?
Finding a reliable manufacturer is essential for your success. The manufacturer will control your product’s quality, packaging, costs, and shipping. Look on Google, directories, or platforms like Alibaba to search for suppliers in China. You can even get good leads from your professional networks in the form of referrals. Search for products using NAICS codes because suppliers or manufacturers list their products using this code. For deep research on a few possibilities check BBB for complaints or even browse the internet for reviews associated with the potential manufacturing company.
Outreach & gather information
After you narrow the manufacturer’s list, it is time to gain answers to a few questions?
- Does the manufacturer have the skills and resources to accommodate custom orders?
- What is their lead time? You don’t desire to go out-of-stock and leave customers waiting for months until the orders arrive.
- What is the shipping cost? It is a huge business expense and gaining familiarity helps to determine your bottom-line impact.
- What are their MOQs? Get to know the minimum order quantities needed because it is a highly negotiable point.
- What’s the per-unit cost? When you negotiate MOQs, you will also negotiate per unit cost. Larger order means lower per-unit cost.
- Are there any setup fees? Some manufacturers charge fees to buy equipment needed to fulfil your orders.
- Can they offer exclusiveness? If you are buying a tool for your product manufacturing, then ensure they will not use it to make products for other customers. You can ask for total, market, territorial exclusivity.
- What is their defect policy? Check who will be responsible for the cost of defect or incorrect goods including its duties & shipping.
After you finalize the supplier, you will need more verification. Check their licenses and other documents like factory registration, account audits, and tax documents. Check whether the company’s bank account is the same as the company name.
Discuss payment terms
Some suppliers ask new customers to pay upfront in full. A good manufacturer will keenly negotiate payment terms. Before shipping, they will not ask for full upfront. You can negotiate 50% upfront and 50% after receiving the shipment. It holds both responsible for order and is a win-win situation for everyone involved.
Communicate your designs directly. Some manufacturers offer 3D modelling and prototyping, which is expensive but communicating via instructions, sketching, and reference images also help.
Before you place a bulk order, get trial samples. Check the samples for quality and if you are satisfied place the bulk order and have the production started. After the sample is approved you can keep some as control samples. These are a kind of forensic sample that can be used to assure quality consistency of your full order.
You can take help from a reliable China sourcing agent. They will take care of the entire process right from identifying reliable suppliers, handling quotes, evaluating them, finalizing a supplier, checking the sample, product supervision, and even pre-shipment quality checks.