Buy directly from China at factory prices: why you should do it
Online retailers and other small businesses can gain a competitive edge by purchasing goods directly from manufacturers in China. Conversely, if you manufacture your own goods, importing packaging, components, or raw materials from China could save you time and money.
Not too long ago, only large corporations could afford to maintain a sales office from which they could import and source goods from abroad. However, with the advent of modern technology, everything is now accessible online, eliminating the need for laborious and costly business trips to China to visit Chinese factories and contact suppliers.
The fast delivery and low prices of online shopping are great, but there is always the risk of unpleasant surprises. For this reason, we’ve compiled some of our best tips for making direct purchases from China into a concise guide.
Buy directly from China: useful tips
The first thing you need to know if you’re going to import Chinese goods is that quantity is crucial. Whether you need 50, 1000, or 10,000 units, and what kind of shipping you prefer, will affect the price quote you receive from the suppliers. Despite the fact that air transport can be used for limited product shipments, larger orders cannot be fulfilled by air.
In most cases, stocking up on a product is the surest way to save money. The system is straightforward and is based on the market logics that arise between a Chinese supplier and their manufacturers. There is a minimum order quantity (MOQ) that both manufacturers and suppliers must adhere to in order to accept your orders for production of the goods.
Those who choose to import from China should be aware that there is a minimum order quantity (MOQ) below which wholesalers will not sell the requested goods, and that if the MOQ is met or exceeded, the wholesaler will accept the order because he will be able to make a profit, albeit a small one (consider that Chinese suppliers have a very small profit margin, which ranges from 2 to 4 percent!).
How to approach Chinese suppliers
Remember that turnaround and delivery times are also crucial. In fact, if you decide to make a purchase from China, you should remember to plan ahead, as it may take several months for you to receive your goods. The typical time frame for a freight shipment is 45 days.
That’s why it’s always preferable to provide detailed instructions for the goods you need, including the quantities and the deadline for delivery.
When first starting a relationship, many companies only provide the unit price of the goods and no total or time frames, for example. This approach may seem reasonable at first, but it will likely backfire and cause you and your supplier unnecessary delays and frustration.
Just a few things to keep in mind:
Even if the supplier is dedicated, they will not be able to provide you with a unit price because the price varies so greatly with quantity;
If you keep changing your mind after receiving a quote, you risk alienating the supplier because of the extra work you’ll be causing them.
Because of the sheer volume of requests they get every day, Chinese manufacturers aren’t worried about losing you as a customer if you only need a small quantity of their wares.
Because of this, it is highly recommended that you plan ahead and decide what you want to buy and when you need it. You can then send the supplier complete and accurate information in this format. Keep in mind that a quote is completely free and has no legal weight. Having open lines of communication with your suppliers will help shorten their turnaround times, make you a more desirable customer, and reduce the likelihood of any miscommunication arising from your frequent requests for changes.
How to find the right supplier
The best way to find potential vendors is another issue that needs fixing. You can find them on websites like Alibaba, but how do you choose the best one out of the thousands of suppliers offering the same product?
Create a written request for pricing from multiple vendors, detailing the products you need and when you need them.
Inquire as to whether or not such items have previously been offered for sale in either the European Union or the United States.
Make a formal request for the necessary EU sales certifications.
Inquire if the supplier can take care of shipping and what options were considered for the shipping method.
Find out how long this provider has been in business by reading reviews about him (the longer his activity is, the safer your investment you will be).
Customs and Duties
If you want to import something, it’s also a good idea to research the customs fees involved.
Customs duties fluctuate and can have a significant impact on the final cost of imported goods;
Customs duties are the same across the EU and cannot be avoided, so they must be factored into the final price of the product. VAT varies from country to country.
Buy directly from China without a single problem
If you’ve done any kind of investigation on the internet, you’ve probably noticed that websites like Alibaba have very high minimum order quantities.
However, high MOQs can be problematic for a small business. In fact, it is hard for small businesses that don’t have a lot of money or storage space to import a lot of goods from China.