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Tips for Sourcing From China for Sale Online

Updated on December 31, 2019
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With several years in the Halloween industry, Drew is on the beat with the latest developments in the eCommerce world.

China's Trade in the USA

If you've ever handled an item and noted where it was made, most often than not, the country name is China. China is one of the most popular countries overseas to source products from and a lot of companies do. Whether it is private label companies or people with a stake in the market, Chinese manufacturers offer competitive pricing to American business. While sourcing from China is a cheaper route to follow, there is a lot of time put in by a business to ensure that they are vetting the products that they are receiving before offering it up for sale. If you are an independent seller, you'll often need to research products to source before diving in and making a purchase. There is also an ongoing trade war between the United States and China that may see business's profits shrivel.

Identify Popular Products

As with any sourcing endeavor, you must be sure that the products you are enlisting into your seller catalog are strong performers in the marketplace. Market demand and competitive research will form the basis of what products you should consider importing. If there is a popular movie or show that is coming or has been released, consider sourcing products relevant to the content. You are also able to reference an Amazon Best Sellers list to view which products are performing well and discover trends that may not be clear from an individual product view. When searching for products to source, consider the following:

  • Is there demand for the product?
  • Does the product solve a consumer problem?
  • Does this product fill a void in your product catalog?
  • Will the product be difficult to manufacturer?

The Right Supplier For You

When Amazon closed its doors on its Chinese marketplace in July 2019, Chinese manufacturers that sold on Amazon switched from direct sellers to exporters. If you are a first time individual seller that wants to dip their toes in online selling, I'd recommend sourcing from alibaba.com or aliexpress.com. They have an extensive reach into the network of overseas manufacturers and their gold suppliers have been vetted and maintains your security. Alibaba has different levels of verification for each supplier, which show in the form of badges on product listings and company pages. Avoid resellers because that can make the buying process slow and murky. Do not attempt to sell items you would expect to be licensed, Like Marvel's Avengers or Star Wars products. Source generic products that do not have a license affiliated with it, otherwise it is considered counterfeit. Over time, you may find yourself communicating with a manufacturer directly. In order to build a healthy relationship with your supplier, you may need to go above and beyond your comfort zone. To begin to establish trust, you may start via email and phone. The next steps if your continue to work with your supplier would be to visit in person or extend your relationship past formal business meetings.

Terms Of Trade

You'll more often than not want to choose the cource with the lowest cost of good sold (COGS). Negotiations with your suppliers can, but not always, result in a lower product cost. Ask about a rate card discount. Often times, suppliers keep a price list that offers a flat discount across their product line or for a certain volume purchased. Often times, if you buy in higher volumes, the supplier will give you a discount on the price per unit or offer you a rebate after the sale. Keep in mind: If a supplier does not offer you these incentives now, if you continue to do business with them the following year, make a discount request again.

Defective Products And Allowances

It is within the realm of possibility that some units you purchase are going to be defective whether it comes from the supplier or during shipping. The percentage that may come defective in an order can range from 0% to 4% and you are the one responsible to find a solution. You may be savvy enough to fix the issue yourself, pay someone to fix it for you, discard the product, or request a refund for the defective units from the supplier. The last case of requesting a refund from the supplier for the units defective should be made immediately upon receiving the items. You may be required to send the products back to your supplier at the cost of shipping. You must weigh the negative costs to decide what the proper solution would be for your business.

If a supplier offers free shipping, they are more than likely covering their shipping costs within the product's price. You may negotiate price, but you also risk the supplier providing poorer product quality than usual by the supplier trying to offset that lost revenue.

Samples And Packaging

If you are weary about jumping in with a supplier from China, you can request samples be sent to you. You may need to pay for the product and shipping charges for the item, but it is a good bet to take before ordering multiples of the product. Compare the sample product to the image and description the supplier offers. If you are extremely cautious, use a different name and email to request another sample (on a different day) to compare units from different batches as well. Receiving samples will ensure you can test a product before you make your purchase.

After you receive the products you wish to sell, you should test them to ensure the quality still meets your standards. Even though the manufacturer in China says that have a quality assurance team, you should still double check the products you ordered on your own terms.

Some marketplaces require product packaging to be present as a sign of the product being sold is "new". Amazon for example, requires in some categories specific regulations on what needs to be included on product packaging. You can work with your supplier and offer designs as to what you want your product packaging to look like.

Trade War

The ongoing trade war with China and the United States may play a factor into your import dues.In September of 2019, President Donald Trump imposed tarrifs on 112 billion dollars worth of goods, even though hundreds of United States based companies requested exemptions and with the holiday season approaching. The general tariff rate is 15% for most categories. You may need to factor this rate into your COGS.

With roughly 7,000 miles between the United States and China and a possible language barrier, sourcing products from China to sell in the United States can be a long, lengthy, and expensive process. In order to avoid any pitfalls, you need to be sure to take your time and research the products and suppliers thoroughly before making the leap and spending your money in order to receive a good return on your investment.

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