Basic Guidelines on China Product Sourcing

Posted on Apr 14, 2015 | 0 comments | Connect with Nancy Smith on Google

Basic Guidelines on China Product Sourcing

China has indeed come a long way since it first allowed foreign citizens to visit and open business opportunities to everyone. Its major cities are now places where hotels and office buildings abound. It is one of the world’s busiest markets from where many Western businesses have chosen to source their products.

Hidden Costs and Risks of China Product Sourcing
Whenever you source products from an offshore location, there will always be some hidden costs and risks. You need to take all these into account to ensure the success of your product sourcing venture.

Cost – Product sourcing in China offers huge savings because of the low cost of labor in the country. However, you need to consider the fact that the distance could mean an increase in freight cost and the risk of delays. You would probably also have to take care of import taxes. Be sure to include all these in the equation when you’re calculating whether sourcing goods from China is the best course of action or not.

price-for-product-sourcing-in-china-img

Many businesses source products from China to cut costs, which makes it important to consider all the costs involved to make sure it really is the right business solution for you.

Communication – Aside from the distance, the different time zones and language also contribute to the difficulty in communicating with a Chinese supplier. These factors also stretch the time required to conduct business, considering that if you needed a face-to-face discussion with your supplier, you’ll have to secure a visa and travel halfway around the world.

Political Factors – There are so many issues of a political nature that are plaguing China these days. If these issues escalate, it could affect the outsourcing industry. You need to be prepared to deal with that eventuality.

China Sourcing Tips
Despite the risks, though, there are several good reasons to source products from China. The key is to learn how to mitigate those risks and maximize the potential for success. Here are some tips you may find valuable:

1. Find the right supplier
With the number of entrepreneurs in China’s market today, it can be quite a challenge to find the right supplier. The lure of earning foreign currency often tempts suppliers to exaggerate their capabilities. Be careful not to be misled by promises that seem too good to be true. Do your homework and research a supplier’s experience and track record. Ask for sample products to gauge quality and references to get an idea of the supplier’s work ethics.

samples-for-products-img

It’s advisable to ask for samples of the products you plan to order from a supplier to see if their work meets your quality. Flickr.com photo by Naomi King

2. Study the language and culture
Cultures are unique, and Chinese culture is a lot more complex than most. There are considerable differences between Chinese and American business culture, and you have to be mindful of these differences if you want your China product sourcing venture to succeed. Understanding their culture and the nuances of their language helps you avoid offending the other party. It also helps you develop a lasting relationship, something that is very important in Chinese culture.

3. Make sure you are protected by the contract
When you draw up the contract, make sure it has all the important details, such as product specifications, payment method and schedule, delivery schedule, and penalties for inferior quality. It’s also a good idea to include stipulations on how to handle claims and disputes.

To make the China product sourcing process easier and more convenient, you may want to consider hiring the services of a sourcing agency like Asian ProSource, which has a full team working right there in China and headquarters in the U.S., thereby making communication much easier.

Leave a Reply

Your email address will not be published. Required fields are marked *