How To Buy Direct From China: Beginners Guide 2024

STEP 1: Performing Due Diligence on Suppliers

You could have a fantastic product and world-class shipping logistics, but it won't mean anything if you're working with a low-quality supplier. You can find suppliers on platforms like Alibaba, but the easiest way to know your supplier is trustworthy is by speaking with at least 50 suppliers and measuring which supplier of the group is the most responsive and knowledgeable about the product.  

You can vet suppliers yourself, but it requires a lot of time and patience. Be sure to request samples, take note if suppliers are unwilling or unable to answer questions, and don't be afraid to restart the search process if a supplier isn't up to your standards. Below is a check list to follow when performing due diligence on manufacturers in China.

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Due Diligence Check List

• Reach out to 30-50 suppliers on Alibaba
• Assess supplier responsiveness
• Gather information on product availability
• Order samples from multiple suppliers to compare product quality
• Compare factory prices
• Compare MOQs and see what kind of flexibility they have with MOQs
• See which factory has a stronger engineering team and the capacity to expand product offering
• Request videos of each factory candidates QC process and equipment
• Provide sample feedback to factory candidates and assess how they answer product improvement questions

STEP 2: Preparing the Factory Order

After receiving samples and measuring which product is best quality, you’ll be that much closer to selecting your supplier and placing an order with the factory in China. Before you place the order with the factory, you’ll want to address any product quality improvements that need to be made during mass production. You’ll also want to finalize your branding artwork on your packaging and make sure you’re ready start production. All thats left after that is negotiating the terms of the purchase. Below is a check list to follow that will help you be prepared for placing an order.

Order Preparation Check List

• Confirm with the supplier any product quality issues that arose during the sampling process and see if any improvements can be made during mass production
• If you’re struggling to decide between suppliers because the product quality and price is the same, try doing google searches on the suppliers to find any negative reviews about them
• Ask the supplier for tiered pricing based on ordering different volumes. This allows you to understand how much money can be saved by ordering larger quantities
• Ask the supplier if you can place a deposit on a larger quantity order and pay the balance as production batches finish. This will allow you free up cashflow
• Find out from the manufacturer what the standard lead time is if the MOQ is ordered. Then ask the factory how you can achieve a lead time in half the amount of time.
• Ask the supplier for a production schedule so you can follow each phase of production
• Provide the supplier with your forecasted sales and your estimated future order dates so that you can negotiate more flexible payment terms
• Confirm with the supplier how defects will be handled on subsequent orders
• Finalize payment details with the supplier so that you’re successfully wiring the deposit to them

STEP 3: Producing the Product

​​​​After confirming all the order details with your selected supplier, you need to focus on overseeing the manufacturing of your product. Your supplier needs clear, understandable expectations for what you want out of your product, and your business should be prepared to conduct some kind of quality control. A physical presence at the factory is the only way to guarantee quality control, which is an included service Kanary provides.

If you can't physically be at the factory, ask your supplier for regular photos and videos of the production process. They should show you finished products, whether or not products are palletized and properly stored, and evidence that your manufacturing instructions are being followed. Below is a check list that will help you oversee production.

Production Management Check List

• Ask the manufacturer for updates based on the production schedule provided to you
• Ask the manufacturer for design proofs of both the packaging file and product file with logo measurements on the product
• Make sure you have bar codes on your packaging. Makes things easier for your fulfillment company
• Confirm the master carton details. Make sure you list the product name, quantity, box measurements, and weight of the box. Makes things easier for your fulfillment company
• Provide the manufacturer with shipping instructions so that they can prepare the shipment of the order well in advance
• Request pictures and videos from the manufacturer when raw materials arrive the factory
• Request videos from the factory when they perform the quality control process
• Nudge the factory to complete production earlier than the estimated finish date
• If you place a large quantity order for the first time with the factory and you don’t have physical presence in China, hire a 3rd part inspection company to perform QC on your behalf

STEP 4: Shipping, customs clearance and delivery

Even after you get a quality product manufactured, you still need to import it cost-effectively. There are many ways of shipping. You can ship the inventory to a 3PL in China. DTC brand owners in e-commerce utilize this strategy because it allows them to sell to the global markets and lets them launch products the fastest. Many of our clients that target both the US and other markets like the EU, will use a hybrid fulfillment strategy, which means they will ship inventory to both the 3PL in China and their fulfillment partner in the US.

If you ship to the US, you can ship your inventory multiple ways: DDP sea shipping for smaller shipment batches or shipping by full container loads. If you ship FCL (full container loads), you’ll need a logistics company to book the vessel and ship to the port in the US that’s closest to your 3PL. When your shipment arrives the port, you’ll need a customs broker to clear customs for you and work with a trucking company to schedule the freight from the port to your US fulfillment provider. Below is a check list to help you be more prepared for your shipments.

Shipment Preparation Check List

• Collect shipment measurements and weights from the manufacturer. That will allow you to get quotes from different logistics companies
• Send shipment details to logistics companies to get quotes on air freight, sea freight DDP, and standard sea freight
• Compare both pricing and transit times with the shipping quotations
• Work with the logistics companies on applying for cargo insurance
• Make sure after the manufacturer completes production, they provide you with a commercial invoice and packing list
• Follow up with your logistics company during the shipment on a weekly basis to get delivery updates
• Make sure to give delivery updates to your 3PL in the US so that they can be prepared to receive the shipment
• Confirm with your 3PL all goods are accounted for. If anything is missing in the shipment, check with the logistics company and contact your factory that you have items missing

High Output in Less Time (Scalability)

Costs can delay scaling, but long timeframes can put a damper on exciting growth. The manufacturing industry in China is well-developed and equipped to help a variety of different businesses quickly and easily scale. Factories in China tend to be more flexible with MOQs and offer consistent lead times compared with factories in the Southeast Asia.

Many e-commerce brand owners think because of the new Trump tariffs, they can quickly switch manufacturing to Southeast Asia, however, factories in that region tend to have higher MOQs and longer production lead times because a lot of the raw materials still need to come from China. On top of that, the infrastructure is less developed and the remote areas where the factories are located sometimes have power outage issues. Buying from factories in China gives you the most flexibility when it comes to MOQs and having consistent lead times.

Product Customization

Your business won't be pigeon-holed into a limited product selection. Manufacturers in China are often experienced with customizing existing products to fit your specific needs, and certain factories can help develop unique product prototypes. Kanary has a deep understanding of what factories specialize in specific product customizations, making it easy to find the perfect match. If you are working with factories in China directly, its important that your manufacturer has a strong engineering team in order for them to come up with solutions to improve your product quality.

Fulfillment is Advanced

China is the most advanced when it comes to fulfillment for e-commerce businesses. Shipping rates from China are more competitive than if you kept your inventory in the US and had to ship online orders to Europe. The shipping transit times are faster from China too. If you manufacture products in China, you can send your inventory to a fulfillment provider in China and immediately start selling. China fulfillment gives you the most opportunity to sell in different country markets while also launching new products very quickly.

Not Understanding Cultural Differences (Communication)

Language and culture barriers present challenges to e-commerce businesses looking to source products from China. Not sharing a common language will make negotiations difficult and can cause problems with communicating product specifications or customizations.

Its very common for suppliers to have difficulty explaining problems that occur during production, such as defect issues or production delays. Don’t get too angry with your suppliers or else they’ll be less interested in helping you. Just keep asking questions in different ways to make sure they understand you and you’re getting to the bottom of things. Kanary has a team of bilingual experts to ensure that negotiations are precise and that product needs are delivered clearly.

Choosing Products Based on the Lowest Price

Businesses will face the temptation to seek the factory that offers the lowest price, but this is often a huge mistake. China manufacturers offering the lowest price often lack professionalism and cut corners on product quality. On some occasions, factories offering the lowest price may be located in a region that dramatically increases shipping costs, which will wash away any savings without adding any benefits.

When we assess factory options for e-commerce brand owners or dropshippers we work with, we request samples from as many credible suppliers as possible. After we narrow down options based on product quality, we then assess the factories responsiveness, product knowledge, production lead times, and finally price. Factory responsiveness and product knowledge are significantly more important than selecting a supplier based on price.

Starting An Order Before Receiving Samples

Even if you find a reliable manufacturer, starting mass production before seeing samples is a common, and costly, mistake. Your product could have design flaws or problems, and your manufacturer may make mistakes in following your parameters. The sampling process offers proof that your design works and that the factory understands your specifications. It's always best to order samples from multiple manufacturers in case one of the suppliers sends you a poor quality sample.

Kanary knows how to expedite the sampling process to make sure the factory is ready for mass production without wasting unnecessary time with communication issues or shipping delays around your samples.

Slow Responses To Your Supplier

Most e-commerce DTC brand owners think they can just pay their China supplier and stop paying attention to production so that they can solely focus on marketing and scaling. However on many occasions, especially when manufacturing skincare or supplements, the supplier has a lot of details to confirm. If you’re slow to respond to them, it will delay production. In some cases, the factory may pause production and work on producing another clients order, which would create significantly longer delays. Always be in communication with your manufacturer in China and make sure you’re putting the ball in their court.

As sellers turn to Amazon, there’s no better time to source from China

The coronavirus pandemic has clobbered businesses worldwide with one exception – e-commerce, particularly Amazon. As lockdowns and mobility restrictions in early drove brick-and-mortar shops to down their shutters, many of them permanently, Amazon sales rose 40% year-on-year in the April-June quarter. It earned $5.2 billion in profits, doubling its earnings from the same period last year. This, despite the e-commerce giant hiring 175,000 new workers to deal with the sales rush and spending $4 billion on coronavirus-related safety measures. The record sales and revenue were driven by locked-down shoppers taking their buying online. And it wasn’t just Amazon that benefited in those early days of fear. According to a Mastercard SpendingPulse report, e-commerce accounted for 22% of retail sales in the United States in April-May, up from 11% in the same period in . In the United Kingdom, this figure was a record 33%. (The US and UK are the world’s second and third largest e-commerce markets with China taking the top spot). 

The rise of e-commerce in a Covid-19 world, we believe, underscores a broad shift to digital in the way we live, work and buy. Months on, the virus continues to affect economic and social activity. A return to the old ways of doing business seems impossible, at least any time soon. Hence, many sellers are looking to take their businesses online.

This blog explores what it takes to be an Amazon seller, with a focus on how a trustworthy sourcing agent can help make the experience a profitable and fulfilling one. If you are not a manufacturer of goods, you might be aware that sourcing the right product from the right place is key to being a successful seller on Amazon. This is where a sourcing agent like Sourcing Allies comes in, with our experience and expertise in sourcing a wide variety of products from China – the world’s factory. Read on.                       

Amazon, the world’s market 

Amazon is the world’s second largest retailer after Walmart, according to Forbes. It has 2.2 million active sellers, 742,000 of whom joined its platform this year, says e-commerce data analyst Marketplace Pulse. It consistently places near the top of consumer satisfaction rankings.  

Amazon sells just about everything, from home appliances, electronics, office supplies, books and toys to food, beauty products, shoes and apparel. Where does it sell this vast inventory? On Amazon.com and Amazon Marketplace, the two entities on the Amazon website that make one whole.

• Amazon.com: Products owned by Amazon are sold on amazon.com. It sources wholesale goods from distributors/manufacturers through the invitation-only programme Amazon Vendor Central. The first-party sellers sell their inventory in bulk and pass on ownership to Amazon. Products on this platform come with a “ships from and sold by Amazon.com” tag.    
• Amazon Marketplace: This is where third-party sellers sell their products (new and used) under their own brands to Amazon customers directly. They retain ownership of the goods but Amazon gets a share of the profits. Third-party sellers account for more than half of Amazon’s sales. Marketplace is open to individuals and companies through the Amazon Seller Central programme. Marketplace products are either Fulfilled by Amazon (FBA) or Fulfilled by Merchant (FBM).
• Fulfilled by Amazon (FBA): The seller sends inventory to an Amazon fulfillment centre and the company handles packaging, shipping and customer communication. This saves the seller the hassle of logistics and makes their products eligible for Amazon Prime’s fast shipping benefits.        
• Fulfilled by Merchant (FBM): The seller takes care of packaging and shipping. The benefits include lower Amazon fees – no need to pay FBA storage/fulfilment charges – and higher profits. The seller also has immediate access to inventory and can respond quickly to customer complaints.                                                   

5 ways to sell on Amazon

• Drop shipping: A third party manufactures and ships the product on the seller’s behalf. Amazon’s drop shipping policy, however, requires that all packaging, invoices and communication carry the seller’s name.    
• Retail arbitrage: The seller buys goods on discount from a retail store and sells them at a profit on Amazon. Arbitrage is associated with low margins. The trick is to pick the right product.
• Selling wholesale: The seller buys wholesale goods in bulk and sells them on Amazon. This is the business model favored by a quarter of third-party sellers.      
• Selling private label products: The seller buys products made by a third-party company and sells these on Amazon after branding and marketing them as their own. 
• Manufacture and sell: The seller is the manufacturer too. The profit margin is higher and they have greater control over product quality, but they also incur manufacturing costs. Additionally, Amazon has an artisan-only community, Amazon Handmade, for handcrafted goods.       

Why Amazon?

• Household name: Everyone knows Amazon and trusts it.
• Huge market: Selling on Amazon means access to its 300 million active customer accounts.
• It’s easy: Joining Amazon is simpler than launching your own website. Amazon also does a lot of the heavy lifting for you (marketing, logistics).    
• Big savings: With FBA, Amazon stores your inventory, for a fee. But you’re still saved the expense of getting your own storage space.      
• Grow your business: If you’re not with Amazon, you might get left behind.  

But beware! Some drawbacks 

• Intense competition: This might compel you to sell at a lower price, especially if you sell a product sold by many. 
• Gaming the Amazon system: Unscrupulous sellers might hijack your sales listings to sell their products, which might be counterfeit. They might also deface your product listings and leave fake reviews to sabotage your business. Here’s how listings get hijacked.     
• High commissions: From storage to shipping, Amazon conveniences come for a price. This, and its insistence on free delivery, can narrow profit margins.

Getting started

If you are convinced Amazon is the way to go, the first thing to do is register:

• Go to https://services.amazon.com
• Pick a selling plan – Individual costs $0.99 per item sold, Professional comes for $39.99 a month. If you’re selling on a smaller scale (less than 40 items a month), Individual is right for you. 
• Next, set up your account. You’ll need to furnish some information – number, address, physical address, government ID, credit card and bank details, tax information, product specifications. Follow the steps, go through the verification process and you’re in.    

What it takes to be an Amazon seller

Setting up your Amazon seller account is easy. The difficult part comes before. You must complete two important tasks before you register. The first is to decide on a product you can make or acquire inexpensively and sell for a profit. The second is to source that product. 

1. Find a product

This requires some research of products, market trends, sales data and competitors. For those who don’t already have a product in mind, here are a few things to consider:

• Price: Don’t go too high or too low. A range of $10-$50 is considered ideal as it attracts impulse buys.
• Demand: A product that sells 10 units a day all year round is safe. Don’t go for seasonal products.     
• Competition: If there are many sellers of the same product and they’ve racked up some strong reviews, you might want to look for something else.
• Durability: Amazon sellers deal with more returns than other sellers. Make sure your product is sturdy.
• Weight: Pick something small and light to save on shipping, storage and return costs.                

Don’t worry. There are plenty of product research tools, paid and free, that can help you with the research. A few popular ones are:

• Amazon Best Sellers lists: Amazon has lists of the top 100 best-selling products in any category. Go through these to get a fair idea of what a good product is.    
• Amazon Best Sellers Rank (BSR): Each product on Amazon comes with a rank based on orders compared to other products in the same category. It is found in the product description section. The lower the BSR, the better it is.   
• Google Trends: A simple web search can tell you if your chosen product is in demand all year round.     
• AMZScout: This tool offers useful information such as BSR, monthly sales, profits, competitor levels.
• Keepa: This price tracker comes with comprehensive price history charts and price drop and availability alerts.

2. Source your product

• Make it yourself.
• Manufacture locally. This might be expensive, but your chances of getting a quality product quickly are high.
• Source it from overseas, especially China. This is where we – China sourcing agent Sourcing Allies – can be of help. More on that later. 

Why China?

China is a manufacturing powerhouse. In , it accounted for 28% of global manufacturing output. In second place, the US was more than 10 percentage points behind. The Asian giant is unlikely to be unseated from this dominant position despite recent setbacks, such as the US trade war and the backlash over the coronavirus, as well as changing conditions at home, including rising wage demands, a declining working-age population and stricter environmental laws. That’s because China has some well-established advantages over potential rivals such as Vietnam, India and Bangladesh:

• China has been the world’s largest exporting nation since . In , it exported $2.5 trillion worth of goods. 
• It’s industrial scale is unparalleled. It is home to diverse globally-competitive industries such as smartphones, clothes, computers and furniture.     
• A unique feature of China is the existence of clusters of factories producing the same product or related to the same industry in a single city or region. For example, Changsha is known for fireworks, Dongguan for electronics, Ningbo for injection moulds and Yangzhou for leather shoes. Clustering means efficiency in manufacturing and use of supply chains.         
• China’s supply chains are among the most developed.     
• China might be export-driven, but it has a huge domestic market. 
• To remain competitive, it has invested heavily in technology, infrastructure and skill development.
• It shows a dogged devotion to the economy. As the world was going under lockdown in March, factories in China were already reopening.                 

Where to look for China suppliers?

There are many routes you can take to find a China wholesale supplier:

1. B2B websites: Look for them on online marketplaces like Alibaba, Global Sources and Made in China. They provide customer reviews and have rating systems for manufacturers, which can help you select and shortlist.
2. Trade fairs: If you have the time, money and inclination, visit a trade fair in China or one that attracts Chinese manufacturers in another country. Direct interactions are great for fostering long-term relationships. China hosts several trade fairs every year, including the bi-annual Canton Fair, its largest.
3. Industry resources: Recommendations from trade bodies and fellow business owners is another way of finding China wholesale suppliers.
4. Sourcing agents: A China sourcing agent, such as Sourcing Allies, can help you find suppliers and guide you through the often complex sourcing process. Sourcing Allies has been helping businesses in the US and western Europe manufacture and source from China, India and eastern Europe since . When it comes to finding China wholesale manufacturers, Sourcing Allies has a distinct advantage over its competitors:

• We have a professional team in China with on-the-ground experience and know-how about the way the country functions.
• We can help you find an original equipment manufacturer (OEM) in China. An OEM is a manufacturing specialist that makes a product or component for another company – that would be you – that provides it with the product design and specifications. You can sell this product or component as it is or by adding value to it (assembling it with other components) under your brand on Amazon.
• We can help you select and shortlist suppliers by considering production process and product type. Then, our team will provide a quote based on that. In addition, we will carry out a supplier evaluation, which will give you finer details ranging from health, safety and environmental responsibility to production capability and capacity. 
• At all stages of production, we will clearly communicate your requirements to your chosen manufacturer, conduct quality control inspections, take care of documentation, shipping and transportation, draw up payment terms and troubleshoot any problems that arise. We also offer order financing.

Read our in-depth guide to finding a manufacturer in China.

Contact the most promising suppliers and tell them your requirements.

‍How to shortlist a supplier 

The next step is to shortlist, verify and finalise a China wholesale supplier. As a first step, we recommend you contact the most promising suppliers and tell them your requirements. These include:

• The raw materials and components you want for your product. Don’t forget to specify their quality. Some suppliers might use recycled material unless otherwise told, which could lead to problems down the road, depending on the product’s final intended use.
• The price per item you are willing to pay.
• Your minimum order quantity (MOQ).   
• Whether you want the supplier to help develop the product or come up with a prototype or product sample. Experience tells us that most China wholesale suppliers are not keen on development projects as these are time-consuming and costly. So, it is important to lay your cards on the table at the beginning.

To know if the supplier is up to the task, ask them a few questions:

• Do they specialise in making the product you require, or in that same production process?
• Do they export to your place of business?
• What MOQs do they usually work with?
• How long have they been in business?

Having a China sourcing agent walk you through this process can be helpful, especially if you are sourcing for the first timer. Sourcing Allies can help you: 

If you want to learn more, please visit our website china tools wholesaler.

• Sniff out unreliable suppliers and scams
• Negotiate fair rates
• Make sense of language and cultural differences, which can be a source of unforeseen trouble      

Verification: Is the supplier legit? 

If the business of sourcing is like going to war, then information is your greatest weapon. A quote by the Chinese general and strategist Sun Tzu holds a lesson:

“If you know the enemy and yourself, you need not fear the result of a hundred battles. If you know yourself but not the enemy, for every victory gained you will also suffer a defeat. If you know neither the enemy nor yourself, you will succumb in every battle.”

It is imperative to know if the supplier is who they say they are and has the capability and expertise to produce what you require. To verify their credentials: 

• Ask for and check their business licences, certifications, audited accounts and tax invoices
• Locate the local government office that has jurisdiction over the supplier/factory and check their records
• Find out if the factory has engineers or specialized workers with the expertise to produce the type of product you want
• Find out the factory’s location. Given China’s cluster system, a location is often an indication of whether the supplier is a manufacturer or a reseller
• Ask for a prototype or product sample before finalizing your order 
• Visit the factory in China or have your China sourcing agent do it for you. If you go through Sourcing Allies, you can expect multiple factory visits, in-process quality checks and in-person troubleshooting of any problems that might arise during production                 

Placing your order

Now that you’ve finalised your supplier, you’re ready to place your order. But there’s still a final checklist to cross off:

• Buy directly from a manufacturer. That’s the universal rule of sourcing. But sometimes, it makes sense to work with a reseller. For example, if your MOQ is modest, a large manufacturer might not give it the importance it deserves.  
• Be clear about pricing. Fix a price and the period it is valid for. If not, changes during the production stage – a rise in raw material costs or exchange rates – might leave you with a heftier bill. Be sure to communicate all requirements, packaging standards and quality standards with international specs in the quoting stage itself. Unspecified requirements and expectations that continue to grow through the sampling stage are the quickest ways to a price hike. Try to negotiate an overall bill with packaging, shipping, transport and customs clearance costs included. Never pay in full in advance. Read our tips on favourable payment terms here.                
• Check your supplier’s production schedule to make sure you haven’t been double-booked. Some China wholesale suppliers double book to avoid loss of business on the off chance that an order doesn’t go through or is delayed.    
• Don’t blindly leave the shipping to your supplier. They might not be inclined to get you the best freight rates. You can choose a carrier yourself or have your sourcing agent take care of it. When Sourcing Allies handles shipping, we offer the most time and cost-effective solutions. Let’s say, a client requests an urgent and unscheduled shipment of a portion of their goods. We arrange a quick air shipment to meet their immediate needs and send the rest of the goods by sea. We can also arrange priority shipping or have the client’s consignment first off the ship.  
• Pay attention to lead times (time from production initiation to delivery). Factor in the time it would take your China wholesale supplier to source raw materials, get them to the factory, manufacture the product and ship it. Be aware of potential delays caused by holidays (Chinese New Year, Golden Week) and shipping peak seasons.            
• Before the product leaves China, make sure it meets your country’s standards on safety and intellectual property, among others. Sending it back is almost always not a workable solution.

Shipping the product

After the products are ready, they have to be shipped – but to whom? If you are an FBA seller, you have two options (which would hold true even if Sourcing Allies were to handle shipping for you). 

1. China to Amazon FBA
The manufacturer/supplier ships your inventory directly to Amazon’s fulfilment centres.

Advantages

• The goods reach Amazon faster, so you can start selling that much quicker.
• If you’re on a tight budget, consolidated shipments from China can help you save on costs.

Disadvantages

• You have no way of inspecting the quality of the goods before they reach Amazon.
• You have no control over whether your supplier has fulfilled Amazon’s packaging, labelling, shipping and barcode requirements.
• Amazon might request that shipments be sent to different warehouses each time. 

2. Shipping to yourself/middleman
The manufacturer/supplier ships the goods to you or your nominated middleman. You, or the middleman, then send the goods to Amazon.  

Advantages

• You can inspect the goods to ensure they meet your quality requirements.
• You can make sure the shipment complies with Amazon’s packaging and shipping requirements, reducing the chance of it getting rejected.

Disadvantages

• Transit time is longer.
• Hiring a middleman means paying them.
• If you’re doing it yourself, it takes time and effort.

Made-in China: Can I trust the products?

There are numerous consequences to selling poor quality products on Amazon:

• Complaints and bad reviews
• Frequent returns and low sales
• Removal of products from sale
• Suspension/deactivation of Amazon account

When it comes to sourcing from China, there is a perception that made-in-China equals poor quality – though this is gradually changing. Some quality problems do crop up with goods sourced from China, along with other issues. Fortunately, most of them have simple solutions.

• Golden sample: The sample your supplier sends you is perfect but the rest of the products don’t match it. To avoid this, be very specific about product quality. Put it in writing, clearly and in detail. Of course, verifying your supplier before placing your order goes without saying.
• Cha Bu Duo: China sourcing agents dread this phrase, which translates into “close enough”. For example, the manufacturer delivers a product that clearly does not meet certain quality specifications but insists it’s close enough. Dealing with this cultural quirk is difficult. But an experienced sourcing agent can find a way around it.
• Quality snags: Some quality problems are unavoidable. But with the right collaboration between your sourcing agent and the manufacturer, even a seemingly impossible flaw can be fixed. Sourcing Allies encountered such a problem on a recent project involving die cast components. The component had an inconsistent surface finish whereas the client wanted a high surface finish. A design flaw – the parting line, where the two halves of the die cast mould meet, was on a visible surface – and the need for excessive polishing to correct that flaw had given the component a less than aesthetic finish. Luckily, we caught the problem at the sampling stage. To fix it, we modified the tool so the parting line would fall on a surface hidden from view. Result: We got the desired finish and the reduced polishing cost offset the cost of the tool change.
• Price change: Oftentimes, suppliers jack up the product price after signing the contract because they had not fully understood the buyer’s requirements, which might or might not have been clearly communicated to them. The answer, again, is to spell everything out in writing.       
• Cultural quirks: Dealing with a China wholesale supplier, as opposed to one in Europe or the US, is a vastly different experience. Their approach and attitudes are different. We’ve noticed that suppliers in Asia don’t like asking questions and informing clients about delays and problems. They think this reflects poorly on them. Letting your supplier know you welcome their questions can save you a lot of trouble later.
• Delays: Delays are a given in manufacturing. Make sure to send your supplier frequent reminders through your sourcing agent. At the same time, be reasonable about lead times and give the supplier adequate time to procure raw material, make or order components, manufacture or acquire the final product and ship it.  
• Packaging issues: A good product can amount to trash if not packed to withstand the long overseas journey. Before shipping, ensure your shipment is packed in export-appropriate boxes, secured with pallets and properly stacked in containers. With Sourcing Allies, you can count on your cargo being palletised.

Read our detailed blog on sourcing from China.

You might need quality control inspections

Your goods arrive from China, you discover they are not up to the mark, but it’s too late to do anything about it. Quality control inspections before the goods leave China are the best way to avoid such a fate. You can do it yourself. Better yet, you can hire a company that specialises in it or have your sourcing agent do it for you. Most factories are open to quality checks. Avoid those that show resistance. While inspections add to your costs, they’re worth the expense because:

• Manufacturers might be tempted to use cheap, poor quality material if left unchecked
• It is cheaper and easier to fix a problem before the product has been shipped
• Remaking defective products is not viable for the supplier. Also, refunds are rare in China. The best you can hope for is credit on your next order, if you wish to continue working with the same supplier.   

There are three types of quality control inspections:

• Pre-production: The prototypes / samples are inspected.
• Production: The inspector reviews the first few finished products.
• Pre-shipment: The inspector visits the factory in China when the order is 80%-100% complete and ready to be shipped. This is the only option that offers a full inspection and is, naturally, the most expensive.

When a quality control inspector visits your chosen factory in China, they perform the following checks:

• Quantity: They verify the order quantity. They also ensure the quantity per carton in your shipment is uniform and complies with Amazon’s packaging and prep requirements. For example, if there are 500 pieces of the same product and five cartons, each carton should hold 100 pieces.
• Conformity: The inspector verifies product style and colour as per your specifications. They also check for compliance with labelling, packaging, shipping requirements. For example, Amazon requires readable, scannable labels with white backgrounds. It also demands carton drop tests to determine if the shipment can withstand rough handling during shipping. 
• Workmanship: The inspector checks the appearance and basic function of the product. 
• Function: A more detailed review of the product’s function is done.
• Others: More checks might be required based on product type. You can provide your quality control inspector with a detailed list of checks.

When Sourcing Allies handles quality control inspections, there are two ways we go about it:

• Our team in China handles it. First, we recommend that the checks be performed during the sampling stage, which is the best time to catch inadequacies and fix them. Also, our checks are done to specification, so we require our clients to provide us with clear specifications.
• In some cases – when the factory is too far from our office, for instance – we delegate the inspection to a trusted, verified third-party inspection company, whom we have been working with for many years.

Order financing

Sourcing a product from China or anywhere else, expanding your inventory and growing your business, all of it requires money. Most Amazon sellers start off small and don’t have a pile of cash lying around. Times are particularly hard these days. They could take the classic route to raising capital – a bank loan. However, we’ve noticed that traditional banks are reluctant to lend to small businesses. Thankfully, there are still lending options available:

• Amazon Lending: Since , Amazon has lent small businesses amounts ranging from $1,000 to $75,000 through this invitation-only programme. To receive an invitation on your Seller Central account, you need decent sales and reviews for at least 12 months. Amazon charges an interest rate of up to 16% on such loans and the repayment period is 12 months, according to borrowers. The application process is easy and entirely digital. 
• Line of credit: A line of credit works like a credit card. There is no lump sum disbursal as in a loan. Instead, you receive a revolving line of credit. When you pay back an amount, it is available for withdrawal again. Amazon sellers can raise between $5,000 and $5 million from such lines of credit. Lenders might charge an annual fee apart from interest. One such line of credit comes from Amazon’s own stables, in partnership with Goldman Sachs. The Marcus credit line, as it is called, offers up to $1 million at interest rates of 6.99% to 20.99%.
• Merchant cash advance: This is a cash advance against future sales, suitable for businesses with large credit card sale volumes. The lender charges a fixed fee and no interest, instead taking a percentage of daily or weekly sales as repayment. Sellers can borrow up to $250,000. The repayment period is usually 18 months or less.
• Peer-to-peer lending: You receive a loan not from a bank but from individuals you are matched with on a peer-to-peer (P2P) lending platform. Once you post the amount you want and the interest you are willing to pay on the lender’s website, potential investors will bid on your loan. A P2P loan is more expensive than a regular loan and requires a high credit score.
• Factoring: You raise funds by selling your invoices to a factoring company, which then collects payments from your customers. This is an easy way to get money quickly. Most firms charge an overall factoring fee but some may also charge for money transfers and operational costs.
• Sourcing Allies loans: We offer short-term loans (30 to 60 day terms) to customers on a customised, case-by case basis.  

Custom branding

Once your cash flow needs are settled and you’ve started selling regularly on Amazon, you might want to level up and build your own brand with a brand name, logo and specially designed packaging. A successful brand is all about providing an enhanced shopping experience and achieving better sales as a result. There are two ways to having a branded presence on Amazon:

Amazon Brand Registry

This programme allows eligible brand owners with a trademark registration number to enroll their brands on Amazon. The registration process is simple. The benefits include:

• Greater access to and control over product listings, so your customers always see accurate product information
• Protection for product listings from other sellers. Brand Registry is a countermeasure against counterfeiting and sabotage
• Enhanced brand content, or the ability to offer your customers more details about your products in a visually appealing way (through images and text)   
• Higher conversion rate, with more customers converting visits to the website into actual sales
• Swift approval of advertisements by Amazon

Amazon Store

Any seller registered with Brand Registry can open an Amazon Store. This is a self-service product that allows brand owners to design, curate and create multi-page stores for their brands and products on Amazon free of charge. There are many benefits to being a Store owner:

• Introducing your brand to shoppers through customised images, videos, texts
• Building brand awareness with your own web address (amazon.com/YOUR BRAND) and customised store
• Offering customers an enhanced shopping experience on mobile and desktop
• Sending shoppers to your Store through sponsored brands and ad campaigns 
• Optimising your ads using valuable information (sales, visits, page views) from the Stores insights dashboard
• Designing your own Store is easy and requires no knowledge of coding    

So there you have it, all the information you need on what it takes to be an Amazon seller and to source your goods from China.   

Sourcing Allies: Your guide to sourcing from China

To sum it all up, here’s what we can do to help you source quality products inexpensively from China:

• Shortlist, select, evaluate original equipment manufacturers (OEMs) and suppliers for the product you intend to sell
• Provide quotes, negotiate fair rates and payment terms
• Offer order financing
• Clearly communicate your requirements to your chosen supplier
• Conduct quality checks at various stages of production
• Ship your goods to your desired destination, offer shipping and tariff solutions 
• Take care of documentation at all stages of the sourcing process 
• Guide you through difficulties posed by cultural, language differences 
• Troubleshoot any problems that might arise

Sourcing Allies is a team of expert China sourcing agents that has helped western customers manufacture and source products from low-cost regions since .

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