Partnerships in business are always a complex and responsible issue. Choosing a reliable partner is not so easy – at first glance, a person may seem reliable, but in reality, it turns out that he will send you a batch of low-quality goods and you will lose profit. To prevent this from happening, you need to know which partners you can cooperate with and which ones you can’t. Since today China is the market leader as the largest supplier of goods in the world, we will consider the features of business partners from China.
Many business people work directly with Chinese factories – this is suitable for those who need to buy a lot and cheap. In China, there are three types of partners that European entrepreneurs usually work with: manufacturers, trading companies, and retailers. They differ in capabilities and ways of working.
Factories usually offer a unique product specifically for the tasks of your business. They can also offer a product that is already being made on the stream. Usually, they offer the lowest price – from 10% cheaper than wholesalers and retailers if you order one type of product. You can control the work directly and set your own quality standards.
Manufacturers make only large and regular orders, so they do not engage in small wholesale – this is not profitable for them. Usually, the minimum lot starts at $10,000. Sometimes the owner is ready to make a conditional 500 copies for trial order if the entrepreneur further guarantees a stable purchase volume.
Reducing the price?
Some try to persuade the manufacturer to reduce the price or the number of purchases, but there is a risk of losing quality. It is possible that the goods will be made according to your requests, but they will definitely save on production or material. Therefore, it is better not to put pressure on the factory – when the conditions are not suitable, it is worth looking for another one.
Also, some factories do not have export licenses. This means that the manufacturer will not be able to issue documents and ship the goods and receive payment directly. In this case, an exporting company is connected to the transaction, which the factory is looking for on its own. Usually, the services of an exporting company cost 0.5-2.5% of the transaction – the price depends on the type of cargo. You can save money if you offer the intermediary to return VAT from the transaction – then you won’t have to pay extra for help. By the way, the absence of a license differs not only from Chinese suppliers of goods but also from bookmakers. Therefore, if you like to bet on sports, choose reliable sites and applications, for example, 20Bet mobile app.
Trading companies buy goods from manufacturers and ship them to other countries. These companies have many customers, so they can sell small volumes. For example, 100-200 copies. But their prices are on average 10% higher than in the factory. This is beneficial if you need to check the demand for a product.
A trading company usually works with different factories, so it can supply several types of goods at once in one order. For example, a toy store can buy 200 plastic soldiers and soccer balls each. If a store wants to buy products from a factory, it will be two separate productions, $10,000 each. It is convenient that you do not need to hire a separate translator to contact companies – most often managers speak English and answer messages around the clock.
Retailers typically charge a higher price than manufacturers and only ship standard products. Ordering a unique development will not work. Change the packaging design, text, or logo too. The price can be 200-300% higher than that of manufacturers.
But retailers are not embarrassed by small lots, for example, in one or two goods. Typically, entrepreneurs work with retailers who are just starting to trade and have not yet found enough customers. As soon as sales volumes grow, it is worth moving to large lots.
How to find a reliable supplier?
You can search for suppliers in two ways: on trusted sites, or at exhibitions and wholesale markets. It is better to work with suppliers directly to control the deal.
Chinese verified sites include Alibaba, Made-in-China, and Global Sources. These are platforms for bulk purchases, where millions of companies offer goods for any business needs. You can find not only such standard products as soft toys but also something more complex – for example, medical equipment.
Exhibitions and wholesale markets help to solve two problems: to find a supplier and immediately check the quality of the goods. Here is one day you can meet with several manufacturers from different parts of China, talk in person, learn about production and negotiate deliveries.
Thus, before choosing a supplier, you need to figure out what specific product it offers, what price is asked for, and what kind of license it has. It is better to use reliable sources and not choose those who offer too low prices – this may be a scam or poor quality.