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Import from China Mini-Course - Part 2 - Section 3

"Can they really supply me?"

There are basically four categories of people who you will be able to make contact with in China if you are obviously a serious import buyer:

 

1. Factories.

Advantage:
lowest prices; you can change the specifications of the product.

Disadvantage:
high minimum order quantities; possibly underdeveloped products v-a-v your market, e.g. no good retail packaging; underdeveloped communications and customer service.

 

2. Export Distributor / Wholesaler

Advantage:
good connections with factories; lower MOQs; still good prices; good customer support and communications.

Disadvantage:
little control of product specifications; may not hold enough quantity / enough variety of stock for your requirements.

 

3. 3rd-level traders and agents.

Advantage:
may be more specialised and experienced in particular products and particular international markets.

Disadvantage:
the prices now include two middlemen, as these traders will generally be ordering from the distributors. In many cases trading companies will charge excessive mark-ups because they know you are not able to contact factories or distributors directly.

 

4. Conmen and scammers, who are not actually selling anything...

Advantage:
when they are amateurish it is kind of funny.

Disadvantage:
there are a million ways scammers will try to take your money, and some of them are quite professional.

 

 

Basically, you should be looking to get in touch with (1) factories and (2) distributors.

The choice between who you deal with will boil down to these questions:

  • What quantities are you buying?

  • Are you buying a product that has already been developed?

  • Do you have complex labelling and packaging requirements?

  • Are you prepared to spend a lot of time negotiating (factories) or would you prefer a lot of the details to be taken care of for you (wholesalers)?

  • Are you even able to communicate effectively with the factory?

  • Which particular supplier has the most experience dealing with your nationality / type of orders, and which do you feel most comfortable dealing with?

 

A general tip I would give is, don't think you're being too clever by doing detective work behind your supplier's back, to find out the true factory source of a product.

By trying to find the original factory source, you could be wasting your time, because it's a strong possibility dealing directly with the factory will be so fraught with problems it's not worth the savings, and by cutting out your distributor you will lose a potentially beneficial relationship. It's like the Aesop's fable of the dog with the bone.

Another thing to bear in mind: when you're talking to suppliers in China, don't take what you're told at face value. If someone says they are the sales office of a factory, they may just be agents or distributors. If someone tells you they are the exclusive provider and it is not possible to buy direct from the factory, that is quite likely not true.

On the other hand, if someone gives you their business card and the company name, logo etc is totally different from the company they are purportedly representing, that doesn't necessarily mean much either. A factory will typically have more than one company name and what you should really be looking for are the trustworthy reliable contacts that will get you what you need in the long term. You will need to exercise your business judgment... and this is even more important if you are not in China...

 

Read on for my tips on how not to get burned by fake suppliers

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