Sourcing products from China for your Amazon retail business involves many key decisions. If your China Home Storage Suppliers can consistently provide you with high-quality products at profitable prices, you can succeed.
In 2019, third-party sellers on Amazon sold nearly 60% of online merchandise, and the value of goods sold online reached $200 billion. As we all know, nearly 70% of Amazon sellers are from China.
While sellers rely on factories in China to manufacture and supply proving lucrative products, the ongoing health crisis triggered by the pandemic presents many challenges.
One of the concerns of many Amazon sellers looking for China Home Storage Suppliers for their Amazon selling operations is whether manufacturing activity and exports in China have resumed after production fell during the peak of the pandemic.
Recent trends suggest that manufacturing activity in China started climbing in June 2020, suggesting a gradual recovery after the downturn caused by the coronavirus.
According to data released by the National Bureau of Statistics, the purchasing managers’ index rose to 50.9 in June. A figure above 50 indicates that manufacturing activity conditions are improving. While businesses and factories resumed production, medium and large firms improved and received more orders compared to small firms.
More positive news came in October 2020, with data showing that China’s imports and exports have grown in recent months, a clear sign of economic recovery. While imports rose 13.2% in September, exports rose strongly as more trading partners eased coronavirus restrictions, further boosting the economy.
Although the process is gradual, it is clear from these data that manufacturing is showing all signs of a rapid recovery and will return to pre-COVID levels in the near future.
Here are some factors to keep in mind when adding China Home Storage Suppliers to your supply chain:
Understand China Home Storage Suppliers And Their Supply Chains in China
Knowing which factories or China Home Storage Suppliers you are dealing with and understanding the production operations of each factory enables you to make informed strategic decisions. Before sourcing any product from China for an Amazon selling business, it is important to first analyze the supplier.
Make sure it’s the manufacturer, not the dealer or trading company you’re dealing with. With many distributors masquerading as manufacturers in the market, it can be confusing to identify among purchasing agents, trading companies, manufacturers or wholesalers.
Working directly with the manufacturer can help you maximize profit margins because you cut out the middleman. Many manufacturers also have their own network of China Home Storage Suppliers who can manufacture different parts or assemblies. When investigating a manufacturer’s quality standards and reliability, it is important to know if the supplier follows any method to ensure the quality of the sub-supplier or contractor.
Attending import, export and international trade fairs such as the Canton Fair is one of the recommended ways to meet China Home Storage Suppliers in person, build rapport, and verify their authenticity.
Many China Home Storage Suppliers started searching on Alibaba and other marketplaces. However, all China Home Storage Suppliers who are awarded the “Gold Supplier” label on Alibaba are not necessarily genuine or high quality. Gold supplier status is granted to China Home Storage Suppliers who pay premium membership fees on Alibaba.
Besides Alibaba, you can also explore other marketplaces such as:
1688.com, the Chinese version of Alibaba, has mainly traders rather than manufacturers. Since it is only available in Mandarin, you will need the services of a Chinese sourcing agent to communicate.
Globalsources.com is a Hong Kong-based company and a leading B2B marketplace with 30 offices in China. The list of vendors on this platform is well vetted.
Made-in-china.com is where you can find some of the latest Chinese products with a simple user interface.
Tradekey.com is an international electronic marketplace with 9 million distributors and consumers in more than 240 countries.
AsianProducts.com and DHGate.com are other marketplaces worth exploring. DHGate.com has a secure payment system where payment will only be made after the buyer confirms receipt of the goods, thus keeping the transaction safe.
A China Sourcing Agent can help with all the follow-up needed to identify suitable China Home Storage Suppliers in China, build rapport, negotiate prices and communicate your requirements. They can also visit the supplier’s factory, inspect the process and get samples for your evaluation.
These agents also handle shipping and logistics, while developing backup plans in case something goes wrong along the way. This will help you avoid costly mistakes, delays and scams when sourcing from China.
Logistics and Transportation
Taking shortcuts in the Chinese supply chain can be counterproductive in many ways and have a major impact on your bottom line. One of the most expensive shortcut mistakes is not having proper quality control checks and balances. Quality control inspections are not only mandatory but must be done before the goods leave the factory in China and before you pay for the goods.
Another mistake many Amazon sellers make is to entrust shipping entirely to China Home Storage Suppliers, thinking it’s the fastest and easiest way to handle the goods.
Some Amazon sellers prefer to ship directly from China to Amazon FBA (Fulfillment by Amazon). Fulfillment by Amazon is a service Amazon offers sellers to store their products in the e-commerce giant’s fulfillment centers, where Amazon packs and ships them to customers.
Shipping from China to Amazon FBA translates into faster shipping times for your products to reach Amazon’s warehouses, which in turn means you can start selling on Amazon sooner. You can also save the cost of middlemen this way. The challenge, however, is that the products have to be shipped to different warehouses, and duties and shipping have to be paid. These products must also meet packaging and labeling standards set by Amazon.
Another way to ship products is to use a middleman and then forward the goods to an Amazon warehouse. Using a 3PL has its own advantages, such as being able to ship products in a consolidated form to one location, while you can also inspect them to ensure their quality. The main disadvantage of using a middleman is that you need to pay a third party to handle the goods, and the shipping time is longer.
When you want to source products from China, a major consideration has to do with shipping methods. Ocean freight is often the first choice for bulk shipments, while air freight is appropriate when time is of the essence.
In addition to time, there are also cost considerations associated with different shipping methods. According to the World Bank, the cost of air freight from China can be 16 times that of sea freight.
However, the cost depends on the quantity and weight of the consignment. Shipping by air may be a better idea when smaller quantities are involved. In addition to cost and time, you also need to understand the type of product you need to ship. If it’s a fragile product or susceptible to damage from weather changes such as humidity or temperature, sea shipping may not be the right choice.
To add a Chinese supplier to your supply chain, other shipping terms and documents you need to be familiar with include:
FCL, or “full container,” refers to a 45, 40 or 20-foot full container. Although less common, ten-foot containers are also available. If the volume of the cargo is 18 cubic meters, the FCL may be the best choice.
LCL stands for “Less Than One Container Load” and is preferred when the order is not large enough to fill an entire container. This type of cargo is combined with other cargoes and shipped in mixed containers. If your product is between 2 and 3 cubic meters, it meets the minimum requirements of the LCL.
FTL means full truckload, while LTL means “less than truckload” and is usually used for domestic deliveries.
International logistics-related documents
A pro forma invoice is a quotation that includes a description of the item to be shipped, details of the seller and buyer, the item’s price, currency and HS code, the accepted system used by border controls and customs to classify goods. The invoice will also include delivery details and their cost.
Commercial Invoice: A commercial invoice is the official version of a pro forma invoice, which is required at customs.
A packing list is a document that contains the list of goods, gross and net weights, package dimensions and other special instructions. Freight forwarders use the packing list to make a bill of lading, and customs officials use the list to get the location of the packaged items they wish to inspect.
A Certificate of Origin is required to determine the origin of the goods being shipped.
A customs declaration is a document that declares the quantity, type and value of goods loaded and is checked by customs authorities.
A bill of lading is a contract between a shipping company and a shipper for the shipment of goods, and it is also a receipt issued by the carrier upon receipt of the goods.
Optimize communication across the supply chain
Communication disruption can be one of the main pain points when adding China Home Storage Suppliers to your support layer chain. The most common communication methods related to sourcing from China are Excel spreadsheets and emails. While these disjointed approaches can work on a limited scale, they can also easily fall apart when there are complex orders, technical specifications, or other details.
China Home Storage Suppliers often do not communicate freely when it comes to business relationships due to fear, lack of trust, or because expressing their opinions strongly and giving feedback is not part of Chinese culture. Guanxi is an integral part of a Chinese business relationship and refers to establishing a personal trust and strong relationship with someone, and may involve moral obligations and the exchange of favors.
While this aspect of relationships may not always play a role, seasoned companies that regularly do business in China see it as a factor that gives them a clear competitive advantage. Before starting any business, relationships with China Home Storage Suppliers need to be established and developed.
People doing business in China themselves spend a lot of time getting to know China Home Storage Suppliers or contractors before doing any transaction. Once a connection is established through a relationship and the individual is considered trustworthy, the process of business transactions is much smoother.
China Home Storage Suppliers treat customers differently depending on how strong their relationship is. When relationships are good, China Home Storage Suppliers favor customers, and customers tend to get better deals and benefits than customers who don’t have a relationship.
In addition to the challenges of building relationships with China Home Storage Suppliers, you also have to deal with language differences. The technical terms used by many Amazon sellers and businesses seeking to source from China include phrases, descriptions and words that cannot be easily translated into Chinese. This makes it difficult to communicate clearly with Chinese manufacturers. Communication by Chinese manufacturers is also often inhibited due to limited knowledge of English or inherent cultural norms that they cannot freely express opinions, information and feedback.
Communication barriers become more complicated when you add freight forwarders to the mix.
When your goal is to achieve better workflow management, optimize your product quality and minimize miscommunication or delays, working with an experienced Chinese sourcing agent is a wise decision.
A purchasing agent can handle all the steps involved in adding a Chinese supplier to your supply chain – from identifying the right manufacturer, handling shipping, negotiating prices, communicating technical specifications and building relationships. This means you don’t need to hire or work with multiple agencies, such as freight forwarders, middlemen, third-party audits or translators, to source products from China. Experienced Chinese sourcing agents provide end-to-end solutions to optimize your supply chain when sourcing from China.