5 things to consider when looking for a China Home Storage Manufacturer
Knowing the truth about any China Home Storage Manufacturer you want to work with is key. Here are some great tips on how to get there.
Despite increasing competition from emerging low-cost supply chain destinations such as Vietnam and Puerto Rico, China’s manufacturing advantages remain solid and compelling. Still, outsourcing production from China can seem complicated and exhausting to novice importers. You will be faced with choices that you must consider carefully and carefully find the right outsourcing partner. The following are the most important considerations when exploring and screening Chinese suppliers.
1. The real identity of the supplier
You found a supplier on Alibaba that makes the product you want to sell on Amazon. The conversation has started and you think that if sales are good, you will continue to import from this company. Representatives of the company speak fluent English and will tell you that they work with many sellers in western countries.
You are ready to order samples and have discussed drafting a contract with your legal counsel. Everything seems to be checking, why wait?
One thing you haven’t confirmed: whether the supplier is a trading company or a China Home Storage Manufacturer. Adding more layers to procurement can lead to increased costs. Middlemen do not have the ability to customize products, and many profit by labeling products. Their only goal may be to match you with China Home Storage Manufacturers who can increase your profits, not to find you a good deal.
How to spot a middleman
1. You should ask the company directly for their identity or if they offer a paid service and if this is separate from the cost of production.
The company may tell you that they have a close relationship with the factory. But will they give you the address of the factory so you can contact the actual supplier? Also ask how the company makes a profit. The convincing response and any resistance from the company’s side shows that they are just matching your needs with the Chinese factory and not providing more value.
2. The trading company has an English website and shrewd marketing skills. They often have a hard time answering technical questions about your product.
3. It is easier to get lower MOQ from trading companies instead of factories.
4. Ask for the company’s ownership documents – as they may have other partners taking a cut of the profits.
The middleman can send you a great sample and take you to a factory that looks great. But they may have ready-made samples, and once you place an order, they will move to another factory to produce your product at a lower cost. As a protection, you should specify that the factory cannot be changed without your approval, and hold them accountable for the terms that protect you. Unless you have a good reason to try a middleman’s service, such as a lower MOQ or a test product in the niche you’re exploring, you’re better off working with the China Home Storage Manufacturer.
2. Basic information of China Home Storage Manufacturer
Conduct background checks on suppliers and ask them to provide information that will guarantee their reputation. Include the following steps in your supplier review process:
1. Compare company profiles on Alibaba, Made in China, Global Sources, and other directories, and check that their locations, addresses, phone numbers, and other identifiable information are the same on all of these sites.
2. If the supplier has participated in trade shows such as the Canton Fair, this is an encouraging sign. Search the vendor name in the exhibitor list on the show website.
3. Read customer reviews of suppliers on online catalogs. Also check out their reviews on Google and Baidu.
4. Ask for basic information, which should include the following:
- the number of employees in their facility
- Main product lines
- What are manufactured in-house and whether they subcontract any processes
- Sales in domestic and export markets
- How many Western importers do they work with, or are their buyers mainly in Asia, Africa and the Middle East?
- If they are familiar with the safety and product regulations that apply to your product
Well-established suppliers will give you satisfactory answers to these questions. If the supplier doesn’t answer clearly, or you suspect they’re just telling you what you want to hear, they’re probably not the partner you need.
3. Documents and Certifications from China Home Storage Manufacturer
While your suppliers do not need to have considerable experience exporting to the US or Europe, it can make the relationship smoother as they will be familiar with your requirements. Suppliers will know that you need them to do due diligence and maintain a cooperative hout process throughout. They will provide the information and documents you need to verify that everything has been signed for.
China Home Storage Manufacturers with many customers in western countries will have the ability and ability to fulfill large orders. You’re unlikely to have issues related to quality or overall service, as the company needs to maintain its reputation in front of global buyers.
In the case of commercial documents, the necessary checks are performed by requesting specific documents from the supplier. Vendors may give you false documents, so you must be careful and verify their authenticity.
Copies of documents requested from China Home Storage Manufacturer
- Business license, an 18-digit license number, confirming that the company is a legal entity in mainland China.
- Proof of bank account to ensure you are making payments to a business account and not a personal or offshore account.
- ISO 9001 certificate. This is the document that ensures that the China Home Storage Manufacturer has a quality management system that meets the requirements of international standards.
- Foreign trade registration certificate required by China Home Storage Manufacturers directly engaged in import and export activities. This is just a security check to make sure that the supplier does not use the trading company to fulfill your order.
- Customs registration certificate issued by China Customs to importers and exporters who need to declare.
- Test reports that demonstrate that the China Home Storage Manufacturer can produce the product to the standards you require (less than 5% of suppliers are able to provide test reports – the onus of compliance falls on you, as discussed further).
Suppliers should be able to provide at least two documents from the above list: business license and ISO 9001 certificate. The company mentioned on the license should be the same company mentioned in the proforma invoice and email signature.
Check the expiry date of the certificate to see if the scope written on it covers the manufactured product you will be selling. Companies must renew their ISO certificates by submitting a reassessment process. It’s easy to get certified, but much harder to maintain. To maintain certification, companies must demonstrate continuous improvement and proper record keeping. You can always err on the side of caution and contact the registrar to ask if they have accredited the provider. This is a red flag if the supplier frequently changes registered companies.
A note on compliance documents from China Home Storage Manufacturer
Importers are responsible for product certification and safety compliance. For example, if you import toys from China, you need to comply with the Consumer Product Safety Improvement Act (CPSIA) and obtain an ASTM test report, a Children’s Product Certificate (spontaneous), and a laboratory testing program (spontaneous) from an accredited third-party laboratory.
Often Chinese suppliers will never have all the compliance documents you ask for. They may give you an old lab test report, which isn’t enough to rely on. Even if a supplier provides a complete set of documents, who can say if they are sending their own product or another manufacturer’s product for lab testing? Suppliers may use different materials than test samples.
The bottom line is that you must submit samples from your product batch for lab testing. China is home to many international laboratories, including SGS, TUV and Bureau Veritas. Have someone you trust collect the samples, as the supplier may send samples that are not from your batch.
4. The best way to communicate with China Home Storage Manufacturer
Differences in Chinese and Western business cultures can be a pain point in discovery, negotiation, and even later stages of a relationship. If the supplier’s factory manager does not understand your instructions, language barriers can lead to confusion and misunderstandings. China Home Storage Manufacturers may have English-speaking staff, but they are usually not decision makers and may be primarily focused on pleasing and marketing to you.
These problems do not arise when you hire a purchasing agent. The agent is responsible for communication and the entire engagement, from reviewing your product specifications and drawings to sending quotations from relevant suppliers and performing factory audits. They will also send samples, perform in-process quality checks, and handle shipping and customs.
Keep your emails simple: When suppliers respond to your introductory emails, you’ll know how fluent they are in English. They seem to have a good grasp of the language, but they may use an online translator to fully understand you. Not only is this cumbersome for the supplier, but inaccurate translations can lead to confusion and finer details of your message can be lost.
Use short sentences, simple words, and bullet points. If you can, share photos and visuals to communicate your message more clearly. Avoid long email chains.
Follow up by phone or video chat: Check the content of emails with suppliers via Skype, WeChat or QQ. This is desirable regardless of whether the supplier has responded to your email. By checking your requirements, you don’t leave any room for confusion. Since Chinese suppliers are reluctant to ask questions for fear of “losing face”, the follow-up is also an opportunity to discuss key details and encourage suppliers to seek clarification.
Straightforward: State your request directly and decisively. Tell the supplier what your product should look like and what you don’t accept. This will reduce round trips and lead times will not be unnecessarily affected.
Talk to decision makers: Communicate technical specifications to plant managers or English-speaking members of plant employees involved in production. If you need to highlight certain terms or want to know how your order works, it can be helpful to get in touch with those who actually play a role in manufacturing. Suppliers should designate a contact person in their office to answer your calls and emails if direct access to those working at the facility is not possible.
5. Price Negotiation with China Home Storage Manufacturer
The goal of negotiation is to find the best quality-price ratio. Chinese manufacturers are willing to give you a good price if they think you are a good buyer, despite their thin margins. This means that you are not constantly changing buyers and have the intention of building a long-term relationship.
1. Running errands
Compare different suppliers based on price, MOQ, material, packaging, lead time and other factors. Use this data at the negotiating table to tell suppliers the advantages their competitors offer. If another factory offers lower prices and better lead times, you can say it will reduce your risk and allow you to get your product to market faster.
2. Ask China Home Storage Manufacturer to offer the best prices
When you offer a target price, you may be putting yourself in a weak position because your competitors may have negotiated a lower price. Put the ball in the court of suppliers and ask them to share their best pricing for different quantity classes, such as 1,000, 5,000 and 10,000 units.
3. Ask for a lower price from the China Home Storage Manufacturer
If the supplier’s price doesn’t change much, that’s probably their best price. To be sure, you can tell them you’re getting an aggressive price deal. Reiterate your interest in working with them as your supplier because of their quality, customization options, or any advantages they offer. The supplier may give you a better price. Always confirm that the price they say is the final price. If your research tells you that a supplier’s prices are far from their best prices, explicitly ask for better pricing.
Outsourcing production to China is complicated. Seek all help to avoid costly mistakes. A purchasing agent can help you overcome confusion and obstacles while supporting your bottom line and growth.