Why Choose to Souring from a Chinese Home Storage Supplier?
Today’s business world is defined by globalization trends that require cross-cultural and cross-border interactions between countries. With the rise of technology and the implementation of trade-friendly policies, companies are now entering global markets with new products or profitable supply chain networks. A typical example is companies that are now sourcing supplies across borders.
The trade war between the U.S. and China may be pushing many companies out of China as tariff rates rise sharply. But in the face of such economic turmoil, China’s status as a global manufacturing powerhouse has not been shaken much. Companies of all types and sizes look to China as their sourcing hub and ultimately seek the services of sourcing agents in China.
Let us walk you through a few reasons why this populous Asian country is a lucrative sourcing destination for multinational corporations:
Broad Chinese Home Storage Supplier Base
China is one of the Asian countries where Western companies can find a vast network of Chinese Home Storage Suppliers. These Chinese Home Storage Suppliers import raw materials or sub-assemblies of different products and then hand them over to manufacturers, who turn them into finished products ready for retail sale. This is why manufacturers of textiles, apparel, premium skincare, electronics, automobiles, toys, tableware and machinery can save a lot of money by establishing supply chains in China.
There are many trading companies and purchasing agents in China capable of bridging the linguistic and cultural differences between overseas buyers and Chinese suppliers. Whether you are in the US, UK, or anywhere in the world, working with these people can prove very useful in reducing your overall costs.
Low Production Cost
From small to large, several provinces in China are dotted with manufacturing units, which greatly contribute to China’s reputation as a global production center. The country is known for its strong infrastructure such as roads, air, rail, ports and bridges – all of which make the transport of goods extremely easy and convenient.
Given the well-established infrastructure, buyers can save a lot of time and cost – which is reflected in the final price of their products. Not to be overlooked, China also has a huge labor market that provides efficient and skilled workers for different industries here. It is clear that this combination of competitive labor costs and efficient transportation has resulted in lower overall production costs. This naturally makes China a clear choice as a sourcing destination for multinational companies.
It’s hard to deny that China is one of the most technologically advanced countries in the world. Given the country’s strong technological capabilities, mass production of goods here is very possible. All factories in China are equipped with state-of-the-art equipment and tools, increasing efficiency and productivity while reducing overall production costs in general.
In supply chain management, China has deployed artificial intelligence (AI), cloud computing and other modern technologies. These technologies have brought huge innovations in the supply chain space and positioned the country as a leading sourcing hub for major global companies.
China has a lot of Chinese Home Storage Suppliers, importing raw materials and components from other countries. This also happens at the secondary level when smaller companies source the required components from other manufacturing units in the country. This is how factories benefit from each other; by providing each other with the materials they need, they ultimately save each other time and effort. Chinese sourcing agents have connections to all of these Chinese Home Storage Suppliers and manufacturers – which has proven to be very beneficial for multinationals over time.
Even if Chinese Home Storage Suppliers have to import materials from other countries, they usually do so in large quantities, which helps reduce overall production costs. Therefore, enterprises sourcing from China can save a lot of production costs and enjoy the convenience of off-site production in China. Production costs can be further reduced if steps are taken to reduce unit costs, such as using durable and affordable packaging and following product designs that are easy to produce.
Consumers today are more morally and ethically conscious than ever. They often require eco-standard goods, many of which will minimize worrisome carbon footprints. With the rise of the Internet, companies are becoming more and more aware of their social responsibilities. Not only because it’s morally correct, but because even a small oversight can easily get blown up on social media and ultimately damage their reputation. Because of this, procurement teams in China try to keep pace with ecological standards, which in turn helps to properly manage sustainable production and procurement practices.
China has a well-developed export industry, which makes it relatively easy to identify Chinese Home Storage Suppliers and manufacturers that adhere to international compliance standards. Unlike most Asian countries such as Indonesia and Vietnam, workers in China are not allowed to strike and disrupt production chains. The government ensures that every worker in China receives the best working conditions for them. In addition, the government has instilled an anti-pollution crackdown, increasing green investment in the country. This makes China an ideal destination for sustainable manufacturing and sourcing.
Speed of service is undoubtedly one of the major deal breakers in the supply chain space. While being quick has its benefits, be careful about missing details due to haste, as it is certainly not advisable to overlook something and end up quickly sourcing the wrong product. There is always a need to unlock profitability by making the purchasing process more demand-driven and aligned with consumer preferences. Doing so can reduce inventory-related issues and increase your company’s return on investment. Due to the long history of production in China, it is easier to find Chinese Home Storage Suppliers with fast production facilities than in most other countries.
An excellent way to speed up production is nearshoring, which means bringing production units closer geographically to key markets. Interestingly, consumption centers are now more oriental now. As a result, companies from all walks of life – apparel, textiles, technology, automotive, etc., now see China as their near-shore location.
Tips for Maintaining A Healthy Chinese Supply Chain
The above points clearly show that China has a solid foundation to secure huge sourcing opportunities for global companies. When it comes to total supply chain solutions, companies can rely on China’s low cost, workforce maturity and talent pool. That’s why businesses should develop a wholesale sourcing strategy in China to help their businesses reach new heights of success.
However, building a Chinese supply chain from another country is not always easy. If you are in the US, you will most likely have to live with the effects of the US-China trade war. Your business will not be entirely immune to the increased volatility of tariffs that is a direct result of the economic conflict between the two superpowers. Now more than ever, there is a need to seek guidance when sourcing materials from China and ensure the right steps are taken to avoid future complications.
Here are some tips for maintaining China’s supply chain.
1. Get in Touch with A Reliable Chinese Sourcing Agent
Given the large Chinese Home Storage Supplier base, many have started sourcing operations to help foreign businesses. These sourcing agents play an important role in bridging the gap between Chinese material buyers and Chinese Home Storage Suppliers/manufacturers. Due to a large number of Chinese Home Storage Suppliers and manufacturers in China, an unqualified overseas businessman is not always able to identify and make deals with Chinese Home Storage Suppliers. This is where an experienced Chinese sourcing agent can help them.
Chinese sourcing agents have a solid network of Chinese Home Storage Suppliers and manufacturers in the country. They are responsible for identifying Chinese Home Storage Suppliers based on customer needs. They can oversee the production process until the order is shipped to the customer’s destination. They can save business time and money by eliminating the hassle of visiting each Chinese Home Storage Supplier in person. However, it is important to identify sourcing agents who have a proven track record in China and have detailed knowledge of the entire supply chain.
An important point to mention here is the shipping quote. When working with a Chinese sourcing agent, you should give them at least one week to respond to your request for a quotation. You should compare several offers, if possible, before making a final decision. This way, you have a better chance of finding cost-effective Chinese Home Storage Suppliers in China.
2. Declare The Correct Shipping Value
Getting in touch with a reliable purchasing agent in China is not always enough. It is also unwise to rely solely on personal knowledge and experience. As an importer, you also need to be aware of the complexities of supply chain processes. One of the most important aspects to consider when importing from China is the shipping value. If an inaccurate value of goods is discovered during customs inspections, hefty fines can result.
Once customs officers discover the value of the misdeclared goods, you may be banned from further importation and, more commonly, you will have to pay hefty fines or associated costs. Ultimately, this increases your shipping costs. Avoid this costly mistake and make sure your declared shipment value is accurate. This way, you can maintain a smooth supply chain in China.
3. Focus on Quality Control
You may have acquired a purchasing agent in China who is responsible for monitoring the production process. However, it is best if you are also actively involved in the process. First, you need to make sure you are working with the right factory in China. The manufacturing unit should assure you that you will get what you pay for.
From the outset, you should provide your Chinese Home Storage Suppliers with clear product specifications so they can properly communicate to the factory. After production, you will need to request a quality control report to ensure the final product meets your specifications. It’s not uncommon for you to find inconsistent product quality from batch to batch, or a product that deviates from the original sample. In either case, you must ensure that the product leaves the manufacturing cell without such defects.
4. Learn The Language
Many problems in supply chain management with foreign countries are due to language differences between the two parties. When you work with Chinese suppliers, you don’t always find someone who understands English. When such a communication gap arises, it can be difficult to explain your specs to others. This can lead to quality issues, design issues, and lost time, as correcting errors involves double work.
To maintain an efficient supply chain in China, you should consider learning to speak Mandarin to avoid misunderstandings. Even if you are working with a purchasing agent in China, knowing the local language is an added advantage for you. You can understand what they are saying, and you can communicate your own ideas to them more clearly. Before finalizing any deal with a Chinese supplier, consider checking out some online Mandarin courses. It is also important to understand Incoterms, which are standard shipping terms commonly used in international trade. Some examples of these terms include CIF (cost, insurance, and freight), FCA (Free to carrier), EXW (ex-factory), and FOB (free on board).
5. Be Aware of Different Payment Methods
Last but not least, working with a Chinese supplier gives you various Chinese Home Storage Supplier payment options. Depending on the Chinese Home Storage Supplier you work with, you are guaranteed a refund if the Chinese Home Storage Supplier doesn’t comply with your terms and conditions. In some cases, you can request a refund. This will include excessive delays in delivery and differences in quantity and quality. Be sure to understand the different payment methods available to you and the terms and conditions that define your currency transactions.
Most Chinese Home Storage Suppliers accept credit card payments through trusted credit card companies. These companies usually arrange for refunds if the Chinese Home Storage Supplier fails to meet your contract terms and conditions. PayPal and Western Union are two popular payment methods you can consider when working with sourcing agents in China or directly with Chinese Home Storage Suppliers.
Above are some tips to keep in mind when starting and maintaining a supply chain in China. The U.S.-China trade war and the COVID-19 pandemic may have slowed China’s economy, but the country continues to maintain its status as a global manufacturing and sourcing hub. Once you are familiar with the steps involved, you are sure to be part of a well-established supply chain network in Asia that drives your global business. So make sure to develop a robust wholesale sourcing strategy for China and connect with the right Chinese Home Storage Suppliers to take your business to new heights of success.