Many wannabe entrepreneurs and young importers are tempted to start importing from China by purchasing goods from chinese manufacturers. With the growth of market places such as Amazon, the space of ecommerce has never been so big.
Yet, most of the consummer goods are still produced in Asia and more particularly produced in China. For those who are on their first experiment to try to buy in China to import in their own countries and sell to consummer, you will find below a “Do and Don’t” when starting purchasing in China.
Don’t when buying or purchasing in China
- Trust blind what Chinese manufacturers tell you
If you have chance to spent several years in China you may actually found out that many people are supplying unreliable information. Whatever you ask your way to go from a point A to a point B, require a specification, ask a pricing, try to understand how a product is manufactured or with which components.
Some vendors may tell you their product is manufactured this or this way using this or this components or process, but if you check by yourself you may find out that this is inacurrate or sometimes even totally wrong.
Some vendors also claim they manufacture some products by themselves whereas they actually don’t but sub-contract the prouction.
Trust only what you can see and verify and if you can not do it yourself, then send a trustfull people to verify, someone with common sense.
- Forget to perform due dilligence on your vendor
If you are about to place order to a chinese manufacturer, then it means you will have to make a payment. Often, a 30-50% deposit is required and since your order may not be small (let’s say 10 000 or 20 000 USD at first), those deposit are still significant.
You may find many vendors online via B2B platform such as Alibaba or Made in China, but which one is genuine, which one is capable to produce your product properly etc… you really don’t know at the beginning. For this reason, a due dilligence can be a good idea to avoid and reduce risk related to get scammed or to send money to the wrong vendor.
There are mostly two ways to assess properly a chinese vendor.
– Perform a chinese manufacturer evaluation by yourself (this is what I usually do because I like to have a proper view and understanding of how a manufacturer work and it allows me to anticipate issues and difficulties related to the manufacturing process)
– Send an inspection company to audit a supplier in China. I personnally use an inspection company specialized in audit named Asia Quality Control to do so when I don’t have time to go onsite myself. The price usually start at USD 288 per man§day which is rather affordable face to the risk diminition it provide.
Once done, you will get a pretty good idea of who you are going to work with and then you can mitigate the risk
- Accept a simple Purchase Order as contract%