Ask Me Anything About Product Sourcing and Importing

Nice post, a question, any experience with wine to China or South East Asia?

 

I haven't exported wine, but I know from contacts in China that wine is not very easy to market there. The best way is to find an agent who can handle the extensive marketing and advertising cost to get started.

You could get a free listing on Alibaba to advertise for an agent. Another way would be to contact one of the World Trade Centers in China with your offer.

Walter Hay
Provenchinasourcing

 

Hey Walter, Thanks for the tip. Yeah it's a side project I work on for ultra luxury wine with couple of wineries down in New Zealand. Not easy market indeed but going around to find the agent.

 

Luxury wines are easier to market in China than cheap wines, (although expensive to market), so that's a good choice.

Walter Hay
Provenchinasourcing

 

Need for Backup Suppliers

I have seen too many small importers put their business at risk by relying on only a single supplier. They find a good supplier, settle down happily, and the supplier does the right thing by them.

Then suddenly, something goes wrong! A fire at the supplier's factory - the supplier has cash flow problems - they are taken over by a larger company that only wants their production ability and is not interested in their small customers that the big new owner sees as just a nuisance........

These are just a few of the sudden changes that I have seen over my importing experience spanning nearly 30 years, but the result is always the same - no product to sell, but customers keep ordering!

This worry can be avoided by always being sure you have at least one backup supplier. It's a small effort for the security it gives. If you regularly place a small order with that backup supplier while buying most of your product from your favorite supplier, you will be able to maintain inventory to satisfy your customers when such an emergency as I have described happens to you.

Walter Hay
Provenchinasourcing.com

 

Walter. I noticed that besides importing you also exported products.

Any advice to newbies on exporting to China or other countries?

Is alibaba good for wanna-be-exporters?

Thanks for taking your time to share your knowledge.

Martin

 

Hi Martin,

Exporting is a whole different ball game, but it can still be done if you have patience and the ability to a) source good quality products, and b) negotiate with both the supplier and the Chinese importer.

I mentioned quality, because the growing number of middle class Chinese people have plenty of money to spend and they love to buy western goods, but they look for quality. This is because most of them share the western perception that Chinese made products are inferior. There is also a considerable amount of prestige in saying "This was made in America" (or other western country.)

Although I don't like Alibaba as a source for products to import to the west, it is a very good place to offer goods for sale. You might do better to advertise on Chinese language sites if selling B2C, but for that purpose Aliexpress would be easier for someone with no knowledge of Mandarin.

Many Chinese businesses use Alibaba for sourcing supplies, and if your sales pages identifies your business as being a western one, it will attract buyers. Unfortunately, since Alibaba's rule changes early this year, you will not receive buyer inquiries unless you sign up as a Gold Supplier. The only way around that is to make sure your website address is visible on illustrations. If you just publish it in the text, it will most likely be deleted.

Walter Hay

 

Many people have no idea how the shipping process works when buying from China and shipping the goods to their own countries, so I am posting this very brief guide to help.

There is a big difference between shipping small orders by air courier and shipping large orders by sea. Basically for shipments via air courier you can allow your supplier to send through their usual courier or EMS. The courier service will automatically clear the goods through customs,pay any duty and taxes, and collect them from you before delivering to your door.

For larger shipments, the logistics boil down to this:

• Obtain a quote from the supplier on both an FOB basis and a door to door basis. This applies whether it is a large or small shipment.
• When quoted FOB, you should then contact a local freight forwarder and ask them to quote you door to door. Emphasize that you don't want air courier.
  
• If you decide to accept the supplier's door to door quote, you place the order and the entire process will be done for you until the freight forwarder contacts you to tell you how much duty and tax you must pay, if any.
• Once you pay that, they will deliver to you. If there is nothing to pay, the delivery truck will simply arrive at your door.

There is no need to learn all the complex rules of shipping and customs clearance etc. Freight forwarders also handle the Customs work provided you have a door to door quote but it must include all possible charges. Get the quote in writing.

I would not outsource any part of the process to a service in China. If order value warrants it you can use an international inspection service in China. I will later post details of old-established inspection services that you can rely on.

Regards,
Walter Hay

 

INCREASING DUTY A PROBLEM?
I've been asked if the duty increases proposed by President Trump will affect small importers. Here are a few observations:

• If it happens it will possibly slow down business as customers resist paying the higher prices.
• Customers will slowly get used to having to pay more on imported goods.
• Your competitors will also be paying the new duty, so your competitive position won't change.

Overall, I expect to see a short term slow down in some businesses, but the consumers will adjust. They are too used to buying so many things online that they will most likely soon return to their old ways.

Walter Hay
P.S. Don't forget that you can get reliable answers from a very experienced importer right here. Just ask.

 

Discounts for big orders in China?

Those who think that volume means large discounts have never dealt with Asian manufacturers. Sure they give discounts for larger quantities, but those discounts are usually very small.

I have experience in importing from China since 1987, and I have found that discounts for volume were typically in the 1% to 2% range for doubling the size of an order. Multiply the minimum order quantity by 10 and you might get a discount as high as 10% if you are lucky. Therefore buyers should not expect substantial discounts for volume.

This means that if you can persuade a Chinese manufacturer to supply a small order, (and it can be done) the price will still be low enough to give you a huge profit margin.

Walter Hay
Provenchinasourcing

 

Very useful information thank you very much

 

Dear Walter,


Absolutely loving this thread just what I was looking for and already learnt a great deal from reading you beautiful wisdom. So now my question I would like to ask you, I am currently in the thinking process of starting my own clothing line here in the uk. I would like to find a manufacturer who can follow and create our unique high quality designs and good craftsmanship. Which countries should be looking at ? Would you want to be going to visit factory's before the deal is set up? Would you also have a 2nd and 3rd manufacture lined up just incase I need a back up? Have you ever been involved in something like this ?

Thanks

 

There are many places you could consider to start your clothing line. In view of your location in the UK, I would suggest looking at Eastern European countries, or perhaps Turkey.

In my sourcing book I emphasise the desirability of having back up suppliers, but clothing is a special case. If you are establishing a clothing brand there will be so much work involved before you get to produce your first garments that it would be impractical to repeat that with a second manufacturer just in case.

This means you will need to put extra effort into choosing the supplier. For this reason a visit would be a good idea. Before visiting you should locate several potential suppliers and communicate extensively with then before visiting the most promising ones.

Don't forget to take into account the benefits of high quality labelling. If you look at my labelling website you will at least get some ideas on what is possible in that regard.

Walter Hay

 

Hello my friend,
I would like to know if in your ebook there is specific instructions and websites on locating suppliers and if so where can i buy your ebook.
I apologize for my english, i'm nor a native speaker

 

My book is a do it yourself guide. It gives instructions on how to safely use the various B2B websites, including pages of information on assessing suppliers. It also lists more than 20 other countries in addition to China and shows how to source products from those countries too.

It does not give you a list of suppliers, but you will find them when you go to the B2B sourcing sites I refer to in my book.

There are people who will sell you a list, and I have seen some of them. Most of those I have seen in the lists are not manufacturers even though they claim to be the actual manufacturer of the product they are selling. They are traders and you will not get the best price from them because they buy from the manufacturers and add a big margin before they sell to you. My book shows you how to know who is genuine.

You can see my book here: https://provenchinasourcing.com/ where it tells you what it deals with.

Walter Hay