Sourcing Goods and Suppliers in China:
Horace Greeley, the famous early American newspaper editor and founder of the New York Tribune in the mid-1800s, famously responded to the question of how to become rich with the statement “Go West, young man!” The same advice is often slightly reformulated and given today as “Go East, young entrepreneur!” Although people today can argue about the correct direction to go to China from the United States, the essence of the statement still holds true today!
Many
people predict that China will be the largest economy in the world in the 21st
century and will soon surpass the United States. Although the relative cost of
manufacturing in China has risen in recent years, the country is still often
the cheapest location for American retailers and manufacturers to source goods
or parts.
This
article is first in a series exploring how U.S. companies can source goods in
China, and it focuses on how those companies that cannot afford to establish
overseas offices or manufacturing operations can effectively and efficiently
source suppliers in China. We will focus on how a smaller U.S. company can and
should go about locating suppliers in China.
Internet Search
The
easiest and most cost-effective place to start a search for suppliers in China
is on the Internet via search engines such as Bing or Google, and B2B sourcing
platforms like Alibaba, Global Sources, and Made-in-China.com. Thousands of
suppliers are listed on these sites, and you can streamline your search and
increase the number of legitimate sources by filtering results for only those
entries labeled as “gold member,” “verified supplier,” “onsite supplier,” or
“accredited supplier.” Good reviews offer some indication that the supplier is
legitimate. Some B2B sourcing platforms have endorsed service provider lists
and supplier blacklists. For example, Alibaba has a list of banned members.
Some
sites also offer special services to further protect buyers. For example,
Global Sources has credit-check services and supplier-capability-assessment
services that will provide suppliers’ key business information including
company status, production capabilities, and product quality.
Be
aware that verified suppliers at these sites may only mean that the companies
are verified to exist; it does not necessarily mean that their reputation,
production capability, or quality has been verified (for example, a gold member
at Alibaba is a paid status). Further, while these sites have large directories
of “suppliers,” some are simply traders or wholesalers, not manufacturers. You
won’t get the best price from traders or wholesalers, so you need to do your
own diligence on potential suppliers.
It is
worth mentioning that Global Sources also has China Sourcing Reports (CSRs)
that have in-depth studies focused on specific sourcing industries in China. In
the CSR, you can find qualified suppliers and their verified contact
information. This report also provides industry overviews, top-selling
products, and other pricing and market information, although such information
may not always be up-to-date.
Social Media
Social
media is not necessarily an ideal platform to identify suppliers. Only some
suppliers have a social media presence, but they can be a good source for
feedback or reviews of potential suppliers. Therefore, be cautious when relying
on such platforms and remember to do your own due diligence as the information
provided is often unverified, reviews are often anecdotal, and sample sizes may
be small.
Also,
there are now many professional LinkedIn groups focused on sourcing in China:
•China
Sourcing
•China
Sourcing Forum
•China
Sourcing, Networking, Import, Export, Trading, Manufacturing
•China
Sourcing Group
•China
Trade Group
In
addition, some forums such as the Alibaba forum, Smart China Sourcing at Global
Sources, and China Sourcing Blog offer good tips. Finally, be sure to check on
any complaints other people may have shared at Ripoff Report
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