One of the difficulties e-commerce companies encounter when buying products from China will be identifying a proper provider for their unique needs. While it is simple to locate a list of various suppliers on GlobalSources.com and also a few other B2B websites, choosing the appropriate firm for you takes a little time, effort, and some upfront work.
Only you, as a private labeller, know what supplier type is best for you depending on your specific situation. It is helpful to establish your ideal source before you start looking for vendors online or at a trade fair. This preparation can save you time throughout the process of supplier selection since you can swiftly dismiss prospects who do not fulfil your criteria.
The following are the few different types of suppliers and the key criteria that you must look at while defining and also selecting your right supplier. You can also find many Chinese sourcing services that are run by a few westerners as well as local Chinese who can speak English quite well and can help you.
Before you begin sourcing suppliers, you must first select if you prefer to go factory direct, source from a specific trading firm, or use the help of Chinese sourcing services such as just mentioned above.
Let us now take a closer look at the following 3 types of companies and learn more about them.
You may call a manufacturer to those companies that have the factory to make the product. There are a few pros and also cons of this option.
When you buy directly from the factory, you can get better prices, and also you can further negotiate for lower prices as your volume grows by taking the help of your Chinese sourcing services agents.
Making changes to your product will be more efficient because you have the opportunity of communicating directly with the manufacturer and its engineers.
Because there will be plenty of communication involved, it can take longer. Communication and decision-making are also slowed by the time difference.
Another concern is the language barrier. Some factories struggle to communicate with international consumers. Almost every supplier will have English-speaking salespeople, but the quality of their English will vary.
In general, suppliers in Guangdong’s southern province have greater English skills compared to suppliers in Fujian, Zhejiang, or a few more inland provinces.
A few factories won’t take small orders because of low MOQ, or they won’t modify the product for a little order. If you are just getting started, you might want to consider sourcing from some different sources.
- Trading companies
Trading companies typically buy products from different factories and sell them to importers. Usually, they may have inventory on hand or order things from manufacturers when needed.
Manufacturers may have their factories for specific products and trade in with other product categories. A few trading companies may have made an investment in a plant or perhaps own one.
Trading companies might sometimes provide superior service. They might be better also at marketing and have better English skills.
Because they purchase products in large quantities from factories, stock them, and sell to various importers, trading companies may also have lower Minimum Order Quantities for typical no-brand products.
They may have a greater selection of items and launch any new products more frequently because they partner with different factories.
Since the trading company can also add its profit, you may end up paying a greater price for your product in some situations. However, since they have a good tie-up with the factory and are ordering higher volumes, any well-established trading company may be able to get a reduced price from the concerned factory.
If your product has to be customized, communicating your needs to the factory through the trading company will be more difficult, particularly if it is a complex product and your trading company contact does not fully understand the product.
Ultimately, whether you prefer to source from any manufacturer or any trading firm, you want them to be open and honest with you, and also tell you whether they create the goods you are searching for.
- Contract manufacturing
The term “contract manufacturer” was coined 20 years ago, and the term “global manufacturing” was born. Many examples abound, mostly mentioning worldwide brands that shifted manufacturing chains.
The word “job shop” conjures up images of a low-volume, high-mix fabrication activity that is often domestic and low-value. In a constant ask-bid-quote cycle with larger OEMs who often are looking for the lowest price, the owners may compete with a few other similar firms.
It is difficult to grow a business or offer value to their customers who regard your services as a commodity.
Traditionally, contract manufacturing was described as one factory producing a product for the other. Produce it, transport it, and you are done. For a long time, that strategy worked, but now the goal is to turn contract manufacturers into valued suppliers.
Outsourcing is frequently used interchangeably with contract manufacturing that is not necessarily accurate. Regardless, it has taken on a negative connotation for some.
Contract manufacturing is just a method of establishing a working relationship between two businesses. One company manufactures unique parts or even other products on behalf of the clients as only a part of the arrangement.
In most circumstances, the manufacturer also takes care of the client’s ordering and shipping. The client, as a result, is relieved of the responsibility of maintaining manufacturing facilities, purchasing raw materials, and hiring workers to make the finished goods.
‘Local contract manufacturers,’ as they are known, create complicated electronics, critical-to-function components, sub-assemblies, and other finished goods. It takes a lot of inventiveness to manage a certain supply chain from a long distance away than it does to manage one just across the street.
Logistics, long lead times, vendor-managed inventory, warehousing, cross-docking, port-specific tax credits, and blanket release purchase orders are a few distinctions between any local contract manufacturer or a truly global manufacturing suppluer.
You may also take the help of Chinese sourcing services while dealing with your contract manufacturer.
These are among the characteristics that will assist you in identifying the best supplier for your needs. Once you have narrowed down your desired supplier, go to a supplier database like GlobalSources.com and start looking for your goods.
Then, to cut down search results, apply on-page filters depending on your selected criteria, and contact just those suppliers who fulfil the majority of your specified requirements.