Sourcing Chinese Manufacturers: A HUGE List of Do's and Don'ts
This post is a comprehensive list of do’s and don’ts when importing from China. Basic guidelines from experience living and working here. While we've written articles, ebooks, guides, and posts about many of these list items, the point of this post is to provide a concise, at-a-glance list of what to do vs. what not to do when sourcing Chinese manufacturers. If you want more details on each, make sure to head to our blog page!
Check them out and then contribute your own do’s and don’ts of sourcing Chinese manufacturers when importing from China on the Guided Imports Facebook group!
- Always be identifying as many suppliers as you can when you plan to buy from China
- Speaking simply and clearly with your Chinese counterparts is essential
- Use bullet points and clear language in emails to suppliers. No idioms or other colloquialisms
- Don't make the final payment to the supplier until you have inspected your product
- Inspect EVERY production before it leaves China--even from suppliers you've used multiple times. We've seen far too many mistakes made as soon as the customer stops inspecting production
- Eliminate suppliers that are giving you the slightest hint of being unreliable
- Contacting suppliers through B2B sites they pay for, versus contacting them directly is usually the fastest way to get a response
- Be wary when you hear silence from your supplier after you've asked a question. The word "no" isn't in their vocabulary, so often times silence will signal a "no"....but then it's usually followed by a "yes". This usually signals trouble. It's one of the cultural idiosyncrasies you need to pay attention to. Closely.
- Generating rapport with the sales people helps spark the relationship -- and good business is driven by relationships in China
- Get in the habit of checking Intellectual Property rights. You can use Google Patents and the USPTO for your initial patent and trademark searches. There’s also a very helpful list to aid you in your quest that was created by the USPTO. It’s your responsibility to ensure you’re not infringing on IP!
- When importing from China, ordering samples is a requirement--and not just one, but 5-10. You need an accurate representation
- Always strive to be negotiating fairly -- and if you ever feel like you’re getting too better of a deal from a China supplier you’re probably about to get screwed. They will find a way to recoup the profits (cheaper materials, price increase, etc)
- When you buy from China, you should be working with suppliers who see your orders, regardless of size, as important
- Resolve all concerns BEFORE ordering from suppliers. Ordering with concerns left unaddressed is recipe for disaster
- Find suppliers who can add value to your business, like For starters, negotiating better terms is a better strategy than focusing on price
- Suppliers who are innovating and constantly developing their own designs make ideal partners
- Getting a factory audit is rarely a bad idea prior to first orders. Services like Examine China can help.
- Relationships are very important in Chinese business culture. Start building them on every email, call, and transaction with suppliers.
- If at all possible, visit your supplier in person. The best buyer-supplier relationships are the ones that have an element of face-to-face interaction.
- Know which regions in China specialize in which type of products. There is a reason they cluster together.
- Plan for delays in production. Small delays happen very often in factories. Be ready for them.
- Searching “scam” on Google and Bing along with the name of a supplier is a quick, sometimes successful hack to weed out the bad guys
- Using a courier to pick up product samples and cross reference a factory’s address with the one on file helps eliminate middlemen
- You should be requiring the legal business owner of your supplier to sign all written contracts and purchase agreements
- Your purchase agreements should be in English AND Chinese.
- You should also be requiring the company chop (stamp) before any production is begun
- Check quality during the production phase of your first production, using a third party quality control inspector is ideal and much less expensive than inspecting them yourself REPEATEDLY
- Placing more importance on product quality than price is essential to going pro and owning your niche
- Trust Global Sources more than Alibaba, as the vetting process for listed suppliers is more strict with Global Sources.
- Knowing the exact materials and specifications prior to ordering saves you from being marked a newbie and ensures better quality since a comprehensive spec sheet eliminates the opportunity for supplier to "fill in the blanks" on unspecified production details
- Become an expert on the manufacturing process of your product. Find out how it's made. You will be surprised at how much better your product quality, price, and supplier relationship will be once you do this. Google is a great place to search for videos on this.
- Requiring your supplier to sign an NDA if they are producing a new product for you is best practice
- Make sure you are ordering only after all fees have been discovered and itemized. This includes customs fees, shipping, duties, and any compliance certifications required
- Make every effort to have a Mandarin-speaking person on your team, as production details are often lost in translation, which makes for a much longer and more expensive endeavor!
- If you are feeling unsure about a product's certifications, contact a licensed customs broker as well as the governing body that dictates the requirements in your product's niche
- Keep current on exchange rates to help you decide if it's more cost-effective to pay your invoice in RMB vs USD. This has been known to save hundreds of dollars per order, given the right situation
- On new orders, make sure to tell your supplier you want the price for a plain white/brown box. China sometimes places abnormally high prices for products that come with fancy packaging. You don't need it for your first order.
- Make sure to check the cost of having packaging made somewhere else other than your supplier. Often times this can save money if you find a good packaging factory.
- Attend the Canton Fair and/or the Global Sources Exhibits if you can. Some great factories in China are NOT listed on any of the directory websites like Alibaba, Global Sources, etc.
- Engaging with suppliers whose email domains include @QQ.com, @yahoo.com.cn, or @163.com is usually a red flag
- Working with suppliers who are late in communicating is a sign that your production will be completed late too
- work with suppliers who are constantly sending out marketing emails
- Pay with Paypal, if you can avoid it. It automatically flags you as a newbie, and most suppliers HATE Paypal (too high of fees, requires account setup that often doesn't match corporate officers, forces them to change their customs for someone else). Bank Wire is the accepted form of payment and there should be ZERO problems with it if you've properly vetted your suppliers.
- Don't tell a supplier that you plan to place a bigger order on the next one if they agree to manufacture this low M.O.Q. test order. This used to work, but now suppliers have heard this so often, it usually does more harm than good.
- You should not be working with suppliers whose invoice and website names don’t match up when you buy from China
- Identifying yourself as a small company is more acceptable than it used to be. However, DO NOT come across as “new” or uneducated about your product or there will be problems.
- Failing to ask lots of questions of your supplier could lead to a bad production
- When importing from China, never work with suppliers who are clearly acting like “yes men”. But be aware that telling a customer "yes' to any and all requests is a Chinese cultural norm, to some extent. It would be beneficial if you started to ask questions if you think the "yes" came too easy, or are greeted with a moment of silence after your question.
- Assuming a supplier is reliable just because they are displaying an Alibaba Gold account is a rookie mistake. Those “Alibaba Gold” designations are for sale
- Drafting lengthy introduction emails is a huge waste of your time. Keep it simple and only include the name and description of the wanted product. In bold create a clear call to action, telling the supplier to get in contact if they want to know more about your needs.
- Assuming a factory needs to be big to do a good job is a Western mindset
- When in China, it is customary to trade business cards with suppliers/representatives using both hands and with a certain amount of reverence. Bow slightly when handing your card to them using 2 hands. When they give theirs to you, receive it with 2 hands and take the time to really look at before putting it away.
- Assume that the supplier who quoted you a lower price is on the same page as you. Order samples to ensure the product they make is the one you want.
- Working with suppliers who send pricing via email or text messenger is a newbie mistake. Only use suppliers who provide you with detailed quotes including all specifications and terms spelled out
- Assuming a factory’s posted MOQ is non-negotiable can cost you thousands of dollars.
- Never be afraid to work with a trading company, especially if your order quantities are low or your needs are greater than what an average factory is capable of handling
- Entering production without a direct phone number, WeChat or Skype ID of a factory manager or representative can potentially limit your success.
- Using a supplier with a registered capital of 100,000 RMB or less is a bad idea when you buy from China
- If you're importing from China don't forget that the numerous Chinese holidays may explain any delays in supplier communication.
- Be surprised when your supplier wants to renegotiate "conditions", as Chinese see a purchase agreement as a starting point.
- Forgetting that the numerous Chinese holidays explain a delay in communication can cause relationships to sour. Know your Chinese holidays!
- Bringing a Western mindset to a Chinese business transaction is a terrible practice. Take some time to learn about the Chinese practices and you’ll save thousands of dollars long-term.
Keep the suggestions coming!
If you're importing from China and sourcing Chinese manufacturers, we encourage your to add your ideas to this list on our Facebook group page! I'm 100% certain there are people who have more to add regarding their experiences. Keep in mind, that this list is based on years of experience of living here and seeing/doing these things (as well as the effects) daily. Therefore it should be fairly accurate and applicable to most situations.
Sourcing Chinese Manufacturers: Things Change
There will always be outliers and one-offs that prove to be the exception to the "rules". Such is life. But overall this list represents the best available data at this time. But as does everything in China; things change. We'll update this list to reflect the current trends and outcomes to ensure it stays relevant. Many things that used to be in the "Do" column, now fall under the "Don't" column--that's how much things can change here!
For example, not long ago it would be advised to tell suppliers you're bigger than you really are, because size = power in China. Now, it's far better not to lie to a supplier, because when they find out, bad things will start to happen. Another thing that changed is along these same lines: it used to be common for people looking to order "test" orders or lower MOQ's, to tell the supplier in their email that they just need them to help them with this small test order, then on the next order they will order a very big quantity.....or they tell the supplier they will have their business for a long time if they can just help them with this smaller order. Since we have some former supplier managers working at Guided Imports, they told us that almost 100% of all emails contain a line like this! Suppliers now react very adversely when they see this and it starts the relationship off on the wrong foot--in a place where relationships and trust are the most important factors when looking to do business with another company long-term.