10 most common problems about sourcing from China you may not have known
China is regarded as the world’s leading manufacturer of consumable products. As a matter of fact, China produces 27% of global products. Truth is, not everyone is cut out for the challenges involved in sourcing from China. In this article today, we are going to share the 10 most common problems about sourcing from China you may not have known.
Brace up for the revealing piece.
1. Supplier sourcing problem
It all starts here. Apparently, for any importer to source any item from China, you must first source for suppliers. Given that many Chinese suppliers are fake and are out online to defraud unsuspecting importers, it is difficult to source legit suppliers. There are licenses and permits given by the Chinese government to manufacturers and businesses. Many amateur importers do not know this. Also, sometimes, these fake suppliers present fake licenses and again, some importers fall for it.
2. Supplier verification problem
This is a similar problem close to the first and it has caused a lot of importers money, time and sweat. There is a huge problem of verifying which supplier is legit online. Considering that many importers do their transaction online, it is difficult to know which supplier has the necessary license and permit to carry out the supply. If you fail to verify the supplier, it is a very big risk that may jeopardize your sourcing process. We showed importers how to verify suppliers in our Alibaba Supplier Verification Guidebook. This eBook is free but only made available if you purchased our Verified Suppliers List. You can purchase it here.
3. Communication Problem
The Chinese suppliers are mostly native Mandarin speaking people. Considering that many importers want to communicate in English, this is a huge challenge for sourcing. The communication barrier affects importers because they cannot speak or type Mandarin on one hand, and suppliers find it difficult to communicate in English on the other hand. The solution to this is to employ the services of a procurement agent who has territorial knowledge of the Chinese market. Naiyuan Mart is a procurement company based in both China and Nigeria that can help you communicate and source for you even though your supplier doesn’t or can’t speak english. Reach out to us here.
4. Substandard quality problem
China is usually associated with fake quality products and this is a critical fear of many importers. When sourcing from China, importers need to know that there are quality grades of products. Not asking about this is a risk because Chinese suppliers will assure you all is fine or work with your budget only for you to find out that your product is of inferior quality compared to what obtains in the market.
5. Focusing only on pricing
Many importers focus only on pricing when sourcing from China. While low prices may be a good bait, it is not always associated with quality. Low prices do not always equal high quality. This is a common problem importers make with sourcing.
6. Doing it all alone
Many importers think they want to save cost by doing it all alone. Ordering alone, communicating alone, verifying alone etc. The process of sourcing needs to be monitored and handled by a professional. Trying to do it all alone and not involving professionals like procurement agent, legal practitioner, quality assurance specialist etc. is synonymous to calling for a sourcing disaster.
7. Negotiation problem
This is another common problem with sourcing. A lot of importers do not know how to negotiate properly with Chinese suppliers. Also, the few who tend to do it, over negotiate to a point where it jeopardizes the quality standard of the supply. While it is good to negotiate, especially when you are buying in bulk, it is also important to consider that the supplier needs to make profit and if you overdo this, it is putting your sourcing at risk.
8. Payment problem
Chinese suppliers want to get paid in either Yuan or RMB. Many importers don’t have access to this and this affects their sourcing because the accessibility to the local currency is limited. The solution to this is using a trusted procurement company like Naiyuan Mart to pay your Chinese suppliers in Yuan/RMB while you pay the equivalent in naira to the Nigerian bank account of Niayuan Mart. Find out more here.
9. Quality inspection problem
Importing is more than just placing orders alone. To get the best out of sourcing, there are other processes that are as important as sourcing itself. And this can only be done by professionals. When sourcing from China, not inspecting quality before your products leave the supplier is a risk. Not carrying out a due diligence task on your supplies can waste a lot of time, money and effort.
10. Lack of contract agreement
If you are buying in bulk, or going into private label manufacturing, and you don’t have a smart contract to protect your interest and the terms of the business, it is a huge problem. No matter how relaxing the Chinese suppliers have made you or how assured the communication is, without a smart contract, it is a huge risk. We have put together a Contract agreement template for importers. This template is free but only made available if you purchase the Verified Suppliers List. Get it here
Now that you have understood the most common sourcing problems, it is very important to take them into consideration and avoid them in your next sourcing activity.
Other resources:
Verified Suppliers List- This list is designed to help you 10x accelerate your PLM journey by saving you the time, money, energy needed to start looking for and verifying suppliers. We have done all the work for you by putting together the list of verified Chinese suppliers in different industries. The list is not free, because it took us a lot of time and other resources to find these verified suppliers to commit. You need this list to find you a manufacturer for your products. All you need to do is order for the list here.
Private Label Manufacturing Guide: This guide is a comprehensive step-by-step approach to help you get started with Private Label Manufacturing. It is a free guide but only made available to you as a bonus if you ordered the verified suppliers list.
Contract Template- A contract template is a legal agreement between you and your supplier. Again, this is necessary to make sure that your business transaction is protected on both ends. You can download the template here.
Expert Importation Guidebook- This is a starter guide to help you if you are a new importer. This free eBook is designed to take you from a beginner to pro level. Get it for free here.
https://naiyuanmart.com/5-qualities-the-best-people-in-the-sourcing-industry-have/
https://naiyuanmart.com/what-not-to-do-in-the-importation-industry/
https://naiyuanmart.com/5-reasons-why-you-may-not-find-some-chinese-suppliers-online/