Tag Archives: China suppliers

How to Import from China Part III

July 21, 2010

Over the last few posts I have been giving readers my thoughts on how to get the best results when and sourcing products from China.

Many readers have asked for my thoughts on a couple of other important aspects of importing goods and products from China namely, how to ensure and maintaining the product quality of the products you order, and what are the major cultural differences when dealing with Chinese manufacturers and suppliers. In this post, I’ll look at the product quality issue.


Ensuring Product Quality

Most Chinese manufacturers and suppliers make a tremendous amount of effort to make sure their products are of a high quality. This ensures that they get repeat business and great customer reviews and high ratings on B2B online marketplaces.

However, sometimes problems do occur. Here are a few tips to make sure that what you ordered is the quality that you expect and that quality is maintained.

  • Don’t get obsessed with the cheapest prices. Often it is a more cost effective option to go with a product that is a little more expensive which is of a higher and verifiable quality.
  • Ask your potential supplier for samples. Even if you have to pay a small fee, this may be a preferable option to making an order for goods of unknown quality.
  • If the sample sent to you is not to your liking, keep persisting until you get the ‘perfect’ sample. By this method you make sure your product specifications are exactly what you want, and it also allows you to define your tolerances and limits. Remember that good quality is also in the suppliers’ interest so this procedure is of mutual benefit.
  • If a Chinese supplier or manufacturer won’t work with you to make sure that the quality of the product is up to the standard you want, then get another supplier.
  • Don’t put all your eggs in one basket! That is, don’t rely on one supplier alone and spread your orders over a number of them. Then if there is a problem, there will be a minimum impact on your business.
  • Make the minimum quantity purchase order from one supplier. Although a vendor may be making a great, ‘too hard to refuse’ offer on product, it’s often best to first not rush into a large order straight away. This also helps with your inventory storage and control.
  • Always perform quality control on your shipment when first received and before you sell the products to your customers for obvious reasons.
  • If your order is particularly large or you are spending a lot of money, you should consider using a China-based reliable quality control and inspection service which can check the quality of your products before they are shipped, or perform an audit on your preferred supplier.
  • Lastly, if you’re serious about importing from China business and have the time and means, visit your supplier (or a number of them) in China!

In my next post, I’ll share insights on doing business with Chinese suppliers in relation to understanding some major cultural differences.

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How to Import from China

June 6, 2010

As part of my business at www.dhgate.com, I make it a point to constantly keep in touch with my customers and clients, whether they are Chinese suppliers and manufacturers, or foreign importers and sourcing companies particularly new market entrants and established SME’s. This enables me to continually refine my website to improve the customer service and add new innovations.

As part of this process, I hear many success stories of overseas customers, more than often from the US, who have successfully started a new business through importing product from China or have significantly reduced their costs or increased their product range via this method. I am also often asked about the best ways of starting to import from China and what pitfalls to look out for.

Some of the emails I receive from DHgate customers in the US give me examples of their initial experience in importing from China, and often it was not initially that successful. Usually this is as a result of choosing the wrong supplier, not doing your homework and rushing into product order and underestimating the nature of international trade. I want to share it with you over the next couple of posts some of my thoughts and tips to make sure your experience is successful.

Choose Your Supplier Well

One of the most fundamental errors is to pick a supplier without a thorough review process. Check whether they are the actual manufacturer or merely a wholesaler as you always want to deal directly with the source. Check the supplier’s website to see whether it’s in English which is always a sign that they do business with foreign companies. Ask the supplier for testimonials and references, and then check them up. Use a China-based verification company if the size of the order warrants it, or read customer reviews. For example on my site, www.dhgate.com, we have a number of verification methods like a 3 tier rating system and a Feedback scores from other buyers.

Don’t Rush; There’s Plenty of Time

Next, don’t rush into anything. Although there is pressure from both sides to get it done as soon as possible, it’s best to give yourself a long lead time to do proper research, complete perfect product specifications and shop around. The product will always be there, and it maybe cheaper next month or with a different supplier.

Don’t Underestimate Time and Costs

Although international delivery these days is very efficient even for smaller product orders, it’s probably wise to always work on the basis that the delivery will be late, so factor it into your plans. Also, it is probable that the landed costs will be higher than quoted or you have estimated. Eager buyers have a tendency to underestimate the time and costs of importing from China.

Don’t Pay Purchase Price Upfront

Never pay the purchase price or a substantial part of it upfront. If you do this, then it will be highly unlikely you will get your money back if there’s a problem with the quality of the products or there’s a severe delay in the shipping. If a supplier demands you do this, it’s probably best to find a new supplier. At www.dhgate.com, we use an escrow payment system where you don’t pay the supplier until you’ve received your shipment and are fully satisfied with it.

In my next post, I will give some more tips on how to deal with Chinese suppliers and basics on how to import from China especially in relation to understanding cultural differences, maintain product quality and dispute resolution.

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The Competitive Situation in China

April 22, 2010
In recent posts, I have been discussing payment systems in China. Before I continue on that in my next post, today, I would like to talk about Alibaba’s recently developed hacker-technology and how this relates to another important aspect of the business environment here: the competitive situation in China.
One of the key challenges facing China is moving away from low-quality imitation of products and services to more innovative, high-quality equivalents. In fact, this is a key area of investment for my company, DHgate, as we development support and education systems for Chinese manufacturers. Previously, Chinese businesses could create value by lowering production overheads; however, in the twenty-first century, being ‘cheap’ is not enough. I believe the goal should be for Chinese businesses to create value in a totally different way: by innovating beyond the competition.
In recent years, what we have seen is the emergence of a vanguard of dynamic new Chinese businesses that are capable of this. Through DHgate.com, I have found that fostering this attitude internally has allowed us to achieve rapid expansion in international markets. In the West, audiences respond to originality and not, as has been the case in China, to replication.
This has been at the forefront of my mind recently, as one of our key competitors Alibaba, developed and introduced a mechanism which allows its suppliers to access rival backend system and pull content over to their site. This competitive imitation is the hallmark of the old way of doing business in China, and it is a worrying sign that a recognized company such as Alibaba has resorted to these tactics.  This is not the environment in which Chinese business will thrive and become true international market-share contenders.
The philosophy we espouse at my own company, DHgate, is that to be the best you have to be able to innovate beyond the competition. First-mover advantage has proven to be key in online industries, but by the time a new feature has been widely replicated, a truly innovative company will already have developed another improvement.
The competitive situation is improving in China. Government regulations are slowly being rolled back, industries are becoming more diverse and dynamic, and a growing number of Chinese businesses have shown they have what it takes to be global leaders in their field.
China’s future lies in developing high-tech, fast-paced, competitive new industries, and I believe fostering a inventive business atmosphere, not competitive imitation, is the quickest and  way to get there.

In recent posts, I have been discussing payment systems in China. Before I continue on that in my next post, today, I would like to talk about Alibaba’s recently developed hacker-technology and how this relates to another important aspect of the business environment here: the competitive situation in China.

One of the key challenges facing China is moving away from low-quality imitation of products and services to more innovative, high-quality equivalents. In fact, this is a key area of investment for my company, DHgate, as we development support and education systems for Chinese manufacturers. Previously, Chinese businesses could create value by lowering production overheads; however, in the twenty-first century, being ‘cheap’ is not enough. I believe the goal should be for Chinese businesses to create value in a totally different way: by innovating beyond the competition.

In recent years, what we have seen is the emergence of a vanguard of dynamic new Chinese businesses that are capable of this. Through DHgate.com, I have found that fostering this attitude internally has allowed us to achieve rapid expansion in international markets. In the West, audiences respond to originality and not, as has been the case in China, to replication.

This has been at the forefront of my mind recently, as one of our key competitors Alibaba, developed and introduced a mechanism which allows its suppliers to access rival backend system and pull content over to their site. This competitive imitation is the hallmark of the old way of doing business in China, and it is a worrying sign that a recognized company such as Alibaba has resorted to these tactics. This is not the environment in which Chinese business will thrive and become true international market-share contenders.

The philosophy we espouse at my own company, DHgate, is that to be the best you have to be able to innovate beyond the competition. First-mover advantage has proven to be key in online industries, but by the time a new feature has been widely replicated, a truly innovative company will already have developed another improvement.

The competitive situation is improving in China. Government regulations are slowly being rolled back, industries are becoming more diverse and dynamic, and a growing number of Chinese businesses have shown they have what it takes to be global leaders in their field.

China’s future lies in developing high-tech, fast-paced, competitive new industries, and I believe fostering a inventive business atmosphere, not competitive imitation, is the quickest and way to get there.

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Chinese Parliament and You

March 14, 2010

Now that the spectacle of the Chinese Spring Festival has finished, China is back to business. Whereas February is the festival season, March is politics season. This week I want to focus on some pressing economic and financial issues because of their importance to US buyers of Chinese products.

Beijing has become the focus of China as over 3000 government and people’s delegates descend on the capital for a ten day Congress which decides the economic, social, legal and other policies of the country. It is a particularly important and timely meeting as there are a number of pressing economic and financial issues, like inflationary pressures and the valuation of the Chinese currency the yuan, that are uppermost in many people’s minds – Chinese and foreigners alike.

February was a great month for Chinese exports which were up about 45% on the previous year. There is guarded optimism that this trend will continue and I believe that cross-border ecommerce will be a driving force.

Looking at our transactional data and talking to our DHgate.com Chinese suppliers, I believe that foreign companies, particularly US firms, are replenishing their inventories and introducing new product lines. This is a strong sign of increasing confidence in the future.

Also in my discussions with Chinese and international clients and colleagues, I am constantly asked about my opinion on the direction of the value of the RMB. Clearly this has a direct impact on the costs of sourcing and has tremendous importance. You will no doubt have seen and read numerous analyses, commentaries and articles on this issue.

I don’t want to get into a debate of the rights and wrongs of this issue, but I think it’s suffice to say that there’s a lot of misconception and misunderstanding on both sides. I believe though that there will be no significant movement in the value of the RMB in the short term. Whether there will be a slight rise in its value later in the year as some are predicting will depend on the economic performance of the country. In the meantime, China-sourced products continue to remain extremely cost competitive for SME buyers. Stay tuned as there is a lot more to come on this issue.

The other major Chinese financial issues that have the potential to affect Chinese suppliers and overseas buyers are the specters of inflation, wage rises and looming labor shortages.

Despite a recent spike in inflation (particularly in the food, housing and wages sectors) over the past few months, the Government appears to have it under control. With respect to the labor market and costs, I’ll post on this issue in the future.

On a final note, during the Congress, the Government announced a major commitment to the development of China’s ecommerce platform, particularly in the SME sector. This is the first time it has been made a ‘front and center’ policy. A number of initiatives will be promoted to introduce SME online suppliers and manufacturers to better business practices and ecommerce trade. This is a welcome development.

My own company, DHgate.com, is actively developing its training and education programs for our online Chinese clients and welcome this Government policy which complements our vision for the future of high-quality product and service offerings from China’s manufacturing sector. I’ll talk more of these initiatives in a later post.

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China Sourcing Trends

March 1, 2010

In the January issue of the UK’s ‘Internet Retailing’ magazine, I wrote the below piece for their ’Insights from Around the World’ column on the sourcing trends in China for overseas retailers. It includes some information that many of you will find interesting. Let me know your thoughts!

Insights from Around the World: China

Despite the winter chill, China was red-hot at the close of 2009.The country’s manufacturing activity accelerated in December at its fastest pace in several years and foreign exports were up USD$130.7bn, up 17.7% year-on-year. J.P. Morgan said it expects China’s growth momentum to continue throughout 2010. All this at the same time as internet shopping in the UK grew at its fastest rate for 22 months in December, as millions of shoppers migrated online to buy their Christmas goods.

Controversy over Beijing’s policy of pegging its currency to the U.S. dollar may continue to concern economists, but for the time being the fixed exchange rate gives China’s factories a nearly unbeatable price advantage against manufacturers in other countries.

The price advantage has grown even larger after the U.S. dollar, and therefore the Chinese yuan, fell sharply against other major currencies last year. Combine this financial situation with the growth of an already mammoth manufacturing industry and you get a retail buyers market.

Retailers purchasing inventory in China via DHgate.com demonstrated some interesting trends in 2009. Although Apparel and Accessories remained strong, technology purchases ranked as the most popular, accounting for around a third of transactions and a rise of over 10% on the previous year. Strong growth was also seen in the Health and Beauty and Home and Gardens categories, both showing year-on-year increases of around 40%. And with total Christmas stock purchasing representing DHgate’s busiest in its five year history, Chinese manufacturers are expecting to see huge growth in 2010.

With an increasing number of Chinese businesses setting up wholesale and manufacturing operations online, those who source from China will have a distinct advantage.  Traditionally it has been the Big Box retailers who benefit from China sourcing. The new evolution of this industry online allows smaller business to also benefit and pass on savings to their customers – increasing profits.

As consumers resume normal spending habits, retailers capitalizing on the surge of quality goods provided by Chinese manufacturers have the potential to expand their market share.

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