Most companies consider importing from China because they want to sell on Amazon. Basically, while selling on Amazon you have five business models:
- Drop-shipping
The product is manufactured and shipped on behalf of the merchant by a third party. However, Amazon’s drop shipping policy stipulates that the name of the seller appears on all packaging, invoices, and communication.
- Retail arbitrage
The seller purchases items at a discount from a retailer and resells them on Amazon for a profit. Low margins are connected with arbitrage. The key is to select the appropriate product.
- Selling wholesale
The vendor purchases wholesale goods in large quantities and then offers them on Amazon. One-quarter of third-party merchants prefer this business strategy.
- Selling private label products
Any seller will purchase products from a third-party manufacturer and resell them on Amazon under their own brand and marketing.
- Manufacture and sell
The manufacturer is also the seller. They have a better profit margin and more control over the quality of the product, but they also have manufacturing costs. Amazon also provides an artisan-only community for handcrafted goods called Amazon Handmade.
Many reasons why these days sourcing products from China has become so popular. The following are a few of the reasons:
- Very high-profit margins, which is even higher than drop-shipping and that means one can make plenty of money
- It is quite easy to import into the USA
- Plenty of real, tangible products are developing and to sell them can be exciting
- No special need to even travel to China for finding the products.
Pros and cons of Amazon
Pros:
- Household name: Almost everyone has heard about Amazon and they trust it.
- Huge market: If you sell on Amazon then you can have access to its about 300 million readily available customer accounts.
- It is easy: To join Amazon is very simple than even launching your own website. Also, Amazon can do a lot of marketing and managing your logistics.
- Big savings: Amazon stores your inventory with FBA for a certain fee. But still, you can save the expense of your own storage space.
- Business growth: In case you are not tied up with Amazon, then you might be left behind.
Cons:
- Intense competition: Because of this you will be forced to sell at a very low price, particularly if you are selling such a product that is sold by many others.
- Gaming the Amazon system: Some unscrupulous sellers may also hijack your sales listings and outsell their products that might be counterfeit. Also, they may deface your product listings or leave fake reviews and sabotage your business.
- High commissions: Right from storage to shipping, you will get Amazon conveniences at some price. As a result, your profit margins get low.
Four easy steps to sourcing any product
If you are interested in sourcing products from China then the following will be your involvement in the whole process.
- Share your requirements including drawings
Ensure that you share all your details about your requirements e.g.
- Drawing
- Your material choices
- Any previous issues
- Your expectations.
- Review quote
You will receive the quote with all details and you need to find any potential issues and risks.
- Review sample and report
After your acceptance of the quote, your agent will do the factory audit and go for sample production. Then they will send you a complete report and also a sample for your review.
- Receive goods
You will receive your goods well in time.
Why China has emerged as the main source?
Low labor costs, a competent and technically capable workforce, and great infrastructure are the three key reasons China has today become the manufacturing powerhouse. As a result, manufacturing output is strong, and the export market is expanding.
China’s perseverance is seen in the fact that it was the only economy to grow in 2020 despite a devastating Covid-19 outbreak. It has also weathered a severe trade war with the United States, putting to rest any notions that its exporting capability has reached its limit. All of this proves that sourcing products from China are a wise decision.
Despite the benefits, western corporations are typically hesitant to buy directly from a Chinese manufacturer or supplier, especially if they are unfamiliar with the game and China’s peculiar business practices.
A knowledgeable China sourcing agent will make the process both simple and profitable. In short, a sourcing agent is a person, agency, or company that assists a buyer in locating and verifying a supplier while also facilitating contact between the two.
If needed, a sourcing agency can handle the full procurement process for you, including pricing negotiations, production management, and quality control, as well as payment, document preparation and checking, shipping, and logistics.
You will probably need a sourcing agent in China if you:
- Have got no prior exposure to importing and sourcing goods from China
- Need a very large inventory of goods
- You need to source several products
Choosing the right agent for China sourcing for any of your specific needs can often be as much challenging as deciding any supplier yourself. Remember a good sourcing agent will have:
- A good local presence in China, and also have a good team with an office
- An office that is very close to you so that you can easily access them whenever any problem ever arises with your order
- Communication skills must be excellent including fluency in English and Mandarin
- Enough experience of working as a sourcing agent in China
- Special expertise in sourcing the kind of product that you want to import
Conclusion
A sourcing agent is a vital link that ensures a pleasant experience while sourcing products from China. They may do so because of their local presence, business insights, communication skills, and, perhaps most crucially, cultural subtleties knowledge.
As a result, finding the correct China sourcing agent is critical to a positive sourcing experience and, ultimately, company success. Working with a sourcing agent, on the other hand, is about obtaining the maximum value for your money.
The proper one will assist you in negotiating the greatest price for your product while maintaining quality and timeliness. Striking a proper balance between the two will take a lot of work. Your sourcing agency will take care of the remainder at a fair price.
