Minimum Order Quantity (MOQ) – Why It’s Required by Chinese Suppliers

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The Minimum Order Quantity (MOQ) requirement sets the lowest quantity of a certain product (e.g. 500 pcs) that a supplier is willing to sell. If the importer cannot reach the MOQ requirement, then the supplier is not willing or able to enter production.

In this article, I explain why the MOQ requirement exists, and what you can do to reduce the number of units you need to buy.

What is the Minimum Order Quantity (MOQ)?

The MOQ requirement is the minimum number of units you need to order from a supplier. It can be set per order, per product, per material or per color. For example, if a supplier sets their MOQ at 500 pcs, then you must purchase at least 500 pcs before they can accept your order.

How do I find out the MOQ of a supplier?

The MOQ is often specified on the suppliers Alibaba page, or website. You can also contact them directly to ask for their MOQ.

Keep in mind that the MOQ is fluid, as it varies depending on a range of factors. In addition, there are also different MOQs to keep track of, not just one.

What is the Minimum Order Value?

A Minimum Order Value is the lowest value of goods a supplier is willing to sell on a per order or product basis. If the Minimum Order Value is set at US$5000, then they will not accept orders below this figure. That said, manufacturers almost exclusively set a minimum quantity rather than a minimum value.

1. Low-profit margins require larger volumes

Most Chinese manufacturers tend to operate on razor-thin profit margins. Often as low as 3 to 4%. Low-profit margins require the supplier to produce a large number of products in order to break even. Continue reading Minimum Order Quantity (MOQ) – Why It’s Required by Chinese Suppliers

Top 10 Sourcing Companies and Agents in China 2019

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A Sourcing Company can be an invaluable partner when importing products from China. Or, they can be a useless middleman that offers nothing but delays and higher unit prices.

This is not a regulated industry, so anyone can claim qualifications to manage product and supplier sourcing.

In this article, you will learn what a sourcing company can do for you – and how much you should expect to pay them.

In addition, we also list some of the leading sourcing companies in Mainland China and Hong Kong S.A.R.

Why should I work with a Sourcing Company?

The core function of a sourcing company is to identify qualified suppliers, based on the customer’s needs and technical requirements.

There are no industry standards for how the supplier sourcing process is managed. Some Sourcing Companies have a more relationship-based approach, funneling customers to their existing supplier network.

This can be a win-win for both you and the sourcing companies, assuming they select suppliers based on the product’s technical specifications – rather than the size of the kickbacks they receive.

I’d say that most sourcing companies put kickbacks before selecting the supplier that is the most qualified to make a certain product.

Most sourcing companies can do a lot more than just, well, sourcing products.

For example, some can help you with factory audits, quality inspections, contracts, quality assurance and day to day administration.

As said, there are no set industry standards, so you need to discuss this with your Sourcing Company.

How do sourcing companies charge for their services?

Previously, most sourcing companies charged a commission based on the order value. However, in recent years, more and more sourcing companies have adopted fixed pricing.

Thus, they charge based on a per project or service basis, rather than a commission.

Of course, the final cost depends on what exactly you want the sourcing company to do for you. Continue reading Top 10 Sourcing Companies and Agents in China 2019

Plastics Manufacturing in China: A Complete Guide

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Many products made in China, and elsewhere in Asia, include components made of plastics that were melted and formed with the use of a mold or a die. And yet, not many buyers are familiar with that material and the related fabrication processes.

This article, written by Renaud Anjoran, founder of Sofeast in Shenzhen, will help you with the design, development, production, and quality control stages. Don’t rely on your suppliers for all the information about your products. Continue reading Plastics Manufacturing in China: A Complete Guide

Trading Companies in China: A Complete Guide

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Everyone wants to stay away from Trading Companies and go directly to factories when buying from China. That said, it’s not always clear when the trading ends and the manufacturing begins. In this article, I aim to explain what a trading company is, and how they differ from manufacturers.

Further, I also cover the different types of trading companies, some of which are good and some of which are less so. Continue reading Trading Companies in China: A Complete Guide

Costs When Importing from China: A Complete Guide

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Calculating profit margins directly on a unit price is not a wise decision. When importing from China, there are many costs to take into consideration, and I’m not only referring to shipping and import duties. Buying products from Chinese manufacturers is much like flying with a budget airline. No extras included.

You get what you pay for.

They provide machinery, labor and (hopefully) manufacturing expertise. You provide the rest, including things that a buyer would normally take for granted.

Need a customized component or material substance analysis? That’s on you, not the supplier. Businesses importing from China must manage, or pay someone to manage, critical parts of the supply chain, including product development, quality inspections, tooling and laboratory testing. In this article we explain what costs you need to keep track of, when buying from Chinese suppliers. Continue reading Costs When Importing from China: A Complete Guide

Factory Inspections & Audits in China: A Complete Guide

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Get a free quality inspection quote here

Found a supplier online but not sure if they’re everything they claim to be? Factory inspections, which can easily be booked online, can quickly put boots on the ground and verify what’s actually going on behind the factory gates.

In this article, you will learn everything importers and Amazon sellers should know about factory inspections:

  • What is a factory inspection?
  • What is not covered in a factory inspection?
  • How can a factory inspection or audit help my business?
  • At what stage should we book a factory audit?
  • How much does a factory audit cost?
  • Can we visit the factory ourselves?
  • How long in advance do we need to book the inspection?
  • What is the difference between a quality inspection and a factory inspection?
  • Should we always book a factory inspection before deciding on a supplier?
Bonus Content
  • List of Factory Audit Companies
  • Factory Inspection Sample Report (PDF)

Continue reading Factory Inspections & Audits in China: A Complete Guide

How to Manage Order Follow-ups in China: By Asiaction

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order management

Once you’ve placed an order and wired the upfront deposit payment you’ve got two choices. You can either sit back and hope that the supplier will get your product right, or you can actively manage the process to defect early-stage quality issues – before it’s too late.

Doing so doesn’t require that you spend 2 months in a sleeping bag on the factory floor. In fact, you can manage order follow-ups from your phone or computer.

In this article, Gaël Tauvel, co-founder of Asiaction in Guangzhou, explains how to manage order follow-ups to ensure that the number of defective units is kept to a minimum.

This is covered

  • How often should importers follow up with their supplier?
  • What kind of information (e.g. photos and videos) should the supplier provide?
  • Order follow-ups when buying custom-designed VS private label products
  • How to resolve early-stage quality issues and defects

Continue reading How to Manage Order Follow-ups in China: By Asiaction

How to Find a Design Freelancer for Your Customized Products

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In the age of Amazon brands, Aliexpress and Wish, it’s becoming increasingly difficult to succeed with generic private label products. Creating unique, custom designed, products is the only way forward for smaller E-commerce businesses that can’t compete on price alone.

Yet, while many E-commerce businesses have great ideas for custom designed products they want to bring to market, they lack the in-house design expertise, or budget, to turn their visions into practical 3D design files and technical drawings.

But, as I explain in this article, the creation of a custom-designed product is not nearly as complex or difficult as you might think.

Keep reading, and learn how our customers have used Upwork.com to find amazing freelancers, turning their concepts into technical drawings and CAD files for as little as $100.

1. Prepare a ‘Design Concept’ PDF

Product designers are not psychics with mind reading abilities. They need clear instructions in order to turn your product and design ideas into drawings that make sense to a manufacturer.

As such, the first step of the process is to define those ideas the form of text and basic drawings.

If I want to create a wristwatch design, for example, I should prepare the following material in a PDF file:

  • Watch case sketch (various angles)
  • Indexing sketch
  • Crown sketch
  • Hands sketch
  • Strap sketch

In addition, I’d also specify the following:

  • Colors
  • Logos / Engravings

There’s no right or wrong when it comes to communicating your ‘design vision’ to a freelancer, as long as it’s done in a way that they can easily understand. Use photos of similar brands edited in photoshop, or a rough napkin drawing – what matters is that you don’t leave the designer guessing what you want.

Finally, you must also set a clear deliverable for your future freelancer. If we stick to the wristwatch example, I’d request the following:

  • Watch case design (AutoCAD)
  • Strap design
  • Logo file
  • Backplate engraving file

The more specific you are, the faster your designer can turn the project around. Continue reading How to Find a Design Freelancer for Your Customized Products

Chinese New Year 2019: How Importers Can Prevent Disaster

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The Chinese New Year (CNY) of 2019 starts on Tuesday, February 5th, and lasts officially for 7 days. While many of us who work in Asia are painfully aware of the Chinese New Year, and the coming disruption to all production, many Importers are caught completely off guard.

As if the rush to get your shipments in time for Christmas is not enough, you now have to make sure that your goods are ready well before your supplier close the shop for CNY 2019. During this holiday, all factories are shut down. Without exception.

While the official holiday only lasts for around a week to ten days, most factories are closed for an entire month. With severe delays to be expected once they open up again in March.

This time is especially risky for products that are due for shipment in the spring and summer season. Think swimwear and outdoor furniture.

Now is the time to prepare, and in this article, I will explain how you can avoid delayed shipments and quality issues during the Chinese New Year of 2019. Continue reading Chinese New Year 2019: How Importers Can Prevent Disaster

Freelance Sourcing Agents in China: A Complete Guide

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Sourcing freelancer woman

Tired of endless Skype conversations with pig headed suppliers at 4AM in the morning? You’re not alone. Luckily, someone else can manage the more tiresome parts of your Ecommerce business for you – leaving you with more time to spend on making money.

In this article, you will learn how a sourcing freelancer can free up hours from daily schedule – for a price that anyone can afford. That said, things will go wrong, if you don’t manage your sourcing freelancer the right way.

What can a freelance sourcing agent do for my business?

A sourcing freelancer can act as your extended hand in China. They can do background checks on suppliers, gather quotations and other time consuming tasks that you rather leave to someone else.

They can also break down language barriers, and deal with suppliers in their own time zone.

Managed the right way, a sourcing freelancer can help you save countless hours on a weekly basis, for a fairly low cost.

However, sourcing freelancers are ‘everything experts’ that can help you with everything from product safety, to NDAs or patents. Yet, that is exactly what many Importers assume. Continue reading Freelance Sourcing Agents in China: A Complete Guide