Category: Importing Guides

Buying Product Samples from China: A Complete Guide

Posted on by Fredrik Gronkvist — 48 Comments

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Product samples are essential when importing products from China, and elsewhere in Asia. Obviously, you want to see and feel the product before you start production. However, ordering product samples is also a way to test if your supplier is truly up to the task.

In this guide, you will learn everything importers must know about product samples, including costs, types and lead times.

Product sample types

  • Factory samples
  • Custom made product samples
  • Production samples
  • Virtual samples
  • 3D printed samples
  • Counter-samples

Other Topics

  • Product sample costs
  • How to pay for product samples
  • Injection molds and tooling costs
  • Sample production time
  • Import duties and taxes

Continue reading Buying Product Samples from China: A Complete Guide

Price Negotiation with Chinese Suppliers: A Complete Guide

Posted on by Fredrik Gronkvist — 4 Comments

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Trying to figure out how to negotiate and get a better price from your supplier? Going too hard on the price negotiation can result in terrible quality issues and unanswered calls.

If you ask me, successful price negotiation is about finding the right equilibrium, where you pay the right price for the right quality, while the supplier can make enough money to stay in business and pay their owners and employees.

That’s not asking for too much.

Keep reading, and learn why you should not haggle your way down to poor quality, how you can prevent your supplier from jacking up the prices, and why you must be ready to stand up and walk away if they try to do so.

This is covered

  • Set your target price
  • Price negotiation is expected in China
  • Accept that the supplier must also make a decent profit
  • Be clear about your quality requirements before you start negotiating
  • Price negotiations must be done at the right time
  • Be ready to walk away at any time
  • Stay up to date on raw material costs
  • Other ways to get a better price

Set a realistic target price

Before you can engage in meaningful price negotiation, you need to set your target price. If you don’t already have one, you’ll need to contact suppliers to request quotations, and thereby find a price baseline.

Your supplier will ask you for both your specifications and target price when asking for a lower price. Sometimes they even ask before sending an initial quotation.

Further, it also helps you to know what to aim for. That said, your target price must be realistic.

Price negotiation is expected in China

Chinese suppliers don’t expect you to accept the first price offer. Price negotiation is even expected, and you’ll surprise your supplier if you don’t even bother to raise the question.

While there are limits to how far you should push the price, it’s alright to send them your target price and ask them to go down to match it.

Some may lower a bit while others walk away.

If the supplier quotes a price that’s way above your target price then ask why, and also share prices offered by other suppliers.

Further, I recommend that you request a price reduction shortly after having received the initial price quotation from the supplier. Continue reading Price Negotiation with Chinese Suppliers: A Complete Guide

What are the documents required to import products from China?

Posted on by Fredrik Gronkvist — Leave a comment

import documentation

Planning to import products from China, India or Vietnam? Shipping and product documentation is required for all product categories but to a varying extent. In this guide, I will explain which documents you need to obtain when importing products to the United States, Europe, Australia, and Canada.

Is this guide relevant to all products?

Many of the documents listed in this guide are mandatory when importing the following products:

  • Clothing and textiles
  • Watches and jewelry
  • Toys
  • Children’s products
  • Electronics
  • Machinery
  • Medical devices
  • Sunglasses
  • Bikes
  • Helmets

Continue reading What are the documents required to import products from China?

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

Posted on by Fredrik Gronkvist — 27 Comments

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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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plastics granule

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

Posted on by Fredrik Gronkvist — 10 Comments

Trading Company

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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

Posted on by Fredrik Gronkvist — 9 Comments

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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

Posted on by Fredrik Gronkvist — 5 Comments

factory inspection

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