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8 Tricks for Product Sourcing in China – A Cost Down Guide

Discussion in 'China Sourcing' started by ACKKA, Nov 20, 2016.

  1. ACKKA


    Nov 16, 2016
    You know clearly that well begun is half done, and I hope you will also agree with when I say:

    Cost down your product sourcing in China is half success of your importing business.


    In fact, many first-time importer fails to their first step with a heavy load. So I’d like to explain how to avoid and what you should consider about, as you need to test your market first with smallest capital at this stage. And, put your investment in more important thing, sales & marketing.

    So let’s move forward.

    #1 To start with sourcing one product at a time
    You can easily find many successfully proven cases that just start with one or handful products, and according to the response of the market to decide the next step afterwards. Expanding a product line needs a single product to be proven at the beginning.

    If you plan to start with a plenty of products, it will be required a lot of time and money to invest. That’s a hard and difficult path to go as a first-time importer or startup.

    Investing in one product is a good option to cost down and lower risk for your first step of China sourcing journey.

    #2 Find professional suppliers who specialized in your target product
    If you are focus on single category that you would like to put on a long-term consuming involvement, to work with a professional supplier instead of a vender who provides a vast range of product.

    Do some research about the supplier to check if a specialist or not in the field of your target product before you contact them. And it’s unnecessary to care too much about they are a factory or trader because a professional trader must have strong advantages of sources that allows them to provide you a still competitive price even lower than a sundry goods factory.

    So, find a specialist as your importing business partner to keep cost down constantly in the future.

    #3 Always negotiate price with Chinese supplier
    Remember, ANYTHING is negotiable when you dealing with Chinese suppliers.

    Thanks to there are too many suppliers (including other Asian countries) showing up and easy to be found in the internet, it’s buyer’s market nowadays. So, feel free to ask for a lower price once you decide to work with them after compared with different suppliers.

    But keep in mind, the seller is a person try to earn money (just like you) – always be respectful. Just don’t too restricting to lose the quality. One thing I’ve heard that a buyer paid for a price much lower than the market which is lower than manufacturing cost, guess what, the supplier was disappear finally as they cannot earn any money from this order. Obviously, the buyer suffered a greater loss.

    Always negotiate with price is good, but don’t over-restricting.

    #4 Try to keep your product design as simple as possible
    In the aspect of design, less is more. It will generate a certain cost because most of new products requires tooling (metal and plastic) to produce. In some case it would even cost more than your total goods value. It will be a high risk to invest too much on a new project which is not proven by market. So don’t require too complex product on design or function.

    You can go with existing product or just change a little about it. Says color, material and packaging. And many experienced brands through this way to test the market as the first step of sourcing in China with a low cost.

    #5 Consider to go with appropriate quantity
    To reach manufacturer’s MOQ as possible as you can. Although it increases your total cost, but will reduce your average product cost much.

    Let’s check what’s the differences of landed (including manufacturer’s markup, shipping and import duty) price from following chart.

    As you see, there is no advantage of importing from China if you go with low quantity. Moreover, you have to wait for a long time to get imports delivered.

    So it’s important to consider a suitable quantity to cost down your sourcing result.

    #6 Select shipping method by sea, not air
    Shipping by air is costly but much quick, only use it when:

    1. Check your product sample
    2. You need to step into your target market as soon as possible with less quantity
    3. Emergency replenishment

    In order to cost down your product sourcing result, shipping by sea always is your first choice.

    90% of trade is through sea shipping in the world. You will never image, a monster importer ships dozens, even hundreds of containers

    at one time. That makes their cost of shipping just in few of penny for each product.

    #7 Don’t expect a highest quality/material
    Every brand’s owner hopes their product is made of highest quality or used best material. But truth is that 80% of major retailers uses normal standard level material which is just meet the requirement of the market.

    You can also claim high-quality on marketing words. It’s a common way for costing down and it’s used by most of famous brands through my on-the-ground experience of source for successful seller on Amazon and Ebay.

    It’ works and profitable to use standard level quality product. All you need to focus on better marketing skills. No need to chase highest quality before your idea product has generated sales by your target market.

    #8 Go with simple & suitable packaging for your first time of product sourcing in China
    It will consume quite a sum of money and time if you attempt to chase a perfect packaging at the beginning. Don’t do that unless your idea product is depends on unique design of packaging to generating sales and you are also experienced in design aspect.

    The packaging of product is also an important way to reduce your sourcing expense. It’s mainly costed by 2 points as bellow:

    1. Packaging design: Oftentimes, design is the most expensive works if you ask for perfect design. So keep it as simple as possible. In additional, thanks to Apple, now minimalism is popular. That said, even a simply white or brown box with only a logo will work.
    2. Packaging size: Mostly, the charge mode of shipping is about volume, so as your warehouse charges. Thus, try to make it as small/fit as possible. The smaller packaging volume you go, the lesser you will cost.

    In conclusion
    Keeping cost down always should be the goal of your China product sourcing journey. Again, it’s unnecessary to chasing perfect version of our product at the beginning. All of above points could be improved after you earned more revenues.

    The original article posted on http://www.ackka.com/product-sourcing-china-tricks/

    Also Read:
    rodney beech and Cody like this.
  2. Barry chan

    Barry chan

    Feb 15, 2017
    I only aggress some, here too many suppliers, no lowest one,actually. if low cost, it will take you to risk on quality.
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