When it comes to importing from China, finding the right and best supplier plays a vital role. It literally determines whether it will be a good start of the entire procurement process or not.
Now here comes the question: how on earth can one find the best fit? In this article, we will show you how to find your best suppliers in China in 3 steps.
Step 1. Get a supplier candidate list.
To find a supplier in China, you have 3 typical options:
- Find suppliers all by yourself
- Find suppliers from a sourcing company
- Deal with a trading company
Get to know more about the pros and cons of these options here.
You can build your potential vendor list from different options mentioned above. After the supplier list is created, you will need to analyze who will be your best fit.
Step 2. Evaluate the suppliers.
No matter you are sourcing all by yourself or via sourcing agents, you need to figure out which vendor or manufacturer or wholesaler is your right fit. There’s no one-size-fits-all supplier. That’s why you want to find a supplier that matches the portrait you draw in the groundwork for supplier evaluation.
So what to look at during supplier evaluation?
- Company registration and product certificates
Is the supplier legitimate?
Is the product compliant with importing country regulations?
- Business model (basic verification)
A. Check the product range on their official website or Alibaba or global sources or other directories where you find them.
Do they display one niche product or multi-category products?
What products do they display in the eye appealing areas?
B. Check the company’s registration information. Business scope information is normally shown in the highlight place on the registration.
Is the business scope correspondent with what they are promoting?
The quick take can give you a general idea of whether it can be a manufacturer/trading company/wholesaler/middleman.
3. Supplier scale
Your desired supplier scale should match your business and order scale. Take a look at how they rank in different metrics.
Price level: Big scale supplier > medium scale supplier > small supplier
Quality stability: Big scale supplier > medium scale supplier > small supplier
Flexibility (design alternative, service in place): Small supplier > medium supplier > Big supplier
Lead time: Big supplier > small supplier > medium supplier
Bigger manufacturers have higher pricing because of the equipment and management etc cost higher, for which reason they have more stable quality and fewer quality issues.
The flexibility for a big supplier is not charming because they have a system in place. A big company have to follow the system and can’t change things easily and conveniently.
4. Is the supplier pro-active? Do you feel comfortable to work with them?
How the potential suppliers are interacting with you can be seen as a signal for follow-ups.
Being pro-active before the order is placed doesn’t mean they will do it well in the entire process, but if they are not doing a good job at the first place, there’s little chance they will change after taking your money.
Are they responding to what you are asking and what you care about?
Do they take it seriously to communicate with you?
5. Price, quality level, lead time, service terms
These are core factors you want to check whether the potential supplier can meet your baseline or not.
Price can be the very one biggest factor that drives you to import from China. Good price IS surely important but it is not the only factor. Low price must have a reason.
Imagine you are negotiating with a supplier…
– I like your company and products but your price is way too high. I’m wondering if you can reach $2 per unit(original offer is $4/pc), I will play a test order for 1000 pcs tomorrow if the price is good.
– The target price is really challenging but to establish a new relationship and as a friend, we can do that for you this time only.
（Want to know how to negotiate effectively with your suppliers? Check this post: How to Negotiate with Suppliers）
Would you concern about the following?
Is he trustworthy? But he doesn’t sound honest in price at all. It’s a 100% discount all due to one sentence!
What would they do to my goods during production? The quality must be questionable.
6. Are they professional?
What kind of professionalism will benefit your procurement?
The professionalism of product knowledge is a basis. These are some more you want to look for in the salesperson and company: company and product strength, target market trends, market competence, good knowledge about what is important to you, what you want and need and feedback with particular proposals.
It is very difficult to find a perfect sales or supplier, but please pay attention to spot them and see whether they have good service traits. It will help a lot along the entire import process. The mindsets do matter.
Step 3. Verify your prospective suppliers
Again, you can do the verification by yourself or via a third party for more in-depth work including MatchSourcing.
Supplier verification is important especially when you are looking for a new vendor OR your product/project is complicated OR the order is a big one. You don’t want any dishonest supplier to scam and rip you off, then run away.
- Company Background
Ask suppliers whether they can send you copies of these official documents.
What is some basic information that you want to get on the official documents?
Year of Registration
Registered Business Scope
Tips: Registered capital and Quality management system of ISO 9001 may mean little now but let’s take it as a must-have to sift out those, not qualified vendors at the first beginning.
2. Check the company presence on the internet
Google how the company image by searching company name, email, contacts and number.
3. Check whether they have records in customs data (via import genius etc)
Do they have stable exporting records?
Who are some of their customers?
4. Phone call/video meeting
You may find it frustrating to communicate with Chinese sales by phone because English is not a Chinese first language. But what you want to do by a quick call is to get a feel that whether they are saying the same as what they write. Ask them some questions that you care about in terms of company and products and so on so forth. Check the information provided on the phone to see whether it matches what they display online / in catalog or company introduction documents. Many factories tend to talk big to win orders. Beware whether the supplier sounds real or bragging. Compare with what they’ve done for you to see whether they do what they said.
5. Factory Visit
If flying to China to visit the suppliers is a bit time-consuming and not cost-effective for you, you can find a third party to help you with it. It can save you a good time and efforts.
A face to face talk with the supplier in the factory plays a vital role. Apart from telling the good and bad of the supplier from virtual interactions by emails and calls, what the supplier performs in real life can also give you a general picture.
Equip with specific goals that you would like to reach for the factory visit and maximize the results. The goals can be like factory scale, personnel, and production process and performance and much more.
These are top 5 things suggested to find out during the factory visit.
- Is the factory a real one? How is the personnel like?
- Does the factory manufacture all by itself or does it subcontract some items?
- How do they manage the quality control system?
- Is the factory busy in production?
- Does the factory know product development?
What do people say? If you don’t ask, you don’t get. But, do not ask the supplier too many questions one time, they will be overwhelmed and doubting whether you have orders for them. Ask right questions at the right time.
To get suppliers responsive to your questions, you need to let them know that you are a serious buyer. As it goes, to sow before you reap, you can provide some background on you and your company, together with product specifications.
Otherwise, factories see no prospect to spend time in responding to the questions. Most factories are busy and only take customers serious when the customer have a specific product inquiry.
We’ve listed a couple of questions that you may need in your import process.
Questions for supplier vetting phase
- Can you tell a little background about your company?
- When was your company established?
- When did the company start to export?
- Are you a manufacturer or a trading company?
- I’m fine with either one but I need to know who I will be dealing with.
- Where is the factory?
- Do you have your own website?
- What are your main product lines?
- What certificates and qualifications, patents do you have? Can I see?
- Can you give some of your customer references?
- Not necessary to be customers from the same country to avoid competence worries. Can I talk to them?
- What markets are you selling to?
- How is the quality control system like?
- What are your strengths over your competence like xxx, xxx, xxx?
- Do you have your own designing department?
- Would you mind talking about how the personnel is like?
- Who are your main customers, retailers, wholesalers, importers or distributors?
- Do you sell directly to end customers as well, e.g. Via online business?
- How many workers are working for your company?
- Do you have any Factory Audit and Inspection Experience?
- Do you have Product Safety Testing Experience
Questions for inquiry phase
- What is your minimum order quantity?
- What are the sample price and sampling time?
- What is the turnaround time?
- What are your payment terms for the first time?
- What are the payment terms for return orders?
- How is the production process like?
- What about your production capacity monthly?
- Do you have the equipment, personnel, and experience to make a quality product on time?
- What happens if there were any quality issues?
- How is the warranty like?
Questions for the negotiation phase
- I like your company and products but your price is much higher than xxx. They can offer the same quality at xxx. Why?
- Can you give a breakdown of the quoted price?
- Your lead time seems quite long. Why?
- We deal with our suppliers in L/C for years. Can you make it?
- Read more negotiation skills in this post: How to Negotiate with Suppliers?
Again, there’s no perfect or one-size-fits-all supplier/vendor. Keep in mind to figure out what core factors can push your BUSINESS forward best and fast. Balance what you want and NEED and I think that’ll help to find your best supplier.