Finding a good supplier or manufacturer in China can be a daunting task, especially for those who are new to the world of international trade. With so many options available and so much at stake, it’s important to do your homework and make an informed decision. In this article, we’ll guide you through the process of finding a reliable supplier or manufacturer in China, from identifying your needs and conducting research to negotiating terms and building a long-term partnership. Whether you’re looking to source raw materials, finished goods, or custom products, we’ve got you covered. By following these tips, you can increase your chances of success and avoid common pitfalls when working with Chinese suppliers.
Manufacturer Research: How to Find the Right Partner for Your Business
First, you’re going to need to do some research. Here are three ways to do solid research. So you can use Alibaba, directories, and you can take it offline by attending conventions.
So let’s start with Alibaba. Alibaba is a place where people go to find products that are already existing. However, this has a bit of a life hack because you can search for a similar product on Alibaba and start connecting with manufacturers for your customer request. But before we begin, let me tell you that vetting manufacturers is extremely important. Your manufacturer is going to control the cost of your product, the quality control, the packaging and the shipping, and they can really make or break your business. Also, depending on what you’re making, it can take as long as a year to bring a new product to market. So let’s do the vetting work upfront so that we don’t have to backtrack later. I lost five months of time working with the wrong partner. So here’s how you can learn from my mistakes.
So let’s input lunchboxes and then hit search by suppliers.
First, look for the right classifications. Look for suppliers that are gold suppliers. This means that they’re paying for their membership. Make sure that they’re assessed, meaning someone from a third party or Alibaba themselves have been to their factory. Also look to see that the supplier has trade assurance.
This is a free service offered by Alibaba that allows you to dispute a purchase if the quality isn’t there. So look for that as well. You can continue to search by applying filters. Filter by certifications to find a manufacturer that meets quality, safety and efficiency standards. So let’s say humane working conditions is a non-negotiable for you. You’ll want to make sure that they have an SA8000 certificate.
So let’s click into one here. First thing I see is whether they are a manufacturer or a trading company. We want to deal directly with the manufacturer rather than a trading company. A trading company is essentially a middleman.
However, if it says manufacturer and trading, this is also acceptable as it means they’re able to export your products. Now, look to see where they’re located. If they’re claiming to be a manufacturer and their address says suite 201, it’s unlikely that you’re dealing with a manufacturing plant. A good sign however, is if they’re located in an industrial area, you want to make sure that the people you’re working with are honest business people.
So if you’re noticing any red flags make a note of this and then bring it up to them as the relationship evolves. To be a hundred percent sure you can always schedule a video call to see their production floor. If they keep putting your meeting off, that’s going to be a red flag and you’re going to want to move on. So trust your gut and trust your instincts on this.
Look to see how many years they’ve been in business. This is subjective. So for me, I look at it as if it were a job interview. If a candidate came to me and said, I only have one year experience, I would not be comfortable putting the fate of my own business in their hands. My personal threshold is three years plus because that indicates to me that I’m not going to have to mentor them and potentially pay for their mistakes. Quick tip is to also look at how niche the manufacturer is. If they’re creating lunchboxes on the one end and then tutus on the other, you might want to think twice. A manufacturer that focuses on one niche will reflect how much leverage they have on the purchase of their raw materials for one. And secondly, a niche manufacturer also means that their workers are good. Workers that focus on this one thing day in and day out will reliably produce quality items consistently.
Another way to do research is by using good old directories. One of the best ways to find a manufacturer is through finding a directory that’s specific to your industry. This is a very targeted way to find a manufacturer because the directory is going to be compiled of manufacturers that are within that niche. And if it’s a reputable directory, they’re going to have already done the vetting for you. If you’re having a hard time finding a directory specific to your industry, you can always try a general one. The key here is to make sure that the directory is reputable and not just a list of trading companies.
Another way to do research is by attending conventions. This is a way to take it offline and to see what’s out there in the market. You can either attend as an attendee or as an exhibitor. As an attendee, you can walk around and see what’s new and what’s coming out. As an exhibitor, you can have a booth and showcase your product and collect leads from potential manufacturers. If you’re unable to travel, you can always check out virtual conventions.
So those are three ways to do solid research. Remember, it’s important to ask the right questions when researching manufacturers. This includes their location, years of experience, and niche focus. Make sure to ask for references and follow up on them to ensure that the manufacturer is reliable and trustworthy. Finally, consider using a sourcing agent to help you find a manufacturer and manage the relationship.
Attend Conventions and Tradeshows to Find the Right Supplier
As mentioned above a good way to find a manufacturer is through conventions. Different industries will have a handful of go-to conventions. So right now with COVID actually going is impossible, but normally you would want to go in person and to meet the right people. Until we get this COVID mess sorted out, check out the convention exhibitor list to start getting in touch with manufacturers online. This actually ends up being more time efficient in the long run.
There are two schools of thought when it comes to how you should present yourself. On the one hand, you can introduce yourself as a small business, introduce yourself as a business owner who is extremely passionate about getting up and running, taking that approach leaves you a little bit more vulnerable to being taken advantage of. But on the plus side, you can also leave yourself open to allowing your manufacturer to be an amazing mentor and growing together.
The second school of thought is presenting yourself as a large business. Introduce yourself as a purchasing agent or a chief operations officer, rather than the founder. This makes your company appear established, which gives you leverage in negotiations. So when you’re negotiating, you could pass off blame and say, Oh, sorry, my boss didn’t approve of those numbers. This keeps your relationship with the manufacturer in good standing. And they’re less likely to take negotiations personally.
So now you know how to find a manufacturer from Alibaba, directories and conventions. What I would recommend is securing two manufacturers, establishing an emergency vendor so that if your overseas manufacturer is late, or they send you the wrong order, you can always use your local manufacturer. Local might be more expensive, but it’s important to have a backup option, even if it does eat into your profit margins. Just make sure that you know that they’re locally manufacturing, because if they’re also getting their stuff from overseas, then you might run into the same problem twice. Having a backup manufacturer also gives you leverage in negotiations.
Factors to consider when selecting a manufacturer for your business
So you’ll want at least three quotes. Once you have your manufacturers on your radar, you’re going to want to ask them these nine important questions.
So first of all, can they accommodate your custom order? Do they have the resources? Do they have the skill level to produce what it is that you’re looking for?
Secondly, what are their MOQ’s? So MOQ stands for minimum order quantity. Most manufacturers will only fill a certain order over a certain amount. So depending on who you talk to, this could be a thousand, or it can be 20,000, but you’re going to want to make sure that you’re negotiating these terms.
Generally speaking, it’s better to start with less inventory. That way you can test the market. And you’re not going to have to worry about storing or selling an unmanageable amount of products. I would also recommend that you don’t lead with this question. Okay. Don’t lead with what are your MOQs? Because this is a telltale sign of an amateur.
What are the lead times? Find out how long it will take to produce and to ship your items? This is important because you don’t want to work with the manufacturer that’s going to take three months to produce and ship your products. That’s because a long lead times leads to unhappy customers. People don’t want to have to wait for their order and they don’t want to have to wait for products to restock.
How much does it cost to ship your items? So if you’re ordering from China, for example, manufacturers that are closer to the coast will have less expensive shipping costs. For most shipping makes up a large portion of a businesses expenses, so you want to know this right off the bat so that you can be clear on how it might affect your bottom line and how it will affect the cost of your product.
Number five is what is the cost per unit. So as you’re negotiating the minimum order quantities, you also want to simultaneously negotiate the cost per unit. Remember that the larger the order, the lower the unit cost will be.
Next, can they grant you exclusivity if there’s tooling involved and you pay for that tooling, be sure that they aren’t allowing other clients to use the equipment that you’ve paid for. Other forms of exclusivity include territorial, market and total exclusivity. You should also determine who owns the mold and other equipment should you need to switch manufacturers.
Are there any setup fees involved? If you’re doing injection molding, there will often be a setup fee so you want to make sure that you’re asking this upfront.
What is their defect policy? Find out what the terms are if you receive an incorrect or ineffective shipment. Are you eating the cost of replacing the shipment or is the manufacturer accepting responsibility? Who should pay for the extra shipping and duties? You want to make sure that you’re getting a general sense of this to start, and then once you get more detailed in the contract, you can hash these details out.
Is a manufacturer sustainable and ethical. Find out about the factory working conditions. How old are the people working there? Do they get regular breaks? What’s your manufacturer’s policy on discrimination? In addition to your manufacturer being socially ethical, you also want to know how they impact the environment. How do they manage waste? Do they safely dispose of dirty water or are they just dumping it back into the ocean? Each industry will have a unique impact on the environment and humankind. So make sure that you’re doing your research and asking tons of questions.
The unfortunate truth is that large manufacturers sometimes see working with small businesses as a burden. Because they’re so used to dealing with large orders of thousands and thousands of units, manufacturers see working with small businesses as tedious, time-consuming and a low return on time investment. It’s important to keep that in mind so that when you’re reaching out, you’re not discouraged when they turn you down. Keep in mind that if you’re starting out with a smaller project, there will be someone out there who is willing to work with you. It just might take a little bit longer to find them.
And if you’re struggling to find a manufacturer that’s a good fit, don’t be afraid to reach out to a sourcing agent or a sourcing company like SINO Sourcing. They can help you find the right manufacturer and they can also help you negotiate the terms of your contract.
I hope these tips help and that you find a manufacturer that’s a good fit for your business. Just remember to do your research, ask lots of questions, and be persistent. You’ll find the right fit eventually.
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Working with Manufacturers to Develop Your Product Design
You’ve done your research. You found the manufacturer that you want to engage with, and now it’s time to get into the nitty-gritty about your design requirements.
Start by asking your manufacturer if they can create your designs. These people are smart, well-equipped professionals that can often handle the design of your products as well. Communicate your ideas through sketches, written instructions and reference photos. If a manufacturer has done something similar to what you need, you should also be referencing those.
If the design aspect is beyond their capabilities, you can visit fiverr.com or Upwork to find freelance professionals. Search for industrial designers, product designers… Let them know that the deliverable you require is a 3d rendering of your product.
For my packaging design, I went to a local 3d print shop and I worked with the designer there. This was useful because he not only made me the 3d file that I could send to my manufacturer, but he also did a 3d print. This made me feel confident before going into production, because I could see that the design and the dimensions were correct, so you might want to consider doing this as well.
The Importance of Control Samples in Manufacturing
Before placing an order, you’re going to want to get your manufacturer to send you samples. That way you can test the product before going into full production. So there might be a bit of back and forth on this, but once the sample comes out right, you’ll date and you’ll sign the sample. I recommend you keep two for you and send two back to them, do this so that if they send you a batch and the color or the size isn’t right, you can both refer to the approved sample. This is what’s called a control sample.
I made the mistake of not doing this. What happened with me is that my manufacturer sent me a shipment that wasn’t what I wanted, but it was still close enough. The next batch again was similar, but now even further away from our first approved sample. By the time I got my fourth batch, the colors and the dimensions were completely different from the approved sample. And then before I knew it, I was buying green packaging instead of blue.
What I should have done was issue a product approval waiver. A waiver or a conditional acceptance is an email or a document which communicates that there is a discrepancy with the order that should be fixed next time, but it’s still acceptable now. It States what’s wrong with the batch and also notes that if there’s any further deviation, the order will not be accepted. This is a record of acknowledgement that the order wasn’t what you wanted, but it’s still usable.
Successful Supplier Negotiation
Between the time that you get your sample and place your final order, there’s time to negotiate the terms. Here’s some tips when it comes to negotiation.
So first of all, have everything in writing. Having a record and contract eliminates any room for, he said, she said. Secondly, make sure you put yourself in the other person’s shoes when negotiating, this will ensure that the deal is fair for both parties. The point of your relationship isn’t to see how much you can squeeze out of your partner, but rather how do you mutually benefit? A mutually beneficial business relationship is a long-term healthy choice.
Placing a Successful Manufacturing Order
The final step is to place your order. So here are a couple of tips to make sure that this goes smoothly. At the beginning, you’re going to want to do a 100% quality control inspection. What I mean by this is you’re going to want to look at every single item that they shipped to you, to ensure that it meets your standards. After you know them for about a year, you can start relaxing the quality control. At that point, you’re going to pick out, say 50 from each box. And if they’re all good, then you accept the order. If there are one or two that are off, then you’re going to have to inspect the whole thing. Now, if you have a huge order and there’s a massive amount that is bad, you’re going to want to ship it back entirely, so as not to waste your time.
Here’s my final piece of advice. And it might be the most important piece. When you’re starting out, you might be thinking to yourself, I don’t really know what I’m doing. Should I be negotiating? I’m confused. I’m unsure. But I want to tell you this, you’re going to make mistakes. It’s not a question of whether you will or won’t, it’s guaranteed that you will make mistakes, but the most important part is that you enjoy it. Of course, you want to keep your eyes open and you want to perform as best as you can, but if we take a minute to enjoy what it is that we’re actually involved in and be present for the journey, we’ll find the opportunities and the success to us. If you think that this blog post is packed with tons of value, make sure to share it with your friends and read our other posts!
Frequently Asked Questions
What are three ways to do research to find a manufacturer for my product?
Alibaba, directories, and attending conventions are three ways to research potential manufacturers for your product.
Why is it important to vet manufacturers carefully?
Vetting manufacturers is important because they can have a significant impact on the cost, quality, packaging, and shipping of your product. It is also important to choose the right manufacturer because the process of bringing a new product to market can take a long time, and working with the wrong partner can lead to delays.
How can I use Alibaba to find a manufacturer?
On Alibaba, you can search for a similar product to your own and then connect with potential manufacturers through the site. It is important to look for suppliers that are gold members, have been assessed by a third party or Alibaba, and have trade assurance. You can also use filters to find a manufacturer that meets certain certifications and standards.
How do I know if a manufacturer on Alibaba is legitimate?
To verify the legitimacy of a manufacturer on Alibaba, you can look for indicators such as whether they are a manufacturer or trading company, their location, how long they have been in business, and how focused they are on a particular niche. You can also schedule a video call to see their production floor, and pay attention to any red flags that come up during your interactions with them.
What are some red flags to watch out for when vetting manufacturers?
Red flags to watch out for when vetting manufacturers include being a trading company rather than a manufacturer, having an address that does not match their claimed location, a lack of experience in the industry, and a lack of focus on a particular niche. If a manufacturer keeps putting off a video call or meeting to show their production floor, this may also be a red flag.
How do directories and attending conventions help me find a manufacturer?
Using directories and attending conventions can help you find a manufacturer by providing access to a list of potential suppliers and the opportunity to meet manufacturers in person.
What should I consider when looking for a manufacturer at a convention?
When looking for a manufacturer at a convention, you should consider factors such as the manufacturer's experience, the quality of their products, their capacity to produce your product, and their pricing. You should also consider whether the manufacturer is a good fit for your business, and whether they have the ability to meet your specific needs and requirements.
How can I save money while finding a manufacturer?
There are several ways you can save money while finding a manufacturer, such as negotiating prices, getting quotes from multiple manufacturers, and finding ways to streamline your production process. It is also helpful to do thorough research and compare prices between different manufacturers to find the best deal.
How long does it typically take to bring a new product to market?
The amount of time it takes to bring a new product to market can vary depending on various factors such as the complexity of the product, the manufacturing process, and the time required to test and refine the product. In general, it can take anywhere from a few months to a year or more to bring a new product to market.
How can I ensure that the quality of my product meets my standards?
To ensure that the quality of your product meets your standards, you should work closely with your manufacturer to establish clear quality control processes and guidelines. You should also communicate your expectations and requirements clearly to your manufacturer, and conduct regular quality checks throughout the production process to ensure that the product meets your standards.
How do I communicate my design ideas to a manufacturer?
You can communicate your ideas through sketches, written instructions, and reference photos. You can also reference any similar products that the manufacturer has made in the past. If the manufacturer is unable to create your designs, you can find freelance professionals on fiverr.com or Upwork to create a 3D rendering of your product.
What should I do to prepare for production?
Before placing an order, ask the manufacturer to send you samples so you can test the product. Once you are satisfied with the sample, date and sign it and keep two copies for yourself, while sending two copies back to the manufacturer. This will serve as a control sample for future orders. If there are discrepancies with future orders, you can issue a product approval waiver to communicate that the order is still acceptable, but any further deviation will not be accepted.
What are some tips for negotiating with a manufacturer?
Make sure everything is in writing and have a contract to eliminate any room for misunderstandings. Try to put yourself in the other person's shoes to ensure that the deal is fair for both parties. A mutually beneficial business relationship is a long-term, healthy choice.
How do I know if a manufacturer is capable of creating my designs?
You can ask the manufacturer if they have experience creating similar products or if they have the necessary equipment and resources to create your design. If the manufacturer is unable to create your design, you can find freelance professionals on fiverr.com or Upwork to create a 3D rendering of your product.
How do I ensure that my orders are consistent with the approved sample?
It's important to keep a control sample that you and the manufacturer both have copies of. If there are discrepancies with future orders, you can refer back to the control sample and communicate any issues through a product approval waiver. This will allow you to address any issues with the order while still accepting it, and also communicate that any further deviation will not be accepted.
What should I consider when negotiating with a manufacturer?
Make sure to have everything in writing and have a contract in place to avoid misunderstandings. Consider both parties' needs and try to create a mutually beneficial deal. Keep in mind that a long-term, healthy business relationship is more important than trying to get the best deal possible.