Should I Manufacture Domestically or Try Sourcing Products in China?
Manufacturing domestically may appear like an easier alternative for your business when compared to sourcing products from China. Sourcing products from China still maintains important benefits when compared to domestic manufacturing.
Even after considering freight costs and shipping times, businesses will often find shorter lead times and overall lower costs when sourcing products from China. Domestic manufacturing often struggles to provide production volume at competitive pricing, since US manufacturing isn’t as developed as China manufacturing is.
It’s simply easier, faster, and cheaper to get a large volume of products from a China-based supplier. Unlike most domestic manufacturers, you can start with smaller orders and scale with the same supplier, since many high-quality sellers have flexible MOQs.
Do I Need to Speak Chinese for Product Sourcing in China?
You do not have to speak Chinese in order to source products from China. Of course, being able to speak Chinese will present communication and cultural barriers that have to be overcome in order to successfully place an order.
If no one in your business speaks Chinese, using a sourcing company with a presence in China that can communicate in English and Chinese will offer significant advantages. A sourcing company that is in China and can speak Chinese (like Kanary) can help make sure your product order is accurate, can more easily negotiate favorable terms, and can help to build lasting relationships with high-quality suppliers.
What Are the Best China Sourcing Websites to Use?
Is Alibaba Reliable For China Product Sourcing?
Alibaba is far more reliable than other product sourcing platforms you may come across online. It’s the largest sourcing platform in the world and has connected thousands of clients and suppliers. The difficulty in using Alibaba, especially for inexperienced businesses, is finding trustworthy suppliers and avoiding scammers and trade companies. Most people ask their friends “is Alibaba legit?”
If your business is looking to seriously scale with China manufacturing for the first time, a sourcing agent, like Kanary, will help you to avoid beginner headaches. We can help businesses avoid scammers, save time, and get the products they need at the best prices.
Can I Use Alibaba For Product Sourcing In China?
- Asking you to make payment to a personal account of any kind.
- Asking you to make payment to an account that does not match their Alibaba profile.
- Asking you to make payment outside of Alibaba’s official payment service (this will disqualify you from Alibaba’s payment protection).
- Asking for payment in full before products are delivered (it is rare that you will need to pay the entire cost of your order upfront. Usually, you’ll pay a deposit).
What Are Popular Products For Sourcing In China?
- Packaging
- Heavy machinery
- Farm equipment
- Pet products
- PPE products
- Consumer electronics
- Construction materials
- Packing machinery
- Chocolate machinery
- Child resistant packaging
- Promotional products
- Clothing and apparel
Why Is Sampling Important For Sourcing In China?
Sampling is extremely important when sourcing from China. Without a physical sample, there is no way to confirm that your end product is exactly what you want before you go into mass production. 9/10 times, you will need a physical sample to make sure the product is ready for manufacturing.
When you have your physical sample, you can provide feedback to the manufacturer that you wouldn’t be able to provide by just seeing pictures or video of the product. For example, you can thoroughly test the functionality and durability of the product in person, but not through pictures or video. Also, colors may appear differently in pictures and video than in person.
By having several sample rounds and catching issues early, it allows for the mass production phase go smoothly without major problems.
How Has COVID Impacted Product Sourcing in China?
COVID has made a huge impact on product sourcing in China. It is far more difficult to plan shipping logistics than it was before 2020, and many inexperienced businesses are caught off-guard by freight prices and shipping delays. Here are some new challenges caused specifically by COVID disruptions:
Sea Freight Prices Have Exploded
When COVID hit the U.S., the demand for products plummeted. Many businesses struggled to stay afloat, while others significantly reduced their standard orders and available inventory. Then, when the economy suddenly sprung back, demand for China product sourcing exploded, but the demand happened all at once.
That means more businesses than ever were competing for a limited amount of shipping containers. When demand for a limited supply spikes, the price spikes with it, leading to record high sea freight prices. This is why it’s more important than ever to take advantage of consolidated shipping, as it will help keep your sea freight costs under control.
Manufacturing Delays
COVID hit China first, leading to the entire manufacturing industry almost coming to a complete halt. Then, when manufacturing opened again, there was very little demand for products as COVID wrecked havoc on domestic business and demand. However, in a similar story to sea freight, demand for China manufacturing flooded in all at once.
When you combine the issues of keeping in-person labor staffed and safe from COVID, along with factories scaling down production due to low demand, and then suddenly facing an unprecedented surge of demand, manufacturing delays have become a huge issue.
This means issues with communicating product specifications or quality control can mean months of delays for your order. Partnering with Kanary can avoid the mistakes that can cause huge delays, and we can help you find a manufacturer that will be the best fit for your timeline and product needs.
Congested Ports
High Demand for Sea Freight Containers
Even before COVID, it was always best practice to book your container weeks before you anticipated your products to ship. Now that demand for sea freight containers is so high, you sometimes need to book containers months in advance or be prepared to organize temporary storage.
Again, the increased demand for sea freight containers has caused their pricing to rise, which has made the need for consolidated shipping logistics even more important.side of a div block.
How Do I Calculate Landed Costs For Product Sourcing In China?
Your landed costs will depend on the kind of shipping or freight you use. Here are the three calculations for air express landed costs, air freight landed costs, and sea freight landed costs:
Air Express
Calculating landed costs for air express is very straightforward, all you need is:
Manufacturing costs + shipping = air express landed cost.
Air Freight
Air freight requires more financial factors in order to calculate the landed cost:
Manufacturing cost + air freight to the US + duties/taxes + customs clearance + local delivery costs = air freight landed cost.
Sea Freight
Finally, here is the calculation you’ll use to determine sea freight landed cost:
Manufacturing cost + estimated door-to-door shipping + duties and taxes = sea freight landed cost.
Can A China Sourcing Agent Help With Shipping and Importing?
Not all sourcing agents will be able to help with shipping and importing. This is especially true of sourcing agents based in China who may not regularly deal with international shipping or may be inexperienced with shipping to the U.S. If you need help with shipping and importing, you should choose a sourcing agent based in the United States, like Kanary.
Kanary offers the best of both worlds. While our main office is located in the U.S., we also have an office and team based in China. This, and our collective 40 years of experience, allows us to handle sourcing, shipping, importing, clearing customs, and final delivery to our clients.
Why Use A Sourcing Agent In China Instead of Working Directly With Suppliers?
Essentially, working with a sourcing agent, instead of working directly with suppliers, allows for greater peace of mind and a streamlined sourcing process. A sourcing agent, like Kanary, functions more like a partner than a vendor (suppliers). A supplier will know two things: how to sell you the product and hopefully (if they are an actual manufacturer and not a trade company) how to manufacture a product in China.
A sourcing agent will have a team on the ground to deal with the suppliers on a day to day basis. They can also help to coordinate shipping goods from a variety of suppliers in the most cost effective manner, can organize on-site inspections and sample shipments, and basically is able to handle the entire sourcing process from first-contact with a supplier to final delivery.
How Can Kanary Help My Business With Product Sourcing In China?
Kanary can help with product sourcing in the following ways:
- Performing due diligence on manufacturers.
- Lowering existing costs with suppliers.
- Assisting with customization or creation of unique products.
- Performing onsite factory inspections, quality control and price negotiation.
- Assisting with streamlining the shipping process.
- HTS research to make sure correct duties/taxes are paid.
- Assisting with custom clearance and scheduling local delivery.
How Can A China Sourcing Agent Help With Quality Control?
A China sourcing agent will have unique tools at their disposal that will help to monitor and maintain quality control. Most China sourcing agents, including Kanary Inc, have a team in China that will visit your manufacturers to oversee the entire production process.
This allows us to inspect materials at the point of purchase before assembly, and it allows us to directly supervise the assembly process to correct issues early on before major problems occur. Having a physical presence at the factory during production is the only way to guarantee that quality control is maintained.
Kanary Inc. also conducts thorough rounds of sampling long before mass production begins, which helps us to minimize quality issues that would otherwise arise.
Why Hire A China Sourcing Company To Oversee Your Supply Chain?
- A streamlined procurement process
- On-site quality control with our China-based team
- Consolidated shipping logistics to lower shipping costs
- Supplier negotiation to get the most favorable production terms
- A streamlined shipping and importing process
How Can A China Sourcing Agent Help Lower Your Cost?
The expertise of a China sourcing agent, like Kanary, can lower your costs in a number of surprising ways.
Supplier Negotiation
Consolidated Shipping
If you’re ordering several different products from several different suppliers, a key way to keep your shipping costs low is to organize consolidated shipping. This technique coordinates different suppliers, temporary storage, and port loading to make the most efficient use of container space as possible.
The logistics of consolidated shipping are complicated, and many businesses aren’t able to use the strategy because they lack the experience or time to do so. Kanary has a cumulative 40 years of product sourcing experience, including regularly planning and implementing consolidated shipping strategies for our customers.
Research the Right HTS Codes
HTS codes are what U.S. Customs use to determine the duties and taxes that will be applied to your products. It is crucially important that the right HTS codes are used. If you chose the wrong codes, one of two things happens:
1. The code applies a duty or tax that is far higher than it should be, unnecessarily inflating your costs, or…
2. The code applies a duty or tax that is lower than legally required, which will result in hefty fines from U.S. Customs, as this is seen as tax avoidance.
Some suppliers will apply HTS codes for you, but they often apply the wrong codes. The experts here at Kanary having been researching and applying HTS codes for clients for decades, and we can guarantee the right codes are used every time.
Unique Solutions to Lower Overall Costs
Sometimes, creative thinking is needed to help lower costs with a supplier. If there is a language or cultural barrier, or if your business just doesn’t have the experience to create novel solutions, then you’ll face higher pricing.
Kanary has the experience to strategize with suppliers to create unique solutions that benefit both the supplier and your business.
How Can I Reduce Payment Risks By Hiring a China Sourcing Agent?
When you use a China sourcing agent, like Kanary, you don’t pay suppliers directly. Instead, you pay us to handle the entire production process, which includes delivering payment to your chosen manufacturers. You don’t have to worry about payment risks because we assume that risk for you.
We know how to avoid payment scams, but in the event we fall prey to one, you don’t eat the cost. We do. If you pay suppliers directly, you’ll have to do your due diligence to make sure you don’t fall victim to a payment scam.
Remember, there are other risks you assume aside from getting outright scammed. A low-quality supplier may bait and switch the overall price, they may send you poorly assembled products, and they may even use the wrong materials to make your products. Avoiding payment scams is important, but it’s not the only fraud you need to keep an eye out for.
