If you’re just starting your importing business there are essentially two places to find products: the internet and trade shows in China.
The advent of the internet has enormously reduced the barriers to entry for Chinese suppliers looking to expand internationally.Most importers who have even begun to explore importing from China know of Alibaba, essentially the eBay of Chinese Suppliers (the Chinese sourcing end of Alibaba is actually a miniscule fraction of their company- TaoBao is the real engine of the company). Sites like Alibaba.com allow Chinese suppliers to upload descriptions of their products/services they offer, add some contact info, and voila! They are now a company involved in international commerce. Finding a supplier is almost like looking for a restaurant to eat at on Yelp. Just enter in the type of product you’re looking for and Alibaba will return you dozens, if not hundreds, of suppliers (unfortunately there are no reviews separating the good suppliers from the bad suppliers). Your next step is to email the supplier, ask for some prices, and hopefully prepare an order. See our Unofficial Guide to Alibaba here.
Jack Ma, Founder of Alibaba. In a money crazed society like China, Jack Ma is one of the most recognized celebrities in China.
Alibaba is a good way to start (although my preference is still trade shows). It’s how I started. Once you’ve found a supplier who you feel comfortable dealing with, who has reasonable prices, and who can meet your minimum order requirements you can arrange for a small trial order.
There are some drawbacks to using Alibaba. Which are:
- A strong proliferation of trading companies opposed to factories
- Difficult to prove legitimacy
- More difficult to establish a relationship (and prove you’re serious)
- Higher competition between buyers
Alibaba tends to attract many Suppliers who are trading companies opposed to factories. You know how eBay and Amazon has many third party sellers who simply drop ship orders? The same thing happens on Alibaba where a middle man will advertise another factory’s products on Alibaba but not actually produce them. This isn’t always bad, as it’s often easier to deal with a trading company opposed to a factory. However, it normally results in higher prices.
Alibaba also makes it difficult to prove legitimacy. First, although Alibaba and others have instituted more serious credential checking methods, scammers still exist on Alibaba (most famously in a 2011 fraud scandal). This isn’t to say you won’t come across scammers in other channels, they’re just more prevalent on the internet. More so, it’s difficult to prove the company who gives the impression that they are one of the leading manufacturers of horse saddles isn’t, in reality, just a guy who knows a guy who knows a company that makes some horse riding items. Inflating credentials is a very common with Chinese suppliers.
As I always stress, one of the biggest competitive advantages you can create as an importer is your relationship with your supplier. As with internet dating, eventually you need to break past short messages and emails with the other person to establish a real relationship with them. Continuing the analogy, for Chinese suppliers, advertising on Alibaba a is a lot like a girl with a dating profile on PlentyofFish.com. They might get a hundred messages in a day, but only a very select few will actually transpire into anything. More threatening for the supplier is their Chinese competitors who regularly pretend to be foreign buyers simply to get their latest price sheet. The result is the suppliers are likely to give you a standard, highly-inflated price sheet and limited information and they won’t exactly be fighting for your business.
Finally, there is intense competition for the Supplier’s business on Alibaba. There could be dozens or hundreds of buyers similar to you trying to buy the same products from the same Suppliers as you.
China hosts thousands of trade shows for every niche and industry imaginable (one of these fairs alone, the Canton Fair, hosts thousands and thousands of suppliers of almost every imaginable kind). Finding Chinese Suppliers from trade shows has several advantages:
- Easy to identify legitimate Suppliers
- Easier to prove your a serious buyer
- Easier to quickly form a relationship with your Supplier
When you meet a Supplier at a trade show, you can almost certainly be sure these are legitimate, real companies and not scammers. With that being said, credential inflation is common, even at trade shows, i.e. “We work with Walmart, Home Depot and every other major retailer in the universe”.
One hall of the Canton Fair. Actual fair consists of dozens of halls divided into three, 5 day sessions.
Second, by showing a foreign face, these companies will be eager to work with you. They will assume that if you took all of the effort to travel to China to visit a trade show, you must be a serious buyer with a serious company. They will also have no fear that you are a Chinese competitor trying to steal their ideas and prices and be more willing to give you serious prices rather than overly inflated prices.
Finally, by actually meeting your Supplier in China, your relationship with them will take an immediate leap frog forward. Although you may only talk to them for a few minutes, as we only know, meeting someone face to face creates a closer bond than emails ever can.
Trade Shows Without Going to China
Directories of Trade Shows can be a great place to find Suppliers.
Another way to find suppliers through trade shows without actually going to China is to view the website of a particular show and browse through the exhibitor list. Directories like China Exhibition list hundreds of industry trade shows occurring across China. Once you go to the website for these shows, there will often be an Exhibitor List where you can find the websites for these prospective companies. Through this method you might also be able to find companies who are not advertising on Alibaba (which will reduce your competition when selling). Browsing a list of trade shows can also be a great way to brain storm for new products. Looking at the screen shot from above, who would ever imagine there would be something like the International Ice Cream Industry Trade Show?!
Other Sources: Sourcing Agent, Customs Records
Sourcing agents are third parties who can help you source various products from lesser known factories in China. Normally such agents are based in China or are Chinese living in Western countries. One of the first products I imported was for a product that recently had its patent expired and a sourcing agent in Vancouver helped me to arrange to have the product copied perfectly. Sourcing agents are normally used when you have a customized or semi-customized product, and not for a generic off-the-shelf item like socks or picture frames.
Sourcing agents can help find factories that don’t advertise on the internet and English based directories. They normally have a connection with a number of factories and specializing in industries, i.e. textiles, or materials, i.e. stainless steel. Often they will simply oversee the entire manufacturing process to your doorstep and will keep the factory they’re dealing with more or less anonymous. In my experience, these agents are around 25-50% more expensive than sourcing from a factory direct but the quality is generally much better and more reliable. To get an idea of the services sourcing agents provide, Certain Supply is a sourcing agent based in Vancouver (I have no direct experience using them and I list them strictly for reference purposes).
Pros and Cons of Sourcing Agents:
+If you need a customized or semi-customized product, they can help eliminate communication problems
+Less chance of getting low quality items
-Considerably more expensive
-Not ideal for wholesaling off-the-shelf items with little customization
By doing competitor research through a tool such as Import Genius you can reveal the Suppliers of your competitors. There are similar tools to Import Genius, and they are a site sponsor, but they are the best of the tools I’ve used.
These tools use public import records (mainly in the United States). You simply enter in the name of your competitor’s company name and it will reveal all of the import records for the past several years. What I will often do is download all of the Suppliers for a particular competitor from Import Genius, sort this as a pivot table in Excel, and then try and find the catalog or website of each Supplier. Not only does it help to find credible Suppliers, it also helps to brain storm for products.
Other Sources for Finding Suppliers?
Have you had success finding Suppliers via any other channels? If so, share them in the comments below!