Sourcing from Chinese Suppliers – Should or Shouldn’t I?
China shipped US$2.119 trillion worth of goods around the globe in 2016, up by 76.3% since 2009 when the Great Recession kicked in
For many years, there are various misconceptions when dealing with Chinese suppliers. But the fact remains that China’s exporting industry has developed tremendously since the 80’s. In 2010, China was nominated as the biggest exporter in the world (passing Germany, the previous world export leader). A great deal of manufacturing and assembly work is done in China. From clothing apparel, electronic products, down to toys and other gaming devices. China has grown to be the center of sourcing and manufacturing of products which are being shipped to various parts of the world.
What are the advantages of sourcing products from Chinese suppliers?
There are many advantages of sourcing products from Chinese suppliers especially to those who venture in the line of drop shipping arbitrage business.
Low Costs. The low labor cost in China offers great cost advantages in manufacturing. With this in mind, you know that the final product sells fairly cheap in wholesale and even retail prices compared to products manufactured in Western countries.
Improving Quality Standards in the Chinese Market. Through the years, China has developed greatly in terms of technological sophistication and capabilities. With these developments in the manufacturing system, Chinese suppliers are able to focus on quality while meeting the quantity demands of the market. With great focus on quality, products made in China are able to compete in the market in terms of worldwide quality standards.
What are the disadvantages of sourcing products from Chinese suppliers?
Negative impression on Chinese Products. The most obvious disadvantage of sourcing products from China is the stigma that comes with Chinese products. There are always negative comments but nonetheless, people these days are disproving many misconceptions on products made and China and has proven through time that products sourced from China are at par with worldwide quality and standards.
Shipping had been an ongoing issue when sourcing products from China. The main concern is the cost of shipping and time it takes before you actually receive your products at your doorstep. Typically, shipping by sea takes at least 30 days but the cost is a lot cheaper than shipping products by air which is much more expensive and may double the price of your products when sold in retail.
Quality could sometimes be an issue which is actually the root source of Chinese products stigma. According to studies, sourcing electronic products from China calls for higher risk in terms of quality as compared to sourcing textiles such as clothing where the risk is lower. So you might as well consider what type of products you plan to source before even starting your reseller business.
Where to find reliable Chinese Suppliers?
The key to success when sourcing products from China, is to find reliable Chinese suppliers. Meaning, choose a supplier who has established a good reputation for manufacturing wholesale products.
Aliexpress had grown in popularity among buyers and drop shippers. The site provides various reliable Chinese suppliers in both retail and wholesale business. Like any other e-commerce platforms, Aliexpress had been founded to help people find quality products and to avoid dealing with scammers.
This year’s shopping festival entered new territory, blazing past $1 billion within two minutes of the holiday, starting at midnight on Saturday. By the end of the day, sales had hit a new record of $25.3 billion, more than 40 percent higher than sales on Singles Day 2016.
Tiffany Hsu, NY Times on 2017 Alibaba’s singles day
What is Aliexpress?
Aliexpress is a sister company of Alibaba, a multi-billion dollar company founded by Jack Ma. Alibaba caters to wholesale buyers while Aliexpress caters to smaller retailers who don’t stock the products they are selling. It works like Amazon however the prices are cheaper with a delivery time of about 2 weeks and it has the perfect platform for drop shippers.
How to determine a reliable supplier in Aliexpress?
Just like Amazon and eBay, Aliexpress rates their sellers and makes it visible to buyers. Here are some determining factors for a reliable seller.
Look for these indicators to find a reliable seller:
- Look for the small diamond or crown icon. This indicates that the seller can be trusted.
- Look for a satisfaction rate of at least 95%. This means the seller has low complaint rate.
- Look for products that have a complete description.
- Look for positive comments. Comments from international clients are most helpful.
Trust Indicators in Aliexpress:
- Medals are given to basic level sellers.
- Diamonds are given to good sellers with high sales and low rate complaints.
- Crowns are given to excellent sellers.
It is safe to order from sellers with diamond indices. If you really like a product from beginners with less than 5 medals, look for positive comments about the seller and product description. It can still be risky to make orders from beginners.
ePacket Delivery System
Every drop shipper knows that shipment and delivery are essential to the business. The longer the waiting period, the higher the chance that customers are going to cancel the order. Therefore, next day delivery is ideal. However, for goods coming from China or Hong Kong, this is unlikely due to distance and time difference.
In the past, the shipping process from China was done through the sea only which results in delivery of up to 2 months and even more. But shipping processes have evolved. Now there is what they call ePacket delivery service which cuts down delivery time from 2 months to 2 weeks or approximately 12 to 14 days.
ePacket delivery service also provides a system for customers to be able to track their orders’ shipment development. The delivery service had been only available for orders going out to the United States. But now, it is available to about 30 countries in total.
How to list products directly from Aliexpress?
- If you have an e-commerce website or an eBay store, it is easy to list products from Aliexpress using a third-party application like DSM tool.
- These applications allow you to choose the best selling products in your niche. You get to add it to your store with just a few mouse clicks.
- When listing a product from Aliexpress. Make sure to consider the fees involved and your target profit when establishing your final price.
- Make sure you are listing a product from sellers who offer ePacket delivery service.
Check out The Right Way To Work With Aliexpress to help you configure your setting.
Drop shipping from Chinese Suppliers is a good option, especially if you are sourcing your products from trusted companies like Alibaba and Aliexpress. While the downside is the delivery time, customers won’t really mind if the price is competitive and if the product is of great quality. So for any beginners in the dropshipping business, consider Chinese suppliers from Aliexpress in your list of suppliers. There is nothing to lose and a lot of money to gain.
- Kfir is a Co-Founder and the CEO of DSM Tool. He is working with eBay since 2008 and 8 years later in 2016 joined the founding team of a revolutionary drop shipping management platform - DSM Tool. He has a B.A in Business and Entrepreneurship from IDC Herzeliya. Kfir also plays the drums and owns a dog named "Bamba".