Product Sourcing outside of China is possible. You can and have to fight the increasing sourcing struggle in China now. I planned to write about sourcing alternatives a bit later in the year, however, due to current affairs, the topic is urgent. Let me give you some reasons why and how to source from other countries than China.
Advantages of Sourcing in China
To say it up front, I love China. I graduated with M.A. in Sinology (Chinese Studies), lived in Taiwan and travelled a lot to China and through Asia. To source products from China has many advantages.
First of all, I have to mention the price! The manufacturer’s flexibility has increased tremendously over the past years. Any Sole-Trader can rock up with a mould-request and it will be done. Service and quality are getting better by the day, especially with foreign pressure and external inspections.
Why you should be scared of product sourcing in China
A lot of young sellers with small start-up capital skip inspections. This is the moment trading companies are waiting for. They sell goods that were rejected by other customers. I’m not saying they are scammers, they are just trying to make a living, like you and me! Still, that means, I highly recommend an inspection even if your order is only as small as 100 units. The risk of low-quality items that go straight to the amazon warehouse is terrifying. You could lose your account in an instant. Is it worth risking suspension over $200USD?
Fact is also, that Chinese manufacturers are becoming competitors rather than a supplier. You must be completely out of your mind if you let your supplier produce your item, pack it, label it and ship it to Amazon. You may as well just send him a letter with your ideas. I’m not saying all suppliers are the same. But the risk of copycats or hijackers immediately after or even during your launch is not a surprise if your supplier fulfils the whole supply chain. You must separate your production process if you want to have a chance to become successful.
The US tariffs on Chinese goods have added up 25% on top of the usual prices. Most sellers only realized the extra cost when they were hit with a customs bill. Both options, increase sales price or bite the bullet and swallow the cost, making them a loss. Trying to find another cheaper supplier in China is almost impossible or implies the risk of lower quality.
Doesn’t 25% on top of your usual buy price make it worthwhile to look for suppliers outside of China?
The Coronavirus shows one more time how dependent Sellers/ retailers are from product sourcing in China. Personally, I do not think the virus is as dangerous as the media makes out. The fatality rate is extremely low, especially compared to the common flu.
Anyway, sellers running out of stock, reordering is impossible, because China is on hold. This impacts all kinds of sellers, big retailers and wholesalers as well as Newbies. People lose customers, ranking, and a lot of money. And who knows at what time in the future everything will go back to normal and for how long? What’s next?
Changing the source
Yes, China is the biggest manufacturing country in the world, but it’s not the only one. My students start this journey because they want to be independent of their current job and boss. They want to be their own boss. I ask them, why in the world are you making yourself dependent on one supplier in one country? The world is a massive place. Everything produced in China, you find somewhere else as well. Textiles from Cambodia or Turkey, Tech from Taiwan, Malaysia or Thailand, craft items from Vietnam, cosmetics from the US, EU, glassware from EU.
Experts keep saying India will be taking it’s deserved spot in the top manufacturers for tech, textile and other goods. The knowledge and labour in India are impeccable. I have been sourcing from India from the very beginning of my journey and love the goods, love the service and quality. If you have not looked into India yet, please do so you will not be disappointed.
How do you find suppliers outside of China?
Once you have decided on your product, you can still use the commonly known wholesale portals like Alibaba or DH-Gate. Most people don’t know about it, but you can choose the country you want to source from within these platforms. Especially since some products are not even Chinese original, that only makes sense. Suppliers from other countries (worldwide) list their goods. Those non-Chinese manufactures may not be part of Trade Assurance, but you can use a simple safe deposit or PayPal as secure payment. Most credit card companies offer secure insured payment methods as well. Most foreign companies do not list their whole catalogue, you have to contact them to them.
Have you ever tried Google for product resources? It’s a bit more work, but it gives you great results. Just click on a few listings, Google is smart enough, they will display you similar companies you can check out as well.
If you are completely stuck look for a sourcing agent. A good sourcing agent doesn’t need to be in the country you are sourcing from, he needs to be master of his niche. That way he knows unpublished sources how to find suppliers, get great deals, knows onsite inspection agencies and necessary certifications. Again, you can find sourcing agents on Alibaba, at big fairs or by personal recommendation.
The first step to find new suppliers is to be open and experiment. The world is a beautiful place with many national specialities, where you can source products from. This way you are not only growing independent but differentiate from other sellers and their boring products Made in China! If you like to know more about sourcing from other countries, check out my courses or book a consultation.