How To Source QUALITY Products From China – Working With Chinese Suppliers
In this article, I’m going to show you our process for sourcing quality products from China and how to properly work with Chinese suppliers to ensure you get the best products done the way you want them, on time and without any issues.
This is one of, if not the most important part of your business because after all, what you’re selling is everything. And the value you bring to the market with your product determines that level of reward that you get back especially in the long term.
I’m really excited to share this with you, so come with me and I’ll give you a quick presentation and show you some cool diagrams to explain how this works.
Source the Product
Now, I want to explain how to properly source a private label product. The first thing I want to mention, though, is that it can be incredibly simple and easy to start. You don’t have to do this whole process. You can just buy 10, 15, or 20 units of a generic item, put it in a plastic bag with a note in it and that’s it – if you want to start that way to really validate even further.
Even if you’ve found a winner, maybe you want to test it now with 25 units. You can continue and now build a good listing. But the product can be incredibly simple. And it can be very quick to source it, requiring very low investment.
It’s enough to now start making some money and to really, really validate the opportunity even more before you invest into it.
I generally recommend doing this. Again, most people do it backwards. I would much rather focus on the research and validation, and then start off light with multiple products. Starting simple and light to really prove the concept fully before investing into it.
So you can’t build a good, realistic plan, for example, unless you know or you have very good reason to believe that something is going to work because you’ve tested it. So I wouldn’t invest a lot of time and resources into a whole bunch of products unless you really, really tested it.
The validation process that I showed you in the previous two articles (How to Find an Excellent Chinese Manufacturer and How to Pick the Best Private Label Product), the step-by-step process to identify the product, is actually enough to validate and then dive right into this if you want.
But you can also choose to start small, let’s say with 50 generic items in a bag with a sticker on it. The products should look good, of course, so people won’t be unhappy about them. You can either go all the way to private label, or you could go straight into it with this slightly easier technique. It’s really up to you.
You’ll probably make this decision based on your situation; whether or not you’re new to this business, how much money you have to invest, etc. But anyone can start very, very simply and easily. That’s my point. But if you want to do full sourcing of a private label product, then this is the process that we use.
And I will tell you that this is a bit of a lengthy process. This isn’t the simplest thing in the world to do properly which is why I have a team of people doing this for me. I’ve always had sourcing agents to help, and I recommend you have them as well. I’ve taught most of my one-on-one clients to do that. It is just absurd not to have sourcing agents if you’re selling any volume of products because you’ll make way more money with this help.
Not only will you save money on the initial phases with a sourcing agent, but this will also save you so much time and energy, and make you way more effective. It will open up this huge pipeline in your business.
You will be able to scale and grow much faster and it’s just game changing, right? That’s both in terms of product quality and issue prevention.
I’m going to give you a high level overview of the process here. By the way, our Infinity Code members get these handouts as PDFs so you can print it out if you want, but I hope you can still see this here. So we start with the sourcing data and evaluation. And I’ve already kind of walked you through that in the last article here as part two of the identify the product phase.
So once you have a couple of suppliers that you like, the data looks good, and communication is good, you will pick a couple of samples from those suppliers. You want to get a sample from each one. And then you’ll want to collect those samples, test them and compare.
And again, a sourcing agent could collect it and send it all to you in one package, work which will in turn generate more than enough to pay for that sourcing agent. You can also just hire someone part-time versus having the suppliers ship all of these samples internationally, independently to you. And a sourcing agent can even filter them out for you.
So you want to test the samples. You want to compare the samples and you want to inspect the factory, then, based on those samples. A sourcing agent can also do that for you. You could also do it virtually if you’re not using a sourcing agent. Or, you could do it through Alibaba verification and reviews, and things like that. But you want to have some good reasons to believe this is a really good, legitimate supplier because you also want to be able to tell apart trading companies through the actual manufacturer at this stage.
When you have that product opportunity identified, you want to then craft that idea further into a private label product with edge, so it has something to really capitalize on that flywheel I talked about.
But now, that aside, you want to make sure that the test, the samples, are all aligned with what you wanted to build here. Like I said, you want to inspect the factory. From the sample stage, you pick one factory to go with, and then you inspect it. And if the factory passes that stage, the next thing to do is to form your order with them.
You need to decide exactly what it’s going to look like. Are you going to provide your own packaging? Are you going to organize your shipping? Do you have another component coming from somewhere else? Who is going to sample all of it? What exactly is it going to look like?
And now, with the product itself, if you have crafted a private label product with edge, you need to make sure that all those things that you may have added are in there – the things that make it stand out.
Everything needs to be on a pro-forma invoice. That’s one of the most important things that I’ve learned when sourcing – you get this pro-forma invoice, and it’s like an order ticket for the chef in a restaurant.
If something is missing from there, don’t expect to receive it. So you want to make sure everything is written down.
If they don’t deliver on that, you can show them the pro-forma invoice and they have to redo it for free. If you don’t have that on paper, there’s nothing you can say, right? Because you’ll have no proof. So make sure you get that down.
Then you make, usually, a 30% deposit and the product goes into production. Now, it’s going to depend on the lead time how long it takes – usually it’s like 15 to 30 days, especially for people on the ground with some influence in China. This could be from anywhere by the way, not just in China. And then you make the full payment after you make the inspection.
After the production is done, you’ll want to inspect the product. And you could even do this virtually sometimes, if you don’t have an agent.
If you’re sure everything is done and ready, you pay in full. Then you go into shipping, which you could organize yourself or through the factory with their help. Now you’ve got the shipping stage and that’s it.
So one thing I want to mention really quickly here is about product quality. It must be good for long-term success on Amazon. You can’t sell crap. It’s going to show in reviews and it’s going to just get killed, and Amazon might even kick you out. So you have to make sure the product quality is A+ if you want to have really good, long-term success on Amazon.
Product packaging is the easiest way to stand out with private labeling. If you want to have a product with edge, packaging is the easiest way because now you really stand out and you can show this in your images and everything. And it’s really the best way to brand, too. So the unit itself inside the box could be pretty much the same as what somebody else has but, for example, with this packaging, you would really stand out. And heck, I would even buy this product just because of the packaging. It looks so cool.
Product inserts, like I mentioned previously in this Crash Course, is a way you can collect leads and send customers into your own funnel. So on these inserts, you could put any information you want. You could ask people to sign up on your site to claim their warranty, then capture their email address. You can just have a contest entry process or link to get news or information, or a bonus, or what have you. Anything you want, you can do.
You could promote another product you have on Amazon or even a service you have on your site or something.
This is your chance to market the product and have an opt-in to build your own list and create your own funnel on your own site.
So this is the way to now build your own website up and get more traffic to that website. The best way to do it is to start on Amazon, build it up and then sending people naturally like this through your products to your own website.
And maybe they can buy directly from your website if they want to buy it again. This is very powerful and Amazon cannot complain about anything that’s inside the packaging of your product. They can complain about some other things, but this is fine.
For shipping, keep it very simple to start with. I recommend that you just have your supplier arrange shipping by air or by FedEx or DHL or something similar from China. Or if you’re domestically, shipping through Amazon’s partnered carrier, UPS, is going to be the simplest.
Just know you’re going to be paying more for this kind of stuff; even your supplier might charge you to help you with that. But don’t worry too much about shipping in the early stages; keep it simple and fast, even if it means you’re less profitable just to get the product up and running.
Then, later, when it’s really stabilized and selling well, you can start scaling into shipping by sea. You do this while simultaneously upping your order quantities. So you’re getting lower prices per unit because you’re ordering more at once. Now the shipping time is way longer but you can order more units.
So you can really stock up and get into a different rhythm, a different cycle with your inventory orders and inventory management and shipping because you’re ordering bigger orders, or more products at once. It takes longer to ship but you’re still always in stock, right?
And the number one rule on Amazon is never run out of inventory. Rule number two on Amazon is to never forget rule number one. So it’s really important that you manage this properly.
So when you scale, that’s when you can do shipping by sea. I wouldn’t recommend it to start with because it’s going to be too slow of a process for you to really get the product up and running and scaled up. But once it’s stabilized, then it’s perfect.
Then you can oftentimes cut your costs by half or even by 70% and truly, dramatically improve your product margins in the long run.
If you can have 30% or higher with shipping by air and everything in the beginning, well this product is going to be super profitable once you scale it up and stabilize it.
Now, that’s it for the sourcing part. I just wanted to keep it really simple for you to give you a high level overview of it. Again, to start I would recommend if you’re especially on a low budget, just keep it super, super simple and don’t fully private label so you can start with a low, low MOQ. Just take a very minimal amount of risk until it’s really proven and profitable.
I hope you enjoyed the insights in this article. Don’t forget to share it with people who would be interested, and feel free to connect with us on Facebook.
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