Michael Fox

Michael Fox

Friday, 07 January 2011 14:01

Michael Fox: How to Find a Supplier - Product Sourcing

I'm looking to source a product from China. Do you have any tips for me?

I'm looking to source a product from China. Do you have any tips of suggestions on the best way to go about doing this?


This is a good question. Finding a good supplier who can provide exactly the sort of product you're looking for is a critical step for an online retail business.


The best way to go about finding a good supplier depends on the type of product you're looking for.


1. Standard product, low to mid-range quality

If your product falls in this category there are lots of great options available to you for sourcing. There are plenty of places to go online to source standard, low- to mid-quality products.


Visiting www.alibaba.com - the world's largest sourcing website – is a good place to start. There are also a number of trade fairs in Asia where you'll be able to find these sorts of products.


The Canton Fair is the world's largest trade fair and is held twice a year in Guangzhou, China. It's absolutely massive with suppliers of just about every standard, low- to mid-range quality product showing their wares at the fair.


If you're sourcing these sorts of products, even from a supplier on alibaba.com, you probably won't need to spend a lot of time in Asia with your suppliers, but I'd recommend at least one or two trips to meet them, build at least a basic relationship and to check and confirm the quality of the goods you're buying.


While sourcing products in this category is relatively easy, of course the downside is that there are probably already a lot of people selling the same or similar products in the market, so marketing might be a little harder for you.


You'll need to find a non-product related way to differentiate yourself in the market, but that's a topic for another blog post.


2. Niche product, mid- to high-quality

Products in this category can be a little harder to find, as they may not be available on websites like alibaba.com or at large, general fairs like the Canton Fair.


A good place to start in this category is to do some searches online for product specific trade fairs. For example, if you're looking to source high quality furniture, high quality leather shoes or specific pieces of sporting equipment there are a number of trade fairs throughout Asia each year where you should be able to find good suppliers.


There may also be wholesale markets in China for these products, where suppliers are permanently based.


For example, there are large leather and non-leather wholesale handbag markets in Guangzhou where you can source pre-designed handbags or find suppliers to make handbags you've designed.


For products in this category you'll need to spend more time on the ground working with your suppliers.


If you're going to be developing your own product you'll need to work on your design with potential suppliers, get samples made and really spend time with your suppliers to ensure the quality is right.


It's very easy for a supplier to make a good quality sample, then take shortcuts when making a full run of your products. The only way you'll pick this up is if you're on the ground with them, and inspecting the final product before taking delivery.


3. Highly specific product, high quality

This category is the hardest to source and will require a lot of time on the ground working with suppliers. At Shoes of Prey we needed to find suppliers who could custom make high quality leather shoes; 99% of shoe suppliers require minimum orders in the 100s of each style and colour shoe.


We needed to order them one at a time. We spent a lot of time on the ground in Asia meeting with different suppliers and attending trade fairs to understand the industry, how it worked and who might be interested in working with us.


In the end we were lucky that we were sourcing during the Global Financial Crisis. Shoe manufacturers were receiving fewer orders from their existing customers so some of them were more willing to work with a new and specialised customer.


In terms of spending time on the ground in China, between our three co-founders we have spent a combined eight months out of the two years we've been working on the business, on the ground in China.


In addition to that we have our own office and two local employees, Vanessa and Qun, who understand our requirements, systems and processes and work day-to-day with our suppliers to ensure we're making shoes correctly and at a very high quality for our customers.


One of the things I love about sourcing products in China is how hard-working and efficient most people and businesses are in the country. We were recently developing a new shoe box so we went and met with a supplier.


Within two hours of meeting them we'd discussed our ideas, reviewed products they'd made previously, put a design together, selected materials, negotiated the price and organised for a sample to be ready in five days’ time. Attempting to do something similar in Australia would have taken weeks.


If you're looking to source products in China hopefully this information is useful. If you have any experience or thoughts to share, feel free to leave them in the comments.

Michael Fox managed Google’s online sales and operations agency team for Australia and New Zealand before moving into entrepreneurship. He has founded travel guide website Swift City, spoof online dating site Darwin Dating and Shoes of Prey, which allows women to design their own shoes. He blogs in detail about the process of running Shoes of Prey at his blog www.22michaels.com.

Comments (1)

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One of the most common things I hear from new business owners looking to import is "I can go to China anytime and get whatever I want". While sites like Alibaba make simple searches and transactions easy, there is more to sourcing a quality supplier. Firstly many suppliers on Alibaba are not the actual manufacturer of the goods you've found - they are trading companies - a bit like a supermarket - so they are not in control of important things like product development, production or quality control. Also, of course you are paying an extra margin for the product. Trading companies can be useful to help you source smaller quantities of products than will fit into a shipping container, as many factories in China will only accept orders that will fill a container. Ask if you can visit the factory where they manufacture the goods - if they say no, then thats an indicator you are not dealing with the true origin of the product. If you are able to find the direct source of the product you are seeking, then you have other things to consider. Factories that supply small to medium sized business are in a very competitive market. Many of them will quite literally sell to anyone who has the cash to pay for an order - this means that important factors like exclusivity become an issue - ask whether your factory supplies anyone else in your market - if they evade that question or give a wishy washy answer, they are probably already supplying a competitor of yours, or would if the chance arose. Also, do your best to lock in long term pricing - if you don't do this, they will almost certainly increase the price each time you order. And lastly, travel - check out relevant trade shows to your industry, keep in touch with your factories and their owners - visiting them on a regular basis makes the relationship personal - which means they are far more likely to bend over backwards for you when you need a favour with a shorter than usual production line, or a one-off special price to help you secure a good order.
graemerax , January 10, 2011
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