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In February 2021, Chinese exports experienced the highest growth rate since 1995--an astonishing 154.7% increase compared to last year. 

Experts point towards multiple factors as the catalyst: a rebound and recovery in foreign demand, export-oriented industries’ decision to remain operational during the Chinese New Year, and most importantly, a boom in the number of brands and third-party sellers on Amazon.

Emerging online Amazon businesses in the US and EU marketplaces has resulted in more products being manufactured and shipped out of China than ever before. As a new—or even veteran—seller, the decision of whether to source locally, from China, or other places like Vietnam and India is a critical factor in determining both survivability and long-term success. 

To aid you on your quest to source high-quality products at competitive rates, we created a comprehensive A-Z manual about how to source products from China for Amazon. 

P.S: This blog applies to most global Amazon marketplaces and takes into account the best sourcing practices for FBA sellers.

Sourcing Markets around the World

Undoubtedly, China is the product resource hub for Amazon sellers around the globe. Within the country, there are multiple marketplaces and suppliers, some of which offer support for English speakers while others require a professional translator. Knowing which platform houses the best manufacturers and makes navigation easier for a western audience will help you go a long way.

Container, Freight, Port, Transport, Logistics

Also, let’s not forget that there are numerous sourcing hot zones outside of China as well. Although these markets are not as popular as their Chinese counterparts, they can be helpful for sourcing certain super-niche products. 

Let’s go over the most popular marketplaces to  see what they have to offer.

IndiaMART – India

First on this list is IndiaMART which has the largest share marketplace. The website boasts more than 130+ million buyers and has a wide range of products up for sale. They also feature a payment protection program with numerous offices and help centers scattered across the country.

The marketplace offers a platform for small and medium enterprises (SMEs) to connect with buyers. However, below-average customer ratings and constant complaints about fraudulent suppliers are points to consider.

VietnamExport.com – Vietnam 

Vietnam is carving a name for itself as a serious exporter for all things electronic. Multiple online retail platforms have popped up and have become popular with businesses seeking manufacturers outside of China. Vietnamexport.com is one of many such websites and is directly endorsed by the government to instill confidence in foreign customers and add legitimacy to the marketplace.

Despite exporting electronic goods in large quantities, the industry is yet to mature, which is apparent by the sub-par quality of most products. As a result, Vietnamese manufacturers still have ways to go before competing with powerhouses in China. 

All that talk aside, if it's agricultural and animal-skin products you’re interested in, Vietnamexport.com is a great place to snatch such items at meager prices. 

1688.com – China 

1688.com might still be a relative unknown for new sellers, but savvy Amazon entrepreneurs know of its presence as well as the opportunities it offers. The website is home to local manufacturers who do business mainly with Chinese clients. 

A significant downside is the lack of English support and virtually no English-speaking suppliers necessitating an on-the-ground, native sourcing agent. 

1688.com may have some of the cheapest sourcing options available, but that also means lower quality goods. Also, due to the complexities and costs involved in conversing with local manufacturers, the barriers to entry prove insurmountable for new sellers. 

The good news is that the next entrant on our list (which also happens to own 1688.com) addresses these concerns quite well.

Alibaba.com – China 

Alibaba.com is the global sourcing hub for Amazon sellers and our personal choice for sourcing high-quality FBA products. 

A catalog of hundreds of millions of products across more than 40 major categories, the website sees buyers from more than 190 countries worldwide. It’s no secret that most sellers on Amazon source their products from Alibaba.com.

Alibaba.com is our favorite sourcing spot for a few reasons:

  1. Some of the lowest manufacturing costs in the world
  2. Reputable suppliers
  3. A payment protection program
  4. An intuitive and responsive website 
  5. The ability to order in massive quantities 
  6. Faster product times 
  7. Most suppliers respond quickly to queries 

A complete walkthrough on maneuvering, negotiating with manufacturers, and ordering product samples will be discussed later in detail.

Global Sources – China/Global

Based in Hong Kong, Global Sources organizes trade shows, boasts an extensive online directory, and has over 45-years of experience in retail. What sets it apart from Alibaba.com is a more stringent vetting system and higher prices on average. 

Global Sources organizes numerous trade shows in Asia and attracts big sellers with a proven track record. As such, it can be a bit harder to get quotations as manufacturers usually want to inspect your background and history first. 

The Verdict: Visit Alibaba.com to fulfill all your sourcing needs.

Product Shipping and Sourcing Basics – Incoterms

Incoterms—short for International Commercial Terms—are shipping terms commonly used by manufacturers/suppliers and Amazon sellers worldwide. They explain and define the responsibilities of both buyers and sellers e.g. which party is responsible for managing and bearing the costs for shipping, customs clearance, logistical activities, insurance, and so on.

When conversing with manufacturers, you are bound to come across these terms. Here are the important ones to know:

  • Delivered Duty Paid (DDP): Signing an agreement on DDP terms means that the manufacturer is responsible for making the goods, transporting them to your destination of choice, and handling all the clearance and documentation involved. This is the most convenient option for Amazon sellers.
  • EX-Works (EXW): The manufacturer produces the goods and stores them at their warehouse/storage facility. From that point on, picking up the goods and transporting them to either your own or an Amazon warehouse is your responsibility. EXW is better suited for sellers sourcing products from multiple suppliers and wanting to keep things secret.
  • Free to Carrier (FCA): The manufacturer produces the product and delivers the inventory to a designated point (within the country), where the carrier then picks them up. FOB or Free on Board is a closely related term where the manufacturer delivers the products to the port, and the seller bears all of the expenses.
  • Freight Forwarder: An independent shipping services provider who picks up the inventory from the manufacturer’s warehouse and delivers it to a designated spot. The freight forwarder takes care of all the documentation and customs clearance hassle. When selling on Amazon, a reliable freight forwarder is a must-have.
  • Landing Cost: Refers to the sum of all costs involved in manufacturing products and shipping them to a storage facility elsewhere.
  • Minimum Order Quantity (MOQ): MOQ is the minimum number of units a supplier or manufacturer is willing to create. This number varies from one supplier to the next. 
  • Product Sample: is what you should ask from a manufacturer once you have agreed upon the terms and conditions. Ideally, you should shortlist a few manufacturers and ask them to ship product samples for quality inspection purposes.
  • Request for Quote (RFQ): When a seller asks for the cost of manufacturing X amount of goods.

The list of incoterms is extensive with definitions undergoing minor changes each year. However, the point here is to equip you with enough jargon to negotiate and strike a deal with foreign suppliers and manufacturers.

Finding a Supplier and Sourcing Products from Alibaba.com

Up till this point, you’ve learned about popular sourcing spots and the incoterms commonly used by suppliers. The next step is to find a manufacturer on Alibaba.com and source products. To do that, you must first understand the marketplace dynamics. 

The goal is to obtain affordable and quality products by vetting prospects, form long-lasting relationships with suppliers, and keep ourselves safe from financial harm. 

For example, let’s say you want to sell steel kitchen knives on Amazon, how do we research and vet suppliers?

Step one is to visit Alibaba.com and search for “steel kitchen knife” just as you would as a customer on Amazon. Remember to select your location/Amazon marketplace first, as shown in the image.

Remember to select your region via the “Ship to” drop-down menu

After hitting search, multiple product listings will appear. The search results will look something like this:

Try to avoid manufacturers that produce goods across unrelated product categories

Below the product title (in the region highlighted in green) is the price range; the final price depends on the order quantity. Underneath that—in the orange text—is the MOQ or minimum order quantity we explained earlier. 

Some suppliers might be willing to ship a single piece (see the second one), whereas for others, the number can go as high as 10,000 units depending on the product type.

The seller performance metrics--highlighted in the red box—are important for picking out the best manufacturer. When shortlisting candidates, you should select ones that:

  • Are verified: As shown by the blue-colored “verified” logo. A verified company has undergone inspection from a reputable third-party organization e.g. SGS Group. 
  • Have spent some time selling on Alibaba.com: The number of years a company has operated on Alibaba.com can be seen right next to the verified badge. In the image above, some have worked for 2 years (shown as 2 YRS) and others have been active for longer. Go for manufacturers with at least three years’ worth of experience.
  • Feature at least three gems: Alibaba has a “Supplier Online Performance Index” or SOPI through which it judges seller performance. Sellers are awarded anywhere from zero to five gems Based on four distinct metrics.
  • Seller ratings: Like sellers on Amazon, each manufacturer has a one to five-star rating and a review count based on customer feedback. We recommend going for manufacturers with a 4.6+ average rating score.

Clicking on the seller profile reveals more details about the product and its supplier.

Visit the manufacturer’s storefront to learn more about their credentials

Take note of the Lead time, Customization, and Shipping options, all of which are crucial when devising an inventory management strategy on Amazon. Next, proceed to click on the supplier’s company name on the right-hand side of the screen—there’s still more information we need to determine whether this particular supplier should be shortlisted or not.

A Trade Assurance badge is a must when doing business with suppliers on Alibaba.com

The gold crown is called Trade Assurance and is a no-compromise factor when vetting prospective suppliers. It’s a built-in service that protects customers who place and pay for goods on Alibaba.com. 

In case of delayed shipping times or if product quality falls well below what was agreed upon, Alibaba.com will step in to resolve the issue. Note that the Trade Assurance feature only comes into effect if you submit the payment via PayPal.

Next is the tiny blue house beside the verified logo. It shows that the supplier’s onsite operations have been verified directly by Alibaba.com’s team and is referred to as an Onsite Check

Note: The verified logo by itself is earned once a third-party inspects a manufacturer.  

The rest of the details are self-explanatory. Manufacturers with a response rate of above 90%, sizable transactions, and your local Amazon marketplace included in its “Top 3 Markets” section should be given preference over the rest.

The Verdict: Although this supplier fulfills most of our requirements, ideally, you want to contact ones that feature at least three Supplier Index gems. Take your time vetting suppliers—there’s no rush. 

How Do I Talk to a Supplier on Alibaba?

When you click on a product listing, a Contact Supplier option will appear on the right-hand side of the page. Clicking it will bring up a Send Inquire box. Here, you can solicit quotations from the manufacturing and other information such as minimum order quantity, size, color, materials, shipping details, and more.

A nifty way of vetting multiple suppliers at once is by:

  1. Selecting the Suppliers option found within the search bar tab
  2. Selecting Chinese suppliers from the Location drop-down menu
  3. Clicking on the Compare button whenever a supplier meets your criteria (you can compare up to 20 suppliers at once)
You can also send an MOQ request to multiple suppliers at once

By following the steps mentioned up till now, shortlist at least 10-15 suppliers. After that, all that’s left is to get in touch with each one and negotiate the price.

How Do You Negotiate on Alibaba?

To negotiate prices with suppliers, never state the number of items you plan on ordering as part of the first inventory batch. Instead, ask for the manufacturing cost of 10-20% of the total amount (provided it’s higher than the MOQ) and keep working your way up. Doing so usually results in lower quotations. 

Of course, you have to be smart when adopting this strategy; try not to make it too obvious. Securing long-term clients is mutually beneficial to both sellers and manufacturers so they’ll be more inclined to lower their prices for serious buyers. 

Another critical aspect of negotiating with suppliers on Alibaba.com is the payment made for producing the first batch of goods (after finalizing the supplier). Never agree to a full upfront payment. On Alibaba.com, most trade deals are based on 20-30% upfront payment, with the remaining amount transferred once the inventory reaches Amazon’s or a 3PL warehouse.

Reassure suppliers that if their products are up to mark, you’re more than willing to do business in the long run. This brings us to the product sampling/testing stage.

Note: Upfront payment percentages vary when ordering inventory for the first time. Sellers are usually expected to make a full payment for their stock once the cargo is loaded onto a shipping container and comes under the control of your freight forwarder.

Do You Pay for Product Samples?

It depends on the supplier. Some are willing to send over free samples as a sign of good will (you will have to bear shipping costs except in rare cases) whereas others will ask you to pay. The most important thing to remember when ordering samples is to not negotiate on price. 

Do not expect the sample to cost the same as a single unit would when ordering large amounts. It’s more costly but worth it. So don’t mull over it too much—consider it a one-time expense and move on. 

Also, remember how we compared and shortlisted around 10-15 suppliers on Alibaba.com? Inspecting product samples from each will most likely trim that down to two or three. 

A pro tip: order a product from your primary competitor/top seller within the niche. Once your samples arrive, compare them with your competitor’s product to uncover flaws and weaknesses in your potential product. Relay these concerns to your supplier and ensure that improvements are made. You cannot expect to compete with other sellers in your niche unless you offer a product of similar or higher quality.

Pro tip #2: Go through your competitors’ negative (i.e. 1-3 star) product reviews and try to find out the leading cause of customer dissatisfaction. It could be the packaging, sturdiness of the product, how well it performs its intended function, etc. 

Whatever the case, talk with your supplier and make sure these flaws are not present in your product. Once your product enters the market—unless your competitor makes improvements—you’ll soon begin to attract buyers by successfully addressing the pain points rival sellers could not.

What is Product Sample Consolidation?

Product sample consolidation is to have multiple product samples transported from the manufacturer’s premises (In our case, China) to the seller’s location. There are companies out there offering such services and should be utilized to decide which manufacturer you should work with.

Are China Sourcing Agents Worth Considering?

Sourcing from China for Amazon without the help of sourcing agents is doable even for new sellers. That is because most Chinese manufacturers now have English-speaking representatives and websites like Alibaba.com offer complete English support. However, if the entire sourcing ordeal feels overwhelming, you can always contact a reliable product sourcing agent or agency.

How to Ship Goods from China to an Amazon Marketplace

Once you and your manufacturer agree upon the terms and conditions, you will have to decide how to ship your products from China to an Amazon marketplace. There are four ways of shipping products internationally:

  1. Express Freight 
  2. Air Freight
  3. Sea Freight
  4. Land Freight (rarely used)

Each method has its advantages and disadvantages and suits sellers based on the product type and also their pocket size.

Express Freight

Express shipping is the fastest method of transporting goods from China to an Amazon warehouse anywhere in the world. Express freight is ideal for products that weigh less than 200-400 kilograms (around 900 pounds). The gross or volumetric weight (based on product + packaging dimensions) is considered—whichever is heavier. 

A Man and a Woman Working for a Delivery Company

The total shipping time can take anywhere between four to seven days, depending on the Amazon marketplace. However, Express freight is costly when transporting large quantities and is best suited for ordering small amounts (up to 150 kilograms or around 330 pounds). An experienced freight forwarder will handle all of the clearance and import-related hassle on your behalf.

Note: You can easily find freight forwarders on Alibaba.com. Just apply the same metrics as you would to manufacturers & suppliers. 

Air Freight

The second-most costly and fastest shipping method is via air. It’s approximately 10-20% cheaper than express freight and is ideal when your shipment weight exceeds 500 kilograms (or 1,000 pounds). If your shipment weight is lesser than that, we recommend going for express or sea freight.

Note: Certain goods like hazmat products and those containing lithium batteries need prior approval for storage in Amazon’s facilities. Failing to read up on FBA storage rules and regulations might result in your goods being rejected and (possibly) shipped back to China—the entire cost of which you’ll have to bear.

Sea Freight

Sea or ocean shipping is one of the most popular methods of transporting products to an Amazon FBA warehouse. The time it takes to get your products from the Chinese warehouse to, let’s say, the USA varies between 25 to 40 days. It’s also the most budget-friendly shipping method and allows for massive cost-cutting, especially when transporting large inventories. 

Because it takes more than a month for the products to arrive, it’s beneficial to split your inventory into parts and have some shipped by sea and others by either express or air. Not only does this strategy help you save money and list your products faster, but it also lets you set realistic expectations of when to expect your goods using various shipping methods.

Common Pitfalls to Avoid When Sourcing from Chinese Suppliers

The last section of this blog will highlight the common pitfalls new sellers fall into when sourcing from Chinese suppliers. 

Forgoing Product Inspection Services

Once the sales start racking up and the first inventory batch begins to disappear off the shelves, sellers tend to become complacent and the same goes for the suppliers. Without you knowing, an eventual decline in product quality will soon result in irreparable damage in the form of negative product reviews.

Fortunately, there are plenty of reliable Chinese product inspection companies that can visit your supplier’s warehouse on your behalf to inspect the inventory, for a nominal fee. This keeps your supplier on their toes and does wonders for quality control. 

Not Preparing for the Holiday Season

When selling on Amazon, international (and Chinese) holidays mark the beginning of supply chain disruptions. Local Chinese manufacturers are overwhelmed with the increase in demand. with delay times being the consequence. 

Dragon Festival During Nighttime

Such scenarios can be a nightmare for sellers eagerly waiting to capitalize on increased sales e.g. during the Christmas holidays. Check out this Amazon FBA holiday calendar to prevent shipping disasters!

Here are the main ones you should know about:

  • January 1st – New Year’s Day: China has its own New Year according to the lunar calendar. Still, everyone takes a 3-day holiday.
  • February 12th-17th – Chinese New Year: Also known as the Spring Festival, it lasts for at least a week. All manufacturing activity stops as employees usually go to visit their family and loved ones. Expect anywhere from a 10-day to a month-long break.
  • April 4th – Qingming Festival: The Qingming Festival takes place on the 4th or 5th of April.
  • May 1st – Labor Day: A worldwide holiday that can extend for up to 4 to 5 days in China
  • June 12th-14th – Dragon Boat Festival: A popular nationwide Chinese holiday that lasts for three days.
  • October 1st-7th – Golden Week: Another popular holiday also called the Moon Festival. It usually goes on for three days.

Similarly, each year, plenty of new sellers are caught off-guard by the disruptions to the supply chain in Q4 (the last quarter i.e. three months of the calendar year). This period marks a halt in manufacturing in China during Christmas and New Year’s Eve. Best inventory management practices to employ pre-Q4 include:

  • Stocking up on more inventory to successfully meet customer demand
  • Speaking with your supplier to set realistic expectations 
  • Creating an ad budget to capitalize on moments when your competitors go out of stock.

Messing Up the Product Packaging

The golden rule with product packaging is to adhere to the practices utilized by successful sellers within your niche—there’s no benefit of re-inventing the wheel. So, for example, if everyone in your niche is selling fragile items and are using bubble wrap, use bubble wrap as well. 

Although covering the entirety of FBA product packaging and prep requirements requires an article of its own, make sure to fulfill these basic requirements:

  • Ensure all barcodes and labels are correctly applied, contain the right information, and are easily scannable
  • Products sold as sets or have multiple parts should be packaged as a single unit
  • When using polybags with a 5-inch or larger opening and apply a suffocation warning label
  • Bubble wrap must be tightly taped and wrapped shut
  • All boxed units must be six-sided
  • Overweight cartons must have additional labels indicating the kind of lift needed to move them around

Amazon’s product packaging policies change from time to time. Stay updated by visiting their official page.

Conclusion

Product sourcing from China for Amazon can be a nail-biting experience, especially if it is your first time. Between comparing different suppliers, negotiating terms and conditions, and overcoming language barriers, there’s a lot that can go wrong. And when you’re ordering inventory worth thousands of dollars, there’s no room for mistakes. 

ZonGuru’s Easy Source tool automates the most vital part of product sourcing from China: identifying credible and trustworthy suppliers. Thanks to an official partnership with Alibaba.com, the tool cherry picks manufacturers that have earned their stripes (or in our case, gems). 

Getting in touch with the best manufacturers in China is now just a click away!

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