16 Steps with Pictures
Introduction: How to Buy From ChinaSummary:This is a guide to purchasing (“sourcing”) from China, and working with Chinese factories. It will probably be most helpful to people like me entrepreneurs developing a new product or starting a new business that need to obtain parts and raw materials from China. I have one favorite store. I buy nearly everything there. Do you think Home Depot is big? Wall Mart? Amazon? Ebay? McMaster Carr?HAH!They are all pathetic and insignificant compared to The Greatest Store The World Has Ever Known. I am sure you are wondering “how is that possible? no store is bigger than Wall Mart!” . You are wrong my friend. There is One Store bigger than Wall Mart. MUCH bigger. Where do you think wall mart, amazon and mcmaster go when they need to buy something? Sorry jimmy they don’t go to another wall mart. They go to The Store. It is where all goods come from. ALL of them. You and me can buy direct from The Greatest Store The World Has Ever Known. You had to send a ship across the ocean for a couple years, they might all die at the hands of a storm or bandits, and in the end maybe you get a few grams of Pepper for a piece of gold. woot!In more modern times, international trade was not so expensive or risky, but it was inaccessible because you had to know someone. In the last 5 years countless Chinese companies have figured out that if they make a web page and hire someone with enough english to process an order, they can bypass lots of middlemen and be far more accessible to their potential customers YOU!Step 2: Window Shop ChinaSo what are you going to buy? and how do you find it?I recommend starting with some recreational window shopping. This will start to give you a sense of the nearly incomprehensible scope and magnitude of The Greatest Store The World Has Ever KnownThere are several large web directories of Chinese companies and their products. These sites are the place to start for window shopping. These are the largest ones:AlibabaGlobal SourcesMade In ChinaJust type something interesting into the search bar on those sites. they will usually show a sampling of their products in the directory. if you go to the ‘contact info’ page in the directory they often have a real website, which may have a different sampling of products. in either case, the real catalog of products is usually far larger. it is often useful to ask about other similar items if you see something you like. I’m sure this will change in a few years, but as of 2008 a multi billion dollar chinese company might have a website that looks about like your 17 year old cousin’s myspace. take a look at yourself. yes you. fortunately these are easy to come by, they all have free web signups.(2) a bank account(3) a few hundred bucks in that bank account. that’s about the minimum amount to play this game. at the absolute minimum you’ll be paying for a $60 fedex charge or two.(4) optional a web page (this will increase your response rates)Step 6: Your First Contactok you’re ready to take the plunge. what next?You can either write an email, or you can text chat direct. Alibaba etc. have “in system” email, or you can go to the “contact details” page for the company and find the real web page for the company (most have one). on the real webpage you can usually find a real email address, phone number and often an MSN or AIM chat address. a large number of the companies can live text chat in english. Don’t go into too much detail until they reply. You may be making lots of these “intro” emails, and the companies you contact receive lots of them. I usually make my first contact by email, and save the text chat for a more detailed Q that might occur later. Here is my standard intro:”Hello,I am seeking a supplier of Scooby Doo Diapers. Do you sell this? If yes, can you send specifications and pricing?Thank you very much,I. P. Can you send specifications and pricing? Do you have any similar models?.”Step 7: Communication SkillzNotice that even in that first intro email we did a few things:When writing, you must use simple english. The reps you are talking to often know just enough english to handle an order, and often they learned Special English, a simplifed form developed by the Voice Of America. because the company you are contacting only wants to work with a pro buyer, they will often try to check out your website. its pretty much the only thing they know about you. This is how it works:”Hello,We are very interested in your product: Uranium Control Rod Model XF 23. Can you send 1 sample? Please ship using our FEDEX account number: 142234423Ship to:Thank you very much,I. P. Frehley.”So, one of 2 things can happen here:(1) 2 days later, “Uranium Control Rod Model XF 23” shows up on your doorstep. (and your fedex account is about $60 lighter).(2) They will write you back with:”Dear Mr. Frehley,
I am sorry, but Uranium Control Rod Model XF 23 has a sample price of USD 425. Often there will be a surcharge for this low volume sample order. But you won’t be able to get a quantity that doesn’t make sense for a quality check. So you aren’t going to get 100 of the same LED, because nobody needs 100 of it to decide if they want to buy more. they might need 5. an item not in stock must be manufactured, they will be a lot less interested in selling a sample or small quantity if the item in that case. only once have i had a company take my payment and not deliver, I believe a motivator in that case was that I had ordered about 20 different items, all in very low quantity, and most of them were non standard and needed to be manufactured. so if you want a lot of things in small quantity, choose stuff that is in stock. “minimum order quantity” or MOQ. usually when you ask the price they will tell you the MOQ up front. it is never strict. you can always order less than the MOQ although often with a small surcharge (they usually will offer either a flat fee or percentage). it should have most of the details, but it is NOT always accurate. yet another reason you need to test a sample. you can often text chat with them to ask a lot of questions where there is likely to be communication difficulty. ask them to send you a photo. i have found this to be especially useful when i want to see a small detail on the product. For example “How does the power cord connect to your waterproof electrical box? Can you send a photo?”Step 12: How to Buy From Chinabuying stuff is a bit of a hassle, mostly because the only way to pay is with a wire transfer. For most US banks to do a wire transfer you need to actually GO to the bank and fill out forms on PAPER, and your bank changes you $40 just to send the money. So for less than about a $200 purchase it is not really worth it. This form is the standard before you pay anything. It shows your ship address, the items you are buying and any other fees, the bank info for the factory, the shipping schedule (sometimes if it is not in stock, they will have to MAKE it, and that can take a month), and other important things. the term “FOB” means “shipping not included”, while “CIF” means “shipping and insurance included”. i think the best way to describe the process of freight shipping might be it’s a lot like paying your taxes. there are endless rounds of forms, phone calls, fees, faxes, surcharges, more forms, driving around, waiting in line, waiting not in line. on the plus side it is really cost effective in bulk. The difference between using a courier like Fedex and using Air Freight is that with Air Freight you will need to pick up your shipment at the nearest international airport, and you will have to do customs paperwork yourself. The costs for air freight may be 30% to 50% less than the courier service. China Post has an express service (called EMS), but that’s just like Fedex and the rest. Here i’m talking about regular Airmail. Airmail via china’s postal system is quite inexpensive perhaps $5 to send a 500g package to the US however because it is not insured or tracked nobody would send significant merchandise using it. So you will lose some credibility points if you ask for Airmail. In principle it would be by far the most cost effective way to get samples, but since only the sender can pay for it the factory is reluctant. But don’t give up yet! I once successfully convinced a very persistent sales rep to send me some samples by China Airmail the reason being that I didn’t care enough about his samples to pay the Express charge, so I told him that if he wanted me to try his samples that badly, he should just send it by China Post and pay the charge himself which he ultimately did.