3 Common Mistakes You Should Not Make When Sourcing Goods from China

In the late 20th century, China, a country whose primary claim to fame was its population explosion and communist ideologies, emerged as a rapidly growing economy that became threatening to major economies around the world. Many large economies including the United States felt threatened for losing the competition. However, eventually, American businesses realized they could actually tap the economic growth and technological advancements in China and use their unbeatably low cost of production to their advantage by working with them. They realized that the secret to succeeding lies in strategically allying with them and not in competing with them and other countries soon followed the suit.

Today China is a major trading partner with most large and growing economies around the world. Businesses prefer sourcing goods and suppliers from China and save more costs, which allows them to maximize their profits without having to increase their prices. Although more and more businesses are now moving towards sourcing goods and suppliers from China, many of them suffer from a backfire, usually because of a few common mistakes that they make. These mistakes are generally more common among small and newer businesses. Here are 3 mistakes that you should avoid when sourcing from China.

  1. Lack of Strategy

When it comes to sourcing, you cannot just run a quick Google search and pick a random supplier to work with. When it comes to sourcing with China, you cannot just do any kind of research and filter and shortlist suppliers. China is a huge economy and in most situations, you will easily be able to find a dozen suppliers for the same product. However, the whole point of international sourcing is to get the best possible price, quality, functionality and terms of trade and that require a bit more homework.

You need to have a clear roadmap that defines what you are looking for in your supplier. It should be clear about well ahead of time how you will ensure timely payments using tools available to you like po financing, followed by doing the same for delivery and consistent quality standards.

  1. Supplier Criteria

China is a huge country with a diver geography and it is important that you have defined a criterion for suppliers that would be best suited to your needs. These criteria should cover all major variables such as geographical location within China, quality standards, production capacity and technological competence. You would not want to place a huge order after successfully passing a smaller sample only to discover that the supplier does not have the capacity to fulfil that order. All these factors need to be taken care of in advance.

  1. Due Diligence

One of the most common problem that western businesses face when sourcing from China is getting scammed sue to inadequate verification and background checks of the Chinese suppliers. Unfortunately, with all its pros, scamming is a major con when dealing with China. However, it is nothing that cannot be avoided if you have done the adequate verification. It is recommended that if you are a new business or a small business who is sourcing from China for the first time, you should rather take assistance from a sourcing company such as Leeline sourcing agent service. You can share your brief with the sourcing company and they will take care of all the hassles from finding a supplier to shipping your goods without causing much trouble to you while you can focus on other business areas in peace.

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