China has long been known as the “factory of the world”, where you can easily find many suppliers for a wide variety of products. Despite the rising labor costs and trade tensions, most Amazon sellers still like to work with Chinese suppliers. However, many eCommerce sellers often overlook issues about importing goods from China effectively.
In this post, I shall point out the 3 things sellers get wrong about importing from China, and how they can be overcome. Steer clear of such issues, and you will find yourself having more effective collaborations with your Chinese suppliers!
Paying for an order upfront without first evaluating your supplier exposes your business to potential risks like fraud, receiving unsellable goods, supplier bankruptcy, and more. I have been through all these, so I know how upsetting it can be when you realized the goods you were waiting for were unsuitable to be listed on Amazon. Another thing to note is, you must be wary of any supplier that asks for 100 percent payment upfront. Never, never make a 100 percent payment with a new supplier upfront – or else you may find that supplier uncontactable after a few days and end up losing all your money.
Issue 1: Placing a Large Order Without Vetting the Supplier First
Once you decide what to import from China, it will be time to find a supplier to manufacture your goods. However, please don’t get too excited and rush ahead to place a huge order with the first supplier you find.Paying for an order upfront without first evaluating your supplier exposes your business to potential risks like fraud, receiving unsellable goods, supplier bankruptcy, and more. I have been through all these, so I know how upsetting it can be when you realized the goods you were waiting for were unsuitable to be listed on Amazon. Another thing to note is, you must be wary of any supplier that asks for 100 percent payment upfront. Never, never make a 100 percent payment with a new supplier upfront – or else you may find that supplier uncontactable after a few days and end up losing all your money.
Saying that this is not to say that all Chinese suppliers are not worthy of your trust. Most Chinese suppliers are genuine and nice to work with, but there are always those ‘black sheep’ out there waiting to make fast cash off new, inexperienced eCommerce sellers. The moral of the story is, it’s better to be safe than sorry, and to keep your guard up against any suspicious suppliers.
Now, the best way to combat this issue is by conducting a background check on suppliers before proceeding with a purchase order. There are two ways you can choose to do this, depending on your budget.
Method 1: Consider a third-party quality audit
For more affluent sellers, you can opt to engage a third-party auditing firm in China to help you do this work. This is because searching for information about Chinese suppliers online can be difficult since most official databases lack English resources. Besides, there are certain cultural nuances that you may not know. China is a large country, and suppliers from different parts of the country may differ vastly in their expectations of business partners and working processes. You will be better off at letting locals handle the audit, rather than barging in by yourself and hence risk offending possible work partners.
The merits of engaging a local third-party auditing firm to help you do the check are that they can physically go to your supplier’s facilities and verify their operations, as well as cross-check business licenses and documents against official Chinese databases. Many third-party audits are based on the international standard ISO 9001, which means they typically evaluate aspects like the suppliers’:
- Basic production facilities
- Equipment maintenance
- Quality management system organization
- Incoming quality controls, during production controls and finished goods controls
- Any lab testing capabilities
- HR recruitment and training practices
- Engineering, research, and design capabilities
Method 2: Conduct your own check
Now, for Amazon sellers with a limited budget, you can still conduct your informal background check on suppliers. Simply observe the suppliers, and ask them questions about their business and experience in manufacturing goods. Here are some pointers you may want to take note of:Point 1: Find out the suppliers’ product range
You can try to find out the other products the suppliers manufacture, and where they export these products to. This information will be listed on the supplier’s Alibaba listing if they are a genuine company registered with Alibaba. Check if their products and markets are similar to yours – if they are, then there’s a higher chance such suppliers are a better match for your business.Point 2: Ask for supporting documents
What documents can the supplier provide to verify their operations? Business licenses, ISO certificates, and test reports can all demonstrate proof of a supplier’s legitimacy. You can also contact the issuing body to verify certificates, and that should be good enough for you to judge whether you want to continue working with them.
China has long been known as the “factory of the world”, where you can easily find many suppliers for a wide variety of products. Despite the rising labor costs and trade tensions, most Amazon sellers still like to work with Chinese suppliers. However, many eCommerce sellers often overlook issues about importing goods from China effectively.
In this post, I shall point out the 3 things sellers get wrong about importing from China, and how they can be overcome. Steer clear of such issues, and you will find yourself having more effective collaborations with your Chinese suppliers!
Paying for an order upfront without first evaluating your supplier exposes your business to potential risks like fraud, receiving unsellable goods, supplier bankruptcy, and more. I have been through all these, so I know how upsetting it can be when you realized the goods you were waiting for were unsuitable to be listed on Amazon. Another thing to note is, you must be wary of any supplier that asks for 100 percent payment upfront. Never, never make a 100 percent payment with a new supplier upfront – or else you may find that supplier uncontactable after a few days and end up losing all your money.
Issue 1: Placing a Large Order Without Vetting the Supplier First
Once you decide what to import from China, it will be time to find a supplier to manufacture your goods. However, please don’t get too excited and rush ahead to place a huge order with the first supplier you find.Paying for an order upfront without first evaluating your supplier exposes your business to potential risks like fraud, receiving unsellable goods, supplier bankruptcy, and more. I have been through all these, so I know how upsetting it can be when you realized the goods you were waiting for were unsuitable to be listed on Amazon. Another thing to note is, you must be wary of any supplier that asks for 100 percent payment upfront. Never, never make a 100 percent payment with a new supplier upfront – or else you may find that supplier uncontactable after a few days and end up losing all your money.
Saying that this is not to say that all Chinese suppliers are not worthy of your trust. Most Chinese suppliers are genuine and nice to work with, but there are always those ‘black sheep’ out there waiting to make fast cash off new, inexperienced eCommerce sellers. The moral of the story is, it’s better to be safe than sorry, and to keep your guard up against any suspicious suppliers.
Now, the best way to combat this issue is by conducting a background check on suppliers before proceeding with a purchase order. There are two ways you can choose to do this, depending on your budget.
Method 1: Consider a third-party quality audit
For more affluent sellers, you can opt to engage a third-party auditing firm in China to help you do this work. This is because searching for information about Chinese suppliers online can be difficult since most official databases lack English resources. Besides, there are certain cultural nuances that you may not know. China is a large country, and suppliers from different parts of the country may differ vastly in their expectations of business partners and working processes. You will be better off at letting locals handle the audit, rather than barging in by yourself and hence risk offending possible work partners.
The merits of engaging a local third-party auditing firm to help you do the check are that they can physically go to your supplier’s facilities and verify their operations, as well as cross-check business licenses and documents against official Chinese databases. Many third-party audits are based on the international standard ISO 9001, which means they typically evaluate aspects like the suppliers’:
- Basic production facilities
- Equipment maintenance
- Quality management system organization
- Incoming quality controls, during production controls and finished goods controls
- Any lab testing capabilities
- HR recruitment and training practices
- Engineering, research, and design capabilities