Sourcing in China is easy-peasy. Your host Nils will talk about how to source in China the right way without headaches. Nils will talk about his top three favorite sourcing methods, how he doesn’t like Alibaba and GlobalSources, loves and hate sourcing agents, and why nothing is better than sourcing on a fair in China. Also, combine the last two ways to source in the right way.
Before starting, thank you very much for your comments and answers. If you have a question, go to EasyPeasySourcing.com/ask to send a voice message or leave a comment.
(01:25) Starting with Alibaba and GlobalSources. GlobalSources is slightly smaller and is based in Hong Kong, but both of these platforms are huge and have any product you can imagine. There’s a huge selection and it’s also easy to use. Just find your supplier and send them a direct message. Ask for prices and compare them.
Message 50 to 100 factories, see what comes back, and choose the ones you feel comfortable with based on overviews and prices. The problem is that everyone can do that, including your competition. You have no chance of differentiating unless you custom develop your product, which could be expensive and take months.
(03:10) Not only is it easy for anyone else to find the same supplier as you, Alibaba has quite a bit of spam. You send a message to a lot of factories, you don’t reply to them, and your inquiry goes public. Then you receive hundreds of emails or messages from hundreds of other factories that don’t have anything to do with what you asked about.
(04:15) Next, having a personal sourcing agent means you have a local Chinese person on the ground. You tell them what you want, they reach out to factories and find it, and they take a commission between 1 to 5 percent. They get really good prices. You don’t have to do the work and you get better prices. They can advise you on the products, packaging, and development. They know when the factories are bullshitting.
They can do to the negotiations for you and get the price down. A popular example is that a sourcing agent can bundle samples from ten factories. Normally, this sort of thing might cost you 800 dollars but a sourcing agent could get that reduced down to 200 dollars for samples from 10 factories.
(05:55) Nils has worked with 200 agents so far. It’s hard to find a very reliable agent. You have to reach out and work with many of them to find a good one. Many claim to only take 1 percent commission but they add hidden fees. A factory might normally charge you 7 dollars, but they charge the sourcing agent 5 dollars and the sourcing agent charges you 6 dollars. In that case, he takes a little hidden fee but it still saves money.
(06:55) Nils usually have 2 to 4 agents going after the same product to compare those quotes to see who is being more honest than the others. However, sometimes an agent might drop you because they find a bigger client who takes up all their time. All that time and work was for nothing, and you have to start over with a new sourcing agent.
(08:15) The third method: going to a fair in China. Canton Fair is the most famous fair in China and has been happening for 120 years. It is held twice per year, runs three weeks and has different phases. Book a flight and reserve your hotel early. This is where Nils sources his product. There are also fairs in Hong Kong held at the same time, a two-hour car ride away, or you can take a helicopter for $500 and a 30-minute ride.
(09:10) The peak months for fairs are April and October. GlobalSources in Hong Kong focuses on electronics, great for Amazon sellers. JungleScout (Greg Mercer) had a display there.
(10:25) The factories are changing. They go to the fair with 20-30 prototypes of new designs that they believe fits into the market. The trend this year is “unicorns.” You can see products that aren’t on the market yet. Your competition uses Alibaba to see what’s already there, but you see the new (different) designs. Your competitor only knows about this product after you launched it.
(11:45) At a fair, you can see and touch the product. You can gauge how attentive the booth operators are with you. You can view their catalog and see the best-selling products. You get an impression of both the quality and the supplier.
(12:35) Negative aspects of flight: cost. Flights and hotels are expensive during this time. A tiny far away hotel room can cost $100 per night. You can save some money using Airbnb. Nlis prefers a combined option. He visits the fair, finds a product and supplier, then gives this information to agents to reach out and make an offer.
(13:40) At the next Canton Fair in October, Nils will guide you how to find a product on the show, pre-sell, launch it, and make money from it. Nils built a team of Amazon sellers and sourcing agents to create a report with the best products and suppliers in the show. They have 200+ products they hand-picked that are the best-sellers not on the market yet.
(15:00) For example, if you’re selling in the kitchen niche, you can see those best products for you, see other niches, and view the entire catalogs to get product ideas and see thousands of product variations.
That’s it for today. Next time, Nils will dive deep into how to get the best prices for your products, go off Alibaba and explore local markets in another episode, start products at low quantities, and avoid risks when sourcing. Thanks for listening. If you have questions or need advice, go to EasyPeasySourcing.com/ask and send a voice message to get your answer and have it featured on the show.