SOURCING YOUR PRODUCT

There are about three ways that you can really go about sourcing products from China: online sourcing, using an agent, or actually going to China.

ONLINE SOURCING

A lot of people approach me now and talk about online sourcing, things like http://www.Alibaba.com.  This is probably the biggest website for sourcing products from China. Yahoo owns part of it and it’s sanctioned by the Chinese government, so they have a lot of support. Basically, a lot of the Chinese manufacturers have their products on Alibaba, so you can view them and send in any inquiry asking about the product, the quality, samples, etc. Another is http:// www.ttnet.net. It’s also one of the best.

 

There’s another one called Global Sources. I don’t care for it as well, but you can go to http:// www.GlobalSources.com if you choose to. I think Global Sources is more of a Hong Kong based company. I’ve never been able to get manufacturers that have good pricing from Global Sources.

 

Let’s talk about Alibaba and ttnet first. They’re going to have you sign up for an account. They’ll tell you to send your inquiries in through their system and you can do that. There’s nothing wrong with you doing that. However, here’s a biggie: when you make contact with a Chinese company, I’ll bet you can send in ten inquiries through Alibaba and probably only get back two or three replies. It’s not one of the more traditional ways of contact. Also, they get a lot of knuckleheads that just go on with, “Hey, how much for this thing?” You just can’t approach them that way.

 

Approaching A Manufacturer

We’re going to get into this in depth, but I want to start talking to you about it here. Chinese manufacturers will treat you a certain way based on how good a businessperson they think you are. If you seem like a chucklehead, they’re going to treat you like a chucklehead. If you act like just the blind idiot walking through the door, they’re going to totally ignore you, because they assume you’re just full of crap and aren’t going to buy anything.

 

You can bet that every one of these places gets dozens of inquiries every day through Alibaba. They look at a large majority of them and go, “That guy’s an idiot. He’s not serious.” They don’t even reply. For other ones, they’re going to say, “That guy’s an idiot, but he looks like he’s an idiot with some money to waste, so let’s sell him just a truckload of garbage.” They’re going to assume you’re going to be out of business in no time anyway. They’ve got nothing to lose. Why not just take some money from you if they can? They will tear you up.

 

Everybody thinks that the mentality of Chinese business is long-term relationships and that’s absolutely true, if they feel you’re worthy of a long-term relationship. If they don’t feel you’re worthy of a long-term relationship, they’re going to try to skin you for as much money as they can get out of you, as quickly as they can before somebody else does. They see you as an idiot walking around with your wallet hanging out of your back pocket and eventually, somebody’s going to take your money, so they might as well be it. They’ll just send you a container of junk and you’ll just be screwed. The beginning of this process starts with you looking like a professional, because they judge you based on that.

 

Methods Of Approach

I can remember in the 1980s there were still a lot of older companies that wouldn’t do business with you unless you would send them a letter on letterhead, asking them to do business. We still had traditional wholesale channels in the States back then. China is still, today, very much like that. If you want to get a quick response, go ahead and send in the Alibaba form or the ttnet form if you want to, but type up your request and fax it on letterhead. If you’ve got to create letterhead in Microsoft Word, that’s fine. Fax it on letterhead to the supplied fax number for that company.

 

I don’t think I’ve hardly ever sent a fax to a company that I haven’t gotten a response to overnight. If you don’t have a fax machine, you can use eFax. There’s a company called  http://www.eFax.com, you can go there for about five dollars a month – or something like that – and get a fax number where you can send and receive faxes. They’ll send your faxes to your e-mail account in a PDF form. You’re going to use faxing for all of your orders. Every order you ever place is going to be placed by fax, so you’re going to have to have faxing in order to make it work long term.

 

What To Ask

When making online requests for information, you don’t make the price the first and only criteria that you want to know. You want to ask them about quality, about their company’s turnover. Ask them a lot of questions about whether or not they’re reputable. You should ask them their factory location. Are they the prime owner of the factory or a broker? Can they send you a prospectus? What is their annual turnover? That’s a big question which we don’t use in the States at all.

 

A big pride issue in China is how much they sell. Another good question is asking what percent of their annual sales are in the country you’re in. Also, ask them if they have a stateside warehouse. If they do, you probably don’t want to do business with them because they’re probably going to become your competitor. That’s not always true, it is a lot of the time.

 

These online tools are very self- explanatory: you literally just search a name and you find it. One little tip I’ll tell you is that you’ll miss searches in Alibaba if you search in plural because most Asian manufacturers and most Asian people don’t use plurals.  If you search for “tennis shoes” you’ll get nothing, as they will advertise with: “We manufacture tennis shoe.”

 

I’d say online is my least favorite source, although I did use it a great deal in the beginning. When I’m going to import, though, I’m typically looking at importing a million dollars a year or more worth of product from somebody, so it’s worth a trip for me to go see. However, I’ve got a friend right now that I talked to the other day. He’s in an equipment business where they’re doing three million dollars a year, and he’s never been to China. He does 100% of his importing online, so it definitely can be done.

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