When you are looking to source products from China, you may be confused or overwhelmed by the process. After all, China is a huge country and different manufacturers make different items. In addition, the language barrier can often be a problem.
However, whether you are an expert entrepreneur, amateur ecommerce enthusiast, or anything between, you can learn how to source what you need while enjoying more profits.
But you must have the right strategy and avoid common mistakes, or you could miss out on the best opportunities available to you. Follow the steps below to put yourself in the best position to make more money in a shorter amount of time.
1. Research the Market
Your first step to making money by selling Chinese products online is research.
You cannot skip this step if you want to be profitable because many businesses and entrepreneurs are now selling products that compete with each other. If you enter a crowded niche, you will simply struggle to maintain the margins necessary to rise to the top of the crop.
When researching, first find out what the market wants. To do this, you can search on Amazon for the top 1,000 products in any category. If it is not in one of these top 1,000 then it probably does not sell enough for you to make a living from it.
Once you have found a product that fits the criteria, select two or three that you personally feel you know a lot about already.
For example, if you are a personal fitness trainer, it would be wise to investigate nutritional supplements instead of gardening tools. You must balance a fine line of finding a product that has enough customers to provide you with sales while not picking something that only multi-billion dollar companies can compete on.
To do this, choose a product that you believe you can add a personal touch to. Essentially, the only thing you will change will be the marketing, and it will allow you to differentiate yourself from the competition (more on that later).
When you have a found a top-1000 product with poor marketing that you have experience with, it’s time to move to the next step.
2. Contact Your Chinese Manufacturers
The first step, research, is often missed because people simply don’t understand that they need to do it. They imagine they can throw up a product and magically make sales. However, people don’t contact manufacturers for a different reason. It’s not that they don’t know they should, they just don’t know where to start or how to do it.
Luckily for you, the process is relatively straightforward:
All you need to do is go to Alibaba, a huge website that connects you with thousands of qualified manufacturers in China for any product you could imagine. You can chat with them, search for different criteria (such as years they have been in business, their quality rating, payment options, and more). You should narrow it down to three or four manufacturers that have images of similar products to what you want.
Then send them a simple message along the following lines:
“Hello, my name is (name). I’m contacting you because I need (product) made and I noticed you have experience with this. Can you please provide me with a price quote on (number of units you want to order) and a time estimate on delivery? Thank you! By the way, I am contacting other competitors of yours, so please be reasonable with your quote to ensure my business. Regards, (name).”
However, keep in mind that you should not accept any offers just yet.
If you noticed, there was no mention of ordering a sample yet. You simply want to test how responsive the factory is to communication. Rapid and clear communication is essential when your sourcing products from China. A delay in shipment or production could result in your customers not getting the items they ordered. This problem could create a disaster and ruin your business before it even gets started, especially now that customers can review your service online anywhere.
So only select companies that are fast in their responses before moving into the next step.
3. Negotiate
The reason you did not mention the word “sample” in the script above is because you don’t want to make the manufacturer you are contacting to think you aren’t serious.
Think about it.
Everyday, Chinese companies get tons of email and messages asking for samples, and often it’s from a person who is just testing the waters and doesn’t have the money to invest in the first shipment.
Factories make money on large volumes, since their prices are usually low.
Therefore, you must project the idea that you are planning on going big from the start.
Once you have selected the few companies you would be happy buying from, you will send them each this message to play them off each other and get better pricing:
“Hello (company / contact), we are ready to move forward with an initial order to test the quality. We would like (number of units) units of (product). What is your most competitive quote for this? Keep in mind that we are receiving pricing from your competitors right now too. Thank you!”
Again, you will notice that you didn’t say “sample” above either. In fact, you should never use that word.
Frame the sample order as an “initial order” to test the quality of the product. It’s the same thing in reality, but the language you use with the manufacturers will affect how seriously they take you.
You should seek to order 50 units or more for your first order. Only ordering one or two products will give the impression that you don’t have the cash to invest and therefore can’t make them any money anyway.
4. Order Samples
When you have received the quotes from the final manufacturers who you narrowed it down to, it’s time to pick the best price and order your first round.
Select the location, whether it’s a warehouse or your home or business, and simply shoot them a message asking them where and how to send the payment and what the delivery date should be.
Now you sit and wait for the product to arrive.
In this downtime, work on your website, your copywriting, your marketing strategy, and other aspects.
When the initial order finally arrives, inspect at least five or ten units for quality level and defects. The last thing you want is damaged or flimsy products. If you are not satisfied, you must contact the factory and ask for changes or simply go through each of your other potential factories until you find one that delivers on your expectations.
5. Create Product Posting
When you have the supply chain intact with a Chinese company you trust, you are close to being in business.
The only thing left to do now is to create your product posting and link it to a buy-now button.
First, take some great photos of your product (links to step-by-step DIY product photo guide) from every angle you can.
The more photos, and higher quality, the better. This is one of the key ways to make your item stand out in a competitive online marketplace. Hire a photographer or use your own phone if you need to, but make it happen.
Now, you will create a product description. When writing this, you will list the actual features of the physical product.
For example, you could create a bulleted list and add a bullet for each feature like color, dimensions, weight, special coatings, warranties, etc. However, simply listing the features is not enough.
You must also connect the features, which are simply characteristics, to the real benefits the customer is getting.
Features and Benefits
For example, if you have a protein shaker bottle that is only .5 ounces in weight, the weight is the feature. The benefit is that your customer doesn’t have to feel weighed down when they carry it around. Connect all features with benefits and you’ll sell more.
In terms of posting your product, create a unique website that you control, Shopify, WooCommerce or Magento are all great options.
Yet, you don’t have to limit yourself to your own store–when you’re starting out you’ll need some other sources of sales. So go where the traffic is already at. You can post on Ebay, Amazon, or anywhere else that allows individual sellers like you to post products for sale.
The more sites you promote on, the more people that will see your stuff and buy it. This isn’t rocket science, just keep cognizant that you don’t get overwhelmed. Master one channel before moving onto the next.
6. Analyze Sales
Okay, so you’ve invested in your first product. You’ve posted it. Now the only thing that matters is the sales.
- Are you making any?
- Is it taking off like a rocket or is your product flopping gloriously?
- And how do you even tell if it’s worth continuing or not?
You tell by looking at the numbers.
Calculate all of your costs, including marketing, hiring, shipping, website fees, and beyond.
Divide your cost by the number of products you have sold. This is your cost per product.
Now look at how much money you have left over in profit once you deduct the cost from each product. This will give you the data you need for the final step.
7. Re-order or Pivot
When you are making more than you spend, you’re good to go; when you’re losing money on each product, you have a hard decision to make. You could risk a few more months and order more inventory but you might lose more cash.
If in doubt, always pivot. Sell the rest of your inventory and use the leftover money to buy a different product from China. Who knows, the next one could be your lucky break.
When it comes to sourcing products from China, there are a lot of moving pieces. Once you know what to do, you can move swiftly with confidence and precision.
However, if you fail any of the steps above, you’re doomed to losing money and time. Make sure you have an excellent product, relationships, happy customers, and tons of profit by implementing each step wisely. Then, sit back and enjoy yourself as the sales roll in and your bank account grows. Easier said than done, but nobody said it wouldn’t be challenging!
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