Chinese Suppliers: How to Find and Verify Great Manufacturers in China
Finding suppliers or manufacturers for your Private Label business on Amazon is a very important step on the road to success on Amazon. Once you have found a product you want to sell, or a niche, or an opportunity that you want to take to Amazon, that you have already deemed as profitable, then choosing a manufacturer of that product is next essential step.
You want to find a manufacturer that is both reliable and reputable. You want to make sure that your supplier has good prices, will give you a great quote, that you can negotiate with efficiently and build a great relationship with. It’s only natural that most of the products on the market today are being manufactured outside of the US, and specifically in China.
Comparing manufacturing in China vs. domestic manufacturing, there are 4 things that stand out the most, making China a better place to manufacture your product for your Private Label Business on Amazon:
- Lower Costs
Yes! It’s definitely true that labor is much cheaper in China than it is in the USA, thus you will have a lower final production cost. The lower the manufacturing cost, the more money you have to market your product and boost its sales.
- Better Service
For a small startup product production, I have come to realize that service is far better in China. In the US you are most likely to be told that you are too small of a business to work with. You may not even get a reply back to your inquiry from the US based manufacturer. On the other hand you will never have a difficulty finding a factory in China that will be willing to work with a small business. Most of the times the relationship that you build with a Chinese manufacturer over time will exceed that from any domestic factory.
- Quicker Production Times
If the Chinese supplier tells you that your order will be produced and shipped in 4 weeks, they really produce your order in 4 weeks. Unfortunately, in the US very often it is not the case.
- Ability to duplicate
Why reinvent a wheel? Sometimes you can find a product that need enhancement based on some other product. Or you have product that you like fit and feel of and just want to private label it. Just ask you Chinese factory to duplicate its dimensions and fit as a way to start defining your own product. And let me tell you, no one does that better than the Chinese.
So, if everything is that simple and great with Chinese manufacturers, what’s the con?
A main disadvantage of working with Chinese manufacturer is the fact that you are at risk of coming across a manufacturer in China that might rip you off. There are many scams, fakes, and just plain bad suppliers out there to watch out for. So verifying that your Chinese supplier is a legitimate business is an important factor on your road to success.
How to verify and find good Chinese manufacturer?
- Use Search Engines and Directories
You can start off with visiting these great resources to find suppliers in CHina: Alibaba, Global Sources, Hong Kong Trade Development Council. Essentially Alibaba has started out as a listing service for factories to contact, and has become one of the most trusted resource these days. I love Alibaba as it provides you with tools that will guarantee that supplier is trustworthy and reputable. One of them is Supplier type filter you can use.
Checking both Gold Supplier and Assessed Supplier will give you almost 100% guarantee that that manufacturer or factory is reliable. Spend few hours reading reviews, emailing your potential manufacturers with questions and your product specifications, then judge suppliers by their replies.
In the same way many other B2B Directories will provide you with tools to filter and review your potential suppliers. An important thing to take into account is how long suppliers have been in business. Most of the B2B Directories will provide you with that information.
Spend time checking shortlisted suppliers’ websites. Go through all their policies (returns, damages, backorders), and make sure they have their contact information and physical address posted on their site.
On top of that use Google to search for combinations like “[company name] + scam”, “[company name] + dishonest”. There will always be a trace left by other retailers if they had had negative experience working with these company names.
- Attend Trade Show
Attending a trade show in China or in the US is another very efficient way to find a reliable factory/manufacturer. Major trade shows will have hundreds of factories from all over the world present with their samples, products and materials.
Hop onto Google and search for trade shows in your area, but remember that you have to find a trade show that has factories exhibiting at that trade show, make sure they have manufacturing section. Major trade shows will have manufacturers from all over the world exhibited there, and that includes China.
While attending a trade show, you can sit and talk with your potential manufacturers in person, and the fact that they have come all the way from China to exhibit means that they are a reputable organization.
- Call them
Scammers avoid putting their contact information online, thus making a single phone call to China will verify if a company is at least half-legitimate business. A fact that they have a landline listed (not a mobile phone number) is another way to verify your supplier. Serious manufacturers will always have a landline phone number listed.
- Check Manufacturers’ Business Licenses
All legal entities in China have to be registered with Chinese government authorities and receive a unique company registration number. Failure to provide that number to you by your request will signify that you are dealing with scammers.
Visiting their local local Bureau of Industry Commerce website you can verify the number provided.
- Ask for References
Absolutely do ask for references from a Chinese suppliers. Ask them to provide a list of customers they`ve previously worked with, if possible – their contact information. Observe their replies.
- Do Get a Sample
Ask for sample for 2 main reasons: to verify the quality of production and to verify that they are willing to provide you with their company`s bank account.
Most likely you will have to pay for that sample, so do insist on wiring money to their bank account. If they are not able to provide that information, then you are dealing with a non-reliable partner.
- Money Transactions
Since we are already talking about money, then ask your potential supplier if it is possible that your agent will pick up and pay for products on site in China from their address. Scammers will never allow it.
TT, Western Union, and MoneyGram are the most popular ways of payment in China, however serious manufacturers will also accept PayPal. Keep that in mind. Never use untraceable wire services.
- Factory Audits
While communicating with you potential supplier, mention that you will have their factory audited before you can place any Purchase Orders with them, and later their produced items inspected before they can ship them. See how they react. If a supplier refuses – it’s a red flag. If it’s ok the with supplier, then you do not have to necessarily audit their factory. It’s another way to verify that you are communicating with a trustworthy supplier.
However, to verify their production capabilities, if necessary, you may initiate an audit. In China, prices vary from $300-$900 for one day of audit in main production areas.
- Visit Factory in Person
And, of course, the best way to verify the supplier is to visit them and their production factory. Visit China directly, set up meetings with your potential manufacturers and discuss products, prices, quality inspection, and delivery time face to face.
Keep in mind that if you do decide to visit China, then you have to shortlist your suppliers, and schedule meetings beforehand.
I am sure that these 9 tips will help you to choose a perfect manufacturer for your product, perform a proper due diligence, and ultimately result in a great success on your Amazon journey.