China is becoming a big player in e-commerce. By the end of the year, experts say there will be about 145 million online shoppers in the country. But people in China are not only buying goods online; they're also exporting them to resellers around the globe as the Internet continues to close the physical distance between continents.
More and more Western merchants are beginning to look eastward to find quality items they can resell online for profit. Learning the ropes of overseas importing takes some time, but the payoff can be big. However, like with any other sourcing venture, having a good experience starts with knowing how to identify a good vendor, who will give you what you want in a timely manner. Below you'll find a few tips to guide you as you begin your overseas sourcing venture.
One of the biggest reasons why China is becoming so important in the online selling world is the size of its manufacturing sector—which gives merchants a wide variety of sourcing opportunities, and helps keep product pricing competitive.
The pervasiveness of Chinese sourcing sites makes it possible for Chinese manufacturers to target a global buying market.
"The Internet has become a powerful medium for content, communication and commerce in China and globally, and this is driving all forms of e-commerce activities," says David Wei, CEO of Alibaba.com, a leading sourcing venue, and the parent company of Auctiva.
Through wholesale platforms like Alibaba.com's AliExpress, Chinese vendors offer a variety of products, from apparel to electronics, to home furnishings. Millions of people around the world frequent sites like these to find the items they want at wholesale prices.
With a large workforce and major investments from both Chinese and international sources, China has emerged as "the world's manufacturing plant," adds Diane Wang, CEO of DHgate. "The amount of goods produced in China is astonishingly high. And with all that production, comes incredible economies of scale."
It's helpful when a sourcing site provides customer reviews and other tools that allow people to learn more about potential suppliers
Feedback builds trust
Potential buyers want to know as much as they can about a supplier before they buy, and any reputable online sourcing site will provide some type of review system of the sellers who use their site to sell items around the world.
"It is very helpful when a sourcing site provides customer reviews, feedback scores, community forums and other tools that allow people to learn more about potential suppliers," says Bolei Shen, a senior product manager at Alibaba.com. "For example, we provide community forums, where both buyers and sellers can discuss their experiences with sourcing, shipping, specific suppliers and more on Alibaba.com and AliExpress.com. The most important thing for customers is to do your research."
Why are comments and feedback so important? Because these tell you a lot about the vendor's attitude, credibility and reputation. The nice thing about seller feedback on AliExpress is that it's displayed in two ways: an overall feedback score and individual comments from past buyers.
AliExpress also has an Escrow service to give buyers even more confidence when they buy. With this service, vendors don't get paid until buyers let AliExpress know they received their orders, and that they arrived as described.
But if you want even more reassurance, do business with AliExpress' "Gold Suppliers." These sellers must qualify for membership on AliExpress—just another way the site aims to keep buyers happy. Gold Suppliers go through an authentication process to ensure they're trustworthy, Shen notes.
Auctiva users can access AliExpress through the Sourcing tab within their Auctiva accounts. If the Sourcing tab isn't displayed when signed into Auctiva, click this link to enable it.
Think like a buyer
Good and constant communication with vendors is also important when vetting a potential inventory source. Just as you, as a seller, encourage buyers to ask questions about your products—whether concerning item details, pricing, shipping, or other details—you should do the same when you're scouting around for overseas products. Contact vendors with any questions you have.
"Communication between buyers and sellers is essential for any deal," Shen notes. "Think about purchases you make on a consumer site. You typically receive an e-mail confirming your order is placed and then a second on when your item is shipped. I recommend the same level of detail—if not more—when you're engaging in business-to-business sourcing. As a buyer, you should ask your supplier as many questions as you can think of, and let them know ahead of time what your communication expectations are."
Ask about shipping costs if this is unclear, ask how quickly they ship, how long it will take you to get your shipment, etc. You might even ask if they'd be willing to negotiate on the price if you think the displayed price is too high. As we explained in a recent article, it's customary for Asian sellers to negotiate prices, so they'll be more than happy to work with you.
"The supplier should be able to tell you what their normal practices are and if they are able to meet your additional requests," Shen continues. "A quality supplier will be happy to negotiate and communicate with you about the process of your order."
To encourage communication between buyers and sellers, AliExpress offers a "Contact the Supplier" section in each Supplier Details. Here you can live chat with a supplier while you're viewing the listing, or e-mail him or her if you don't mind waiting a few hours for a response. Wait time is usually no more than 24 hours. We know this from our own experiences.
If a supplier won't provide references, I'd strongly reconsider working with them
And just because this is online selling doesn't mean you can't go old school. Just as you can ask potential business associates for references, you can do the same online, too. These can be very helpful, says Diane Hessan, CEO of Communispace, an organization that provides companies with consumer insights. You may even want to ask for the name of a seller who stopped using the vender to find out what went wrong with that relationship.
However, it's best to wait to ask for references until you're ready to commit and serious about buying from the supplier. "Just as you don't want to give a vender access to executives unless that's key to moving forward, most vendors don't want you calling their valuable customers if you aren't ready to make a decision," Hessan says.
And if you're worried that asking for reference might be overkill, don't be.
"A quality supplier should be more than willing to provide references," Shen says. "If they won't, I'd ask them why they won't, and then strongly reconsider working with them."
A few more tips
You might even consider doing a credit check on any potential supplier to see if they've had any problems in the past. A Google search is another good option, Shen notes. This will give you a snapshot of what it will be like to do business with a particular vendor. While you won't have to be an expert in this, you should know the basics.
"The Official Alibaba.com Success Guide by Brad and Debra Schepp is a great place to find out everything you need to know to get started," Shen adds.
And take your time when deciding who to work with; never let a potential supplier pressure you into working with them before you've done all your research.
"This is a red flag," Shen says. "A quality supplier will be willing to work with your timeline."
Once you find a supplier you're comfortable doing business with, try it out. We suggest starting with just two or three products from a vendor. This will not only allow you to inspect the item's quality, it will also let you test the market for the items, while also becoming more familiar with the vendor and the sourcing process, should you decide to venture further. Then, if you're happy, contact that vendor again, and buy more!
"Getting started on global trade and international sourcing can be daunting at first, but my biggest piece of advice is to do your research and not be afraid to ask questions," Shen advises. "Also, spend some time understanding what other protections you have."
Learn more about international sourcing, and get started today.