A Guide To Sourcing Products from Wholesale Markets in China
September 14, 2018
Chinese wholesale markets are a great tool for anyone looking to experiment with importing goods for their small business. In this guide we will cover wholesale markets in China, important tips on dealing with wholesale suppliers and importing.
Why source from wholesale markets in China?
Wholesale markets in China are a great source of goods for resale, especially for those looking to test selling products via Amazon, small retail or e-commerce websites. Buyers that may be concerned about the quality of Chinese products will find confidence in face-to-face meetings with sellers and the ability to handle the goods directly.
Wholesale sellers also have the benefit of shorter waiting times and MOQs (minimum order quantity). Some will sell very small orders and samples to get you started. This can be preferable to a risky bulk-buy on an untested product.
Wholesale market locations in China
Many business owners in North America will talk about the scale of Yiwu, China. As a city, it isn’t that large compared to the more well-known Chinese destinations. Yet, the city holds what the UN and World Bank call the “largest small commodity wholesale market” anywhere on the globe. It would be easier to list what isn’t available here – the range is that broad.
The Yiwu International Trade City can be overwhelming to visitors. But, there are few places better suited to foreign exports.
Then there is the alternative option of Guangzhou. There are many wholesale markets here with goods across multiple industries, though textiles are probably most popular. This region is a great choice for quality goods and strong deals – as long as buyers have the right attitude and agent. Whichever market or region you choose, it helps to do some research first.
Some Chinese wholesale markets include:
- Guangdong Foshan Lecong furniture show center, Foshan (close to Guangzhou)
- Shenzhen Electronics Market
- Wan Ling square Gift and Stationary (Guangzhou)
- Guangzhou White Horse (Bai Ma) garment wholesale market
Travelling to Wholesale markets in China
China is served by several major airports with direct international routes (Beijing, Shanghai, Guangzhou, Shenzhen to name a few). Depending on the location of the market of interest, you may need to take a train, bus, taxi, or subway to reach your destination.
Before embarking on a trip to China, keep these general China travel tips in mind:
- You will need to apply for a visa to enter China beforehand.
- Consider timing your trip during trade fair season so you can double your impact.
- Avoid travelling during the weeks before and after Chinese New Year.
- The internet is censored in China. Download a VPN that works in China in order to stay connected.
- Air pollution can be severe at times. Consider bringing a breathing mask.
- Download a translation app. Google Translate can translate Chinese character from your smartphone camera in real-time – very useful.
Important things to remember when dealing with Chinese wholesalers directly
Some small businesses will choose to work entirely online and use a third-party agent to negotiate deals. Other entrepreneurs will prefer the opportunity to head out to China on a business trip. This is a great way to learn more about the region and the market. There is also no better way to understand the scale of these wholesale markets, nor the quality of the goods. There are some important things to remember with any direct, face-to-face business deal in China.
Body language and respect
Some small business owners could be forgiven for assuming that these wholesale markets are a more casual setting. However, respect and etiquette are essential in any meeting or transaction. Simple considerations go a long way. Chinese business owners respect those that are honest and authentic, so don’t put on too much of a show or try too hard. Forming a friendly relationship before talking business is also very common in China.
Business cards play an important role in these face-to-face transactions in China. They are treated as an extension of the business owner, not just any old piece of card. Therefore, you must remember to present and receive cards graciously with two hands. Place their card into a card holder, not a pocket. It is also important to remember to present the card with the Chinese language side facing the seller. Bilingual business cards are a must in China.
The language barrier:
This issue with the bilingual cards leads us to another important point – communication between English-speaking business owners and Chinese sellers. Never assume that the seller will speak English. They may know a little, but maybe not enough for a clear business transaction. Mandarin is the official language, with Cantonese also widely spoken in markets in Guangdong province. This is where it helps to hire sourcing agents or interpreters for clear communication.
Paying for the goods.
Once you have negotiated a deal – either for samples or a more steady supply of goods – you need a secure method of payment. Many sellers will prefer to deal through wire transfers or PayPal accounts. Wire transfers are a little more high risk, as are credit card transactions. This is because it is harder to handle refunds or disputes that may come up with less reputable sellers. Again, that early research should help you avoid these sellers.
Getting the goods back home.
Finally, you need to work out how to ship your products from a wholesale market back to your business. Some sellers will make this all sound pretty easy. They will set up the shipping and put in the hard work as long as you provide the right address. However, there are some important considerations here.
First of all, make sure that you are clear on the shipping costs. Have the sellers added this into the final price, or is there an additional fee on top? This is where those native-speaking agents are really helpful.
Then there is convoluted process of setting up the shipping account in the first place. Once you have an account, the process is pretty simple. But, it can take some time and patience to set everything up. For small orders you can use local Chinese shipping agencies. For more complicated goods you may need to enlist the help of a freight forwarder.
Success all comes down to the right research, markets and business negotiations. Small business owners that follow all of these steps should find themselves on the right path to a successful business relationship.
There is a lot to consider when sourcing products from wholesale markets in China. But, it is worth taking the time to research the right markets, payment methods and shipping processes. It also helps to learn more about Chinese cultural expectations and to hire an agent. The more effort and research you put in now, the smoother the process and better the outcome.
Rachel Mok writes about entrepreneurship in China at Startup Living China.