Buying in Bulk from China: What You Need to Know

Buying in Bulk from China: What You Need to Know
China wants to sell! That is the entire premise of their economic miracle. The Made in China 2025 initiative means that there are new (probably cheaper) items becoming available almost daily. Does anyone still recall the scepticism that there was in the auto space when Japanese cars first came to market? Luxury brands like Lexus and Infiniti, rival, and in some cases surpass, traditional luxury brands like Mercedes and Cadillac. A similar story is happening with Korean vehicles, but they still have some way to go. China will, at some point, enter this market and it will succeed without question as they have in the technology and other manufacturing spaces.

China wholesale has an entirely different capability than any other nation on earth. An innate ability to create and produce items of a high quality in bulk at a competitive price sets them apart. When deciding to buy from China, whether replacing an existing supplier or entering a new market, security of supply is paramount. It ranks with quality as the two factors that will decide success or failure of a business project. Before deciding whether to buy in bulk from China, obtain a sample of the product and allow your customers to try it out. They do not need to know where you got the sample from but ensure that it is an exact substitute for what it is going to replace.

The China wholesale market is both vibrant and competitive; gone are the old state monopolies and there are now several companies in several regions that can supply goods of high quality, but the price may vary so it pays to shop around.

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Chinese manufacturing and products wholesale
It is vital to negotiate a water-tight contract to ensure that there are no misunderstandings. When importing Chinese products wholesale, negotiating a competitive MoQ (multiple order quantity) is essential. Once the supplier can produce the level of quality required, they will try to recoup their investment in labour and raw materials, by selling you as great a volume of the product as he is able.

It may be time consuming and occasionally confusing but doing the “legwork” yourself often pays dividends. One of China’s most thriving industries is being a middleman. They do not come cheap and there are even middlemen who can introduce you to more middlemen who specialize in a particular product, group of products or regions of the country.

Finding the correct supplier is a minefield and it may be wise to initially work with a middleman but, be warned, they do not always abide by the golden rule; the one with the gold makes the rules!

The middlemen are rarely independent and are trying to be paid from all sides. Yes, they will say they work for you, but they will also be paid by the supplier to bring in new business, possibly the municipality of the region you are visiting, and maybe even a trade association or fair.

do some research with a degree of suspiciousness
To import from China requires patience and a degree of suspiciousness. If a deal appears too good to be true, it generally is. Visit the plant where your items will be manufactured. See, touch, and feel. Understand the process and try to find out who else they sell to in your home market. Do some research. Never, ever, try to negotiate from afar; if your business is worth it, visit China and get a feel for what is happening.

Importing wholesale items from China can be lucrative either as an entirely new product line or as a replacement for an existing supplier. Just make sure of two things; 1) that what you are replacing can be bettered and 2) that your contract leaves nothing to chance.

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About Alan Hill

Alan has been involved in the FX market for more than 25 years and brings a wealth of experience to his content. His knowledge has been gained while trading through some of the most volatile periods of recent history. His commentary relies on an understanding of past events and how they will affect future market performance.”