The idea of purchasing products directly from suppliers based in China is perfect for businesses who want to enjoy cheap prices at reasonable quality for their products bought. Most of the products we see out there in the market today, whether garments, electronics or plastics are mostly manufactured in China which makes perfect sense if you are a businessman purchasing directly from factories or buying from China online to cut out the middleman.
Buying products from China is already a tried and tested strategy for people who are in the retail or e-commerce business. Getting contacts for manufacturers and suppliers who are based in China is not hard to do since they can simply be contacted via their websites and is just one Google or Alibaba away. However, the challenging part is to verify whether the products you are getting are of top quality, legit and can be customised. Simply because you are buying direct from China does not guarantee you are getting what you ordered for. Make sure that you are aware of common pitfalls and trading practises.
In this wiki article, we will teach you some tricks for common mistakes you should avoid when buying white label products from China. These tricks will help solidify your business trade and make sure you are only purchasing products which are legit and have attained quality standards.
1. Do not be enticed by trends
Earning money out of a fad and what is trendy is an automatic option for most businesses out there. A lot of businesses have grown to be successful simply by selling the right products overnight and it was mainly because of this right timing. For example, vape products or fidget spinners have been selling like hotcakes at the beginning. A lot of businesses took advantage of the trend and have become successful simply because of those products alone but later on expanded towards other related products then became stable in the industry.
However, the main issue is the choice of products to sell when the trendy item no longer becomes a fad. In the case of vape products, it was difficult to expand the business by selling other products simply because the vape industry was unestablished and there was no niche to target. When the product went out of the trend and so was the customers while the supply increased steadily.
When buying directly from China, do not let a trend dictate what to purchase from the transaction. Always look forward to have a long-term business and achieve customer retention out of your products. Settling with trends limits your business in terms of timing and it would be difficult to establish an identity as a store. Always look forward in buying products from China simply not because they are part of the ongoing trend or fad but instead think of a long term business.
Also, trendy items are the ones which are easily counterfeited or manufactured by bogus manufacturers at a lower quality. You would not want to be victimized of purchasing fake products simply because you were too excited of buying products from China influenced by the growing trend.
2. Embrace low value products
Low value products are often overlooked when buying in bulk from China because of reasons such as stiff competition, low added value and for having an insignificant profit out of these products considering shipping costs and importing fees. For example, you cannot increase the selling price of hairpins even if you put it inside fancy packaging or improve its aesthetics. The function will remain the same and so it will remain a generic product.
Based on our experience back in 2016, one of our clients started a food container business where they bought direct from China at a very cheap cost per piece. It was generally a brilliant business idea since they can sell it at a higher price later on after importing these products from China. Just serving to the right niche, have some small customisations that no one else has, and market it well, then you can even sell the most mundane cheap items.
3. Consumption products are often the most difficult
Highly consumed products, also known as fast-moving consumer goods, will always have their place in the market due to its consistent demand from consumers–this is what many people often say. However, competition will not always make it to translate into profit when you turn to these often consumed products as items to sell. Always keep in mind that when you buy products from China, these consumption products are automatic choices. If you keep them as an option, don’t be surprised if a thousand other business thought of the same choice as well.
The worst part of choosing highly consumed products when finding cheap stuff from China, there are already established companies and businesses who have been selling this type of products for a long time and it would be difficult for you to put up with them as a startup business. It would be a cut-throat competition and will be a very tough challenge for you to destabilize their sales channels. Additionally, there is often little room for customization and brand building (do you know your toothpick brand?).
4. Large products just take longer to ship–and are less competitive
You probably heard it before: Avoid choosing large sized products when direct buying from Chinese factories because you’d end up paying more for transportation and shipping costs compared to the actual market value of these products. Imagine purchasing wooden cabinets straight out of China and then sell them somewhere abroad. The costs for transporting and shipping these items will be too outstanding to apply on to their selling price and consumers will eventually find it too expensive to purchase.
This is not necessarily true. Of course, you shouldn’t send the wooden cabinets by airfreight obviously. However, sending a 40 foot container from China to North America or Europe is only about USD1,500-2,500 (excluding taxes and tariffs). So if you plan in advance, have the time to wait for a container and a good product, it might as well be big and heavy. It is often even more lucrative because many people are scared off by trading with larger items. It just needs more expertise and planning.
The tips mentioned above will help you avoid common mistakes most importers make when trying to buy wholesale from China and finding a good private label manufacturer. Consider the following tips and you will have less problems later on with your importing business. It’s in general a great idea to try to stay ahead of the curve. Look for things that not many people are doing. If you can spot a trend or find a real niche that is more difficult to move into, it provides tremendous value.