China produces inexpensive and unique products. Nevertheless, you need to source the right products for selling at a high margin and drive profitability. So, first, determine how to choose the right products you can import from China.
How to choose the right products you can import from China?
For business success, a good choice of imported product is essential, but it will be based on your budget and demand. The guidelines to choose the best products you can import from China are given below.
Choose a product that helps to build a brand
People easily connect with brands, so choosing a product that helps to build a brand ensures business success and growth. People don’t connect with widely available goods that compete just for the price.
Avoid trendy products
Hyped products are trends that live short. They do not help in building a brand. The originality slowly evaporates. Brand building allows for attracting sustainable profit margins. Even if the products you import from China are hyped and in trend, there is the possibility of unresolved quality issues.
Look for one USP at a minimum
When you import goods from China, there needs to be a single unique selling point [USP], which makes a vast difference in the market. Even a simple logo or fantastic packaging can separate your brand from the crowd. As you are starting go for at least one point of difference and as you create brand awareness implement more improvements to escalate your brand popularity.
Never choose a product you dislike
If you are not passionate about the chosen product you plan to import from China then your ability to market or selling will be restricted. You need to be extremely passionate about the chosen product for business success.
Be realistic about profit margins
There are experts on the internet claiming that businesses can earn ten times the profit on the purchase rate from manufacturers. In reality, the average net profit for products you can import from China is approximately 20% to 30%.
Concentrate more on CPC [cost per click] for products keyword and their monthly search volume rather than profit margins. High-value keywords are costly, so the product chosen will have a low CPC on Google and extraordinary monthly search volumes.
Investigate product sales volume
Use online research tools to analyze the product’s monthly sales data. It is recommended to choose a product with a minimum of 2000 sales in a month. Even check how seasonality can impact the chosen product’s sales.
Bulky products are costly to store and deliver
If you have capital and store space then a bulky product is a great alternative. So, consider the warehouse and shipping costs.
Avoid products that sell below $15
Never choose products that sell cheap, below $15 because you can make a mistake in forecasting the net profit margins while working the overall product costs. The PPC campaigns need funds and cheap products may not be an ideal choice.
Products you can import from China must never be unsafe because product liability and product recalls can damage your business.
Remember everything is not perfect
In the early business phase, it is sensible to stick to a couple of products. After you start building a brand add new product lines. Never try to do everything simultaneously.
Now, you know the product you want to have produced in China. It is time to sort your product specifications.
Your specification document must include –
- Product Description
- Product material
- Product dimension
- Product colors
- Testing requirements
- Label specifications & needs
- Packaging details
Just making a buying decision based on price and factory sales rep is disastrous. Defined product specifications help to compare quotes and decide on the right manufacturer. Even a tiny difference in dimension, material, packaging and paint type can have a huge effect on the price.
Minimize the risk by hiring reliable sourcing agency or company
There are multiple reasons to partner with a reliable sourcing agent in China. Chinese business culture is different but the sourcing agency experts are familiar with it.
- They have the best network of suppliers and find reliable ones offering competitive prices.
- Even if you need product customization, the agency can help because the language barrier and distance are not helpful.
- The agency experts are fluent in English and Chinese as well as knowledgeable in transacting with local manufacturers.
- The best advantage is having a person locally for quality checks. They can talk about the quality issues or concerns directly with the supplier on your behalf.
All sourcing agencies differ, so ensure to look for a credible partner, so the project is handled properly. The cheap price tags of the products you can import from China accompany a lot of risks.
How to find the correct sourcing agent for your product manufacturing in China?
- Check the sourcing agency’s website to identify their English knowledge. It makes communication much easier.
- If the sourcing agent outsources quality control checks then avoid them because the risk of errors in the process increases.
- Expect to pay 10% in commission. If it is less they are creaming off cash from deals [kickbacks from manufacturers] and if it is low then they are not reliable. A good sourcing agent cannot afford low commission rates.
- A good sourcing agency will willingly sign a contract and there will be transparency in the defined process.
- Ensure to choose an established sourcing agency because they care about their business credibility as it has taken them years to reach where they are.
- Check references from companies outside China.
- Never agree to pay pre-agreement charges. An upfront sourcing fee reveals a red signal.
- Make sure that the sourcing agent has a valid license and shares its number willingly with clients.
Retailers or business owners can do product procurement on their own. However, the procurement process needs a lot of involvement and stress. Therefore it is practical to just find a reliable sourcing agency to handle the production process in China, while you operate the other core business tasks.