Working with China suppliers is a smart move for Singapore SMEs who need unique and original products. The country&#;s vast manufacturing base offers a wide range of quality goods at competitive prices.
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While the potential for profitability is great, there are some hurdles to working with China suppliers. You&#;ll need to identify trustworthy partners from hundreds of options and build trust through messaging apps. Logistics like quality control, shipping, and cross-border payments add an extra layer of complexity.
With the right approach, sourcing products from China can be a rewarding strategy for your SME. Let&#;s explore how you can use Chinese supplier websites to identify manufacturing partners. We&#;ll also cover why opening a business account is critical to your financial operations, and how you can use the Airwallex Business Account to pay suppliers without opening a China bank account.
There are compelling reasons to get wholesale products from China. The country&#;s manufacturing sector has strong capabilities, efficient supply chains, and a large workforce, which allows it to offer high volumes at cost-effective rates. This cost advantage helps you maintain competitive pricing in your markets.
SMEs can also obtain a wide variety of products from China. Whether it&#;s furniture, textiles, or electronics, you can find them all in one geographical location. Generalist retailers can benefit from this diversity, as it simplifies the supply chain and reduces the complexity of dealing with wholesalers in multiple countries. China's manufacturing sector can also handle large-scale production due to its extensive infrastructure, which provides the facilities and logistics for mass production, and its vast low-cost labour force. Working with China suppliers enables Singaporean retailers to meet changing consumer demand without significant delays.
Whether it&#;s electronics or textiles, Singapore SMEs can source practically anything from China. Choosing which products to buy is a matter of identifying market trends and consumer preferences that align with your business goals.
Below are some in-demand product categories you may wish to consider.
Furniture. China wholesale furniture suppliers are skilled at producing durable flat-pack furniture for small condos and HDBs. Ready-to-assemble furniture is also inexpensive and easy to ship.
Handbags. China&#;s bag manufacturers may be infamous for replica bags, but they are just as skilled at creating original designs using genuine leather, nylon, or canvas. By sourcing handbags from China, retailers can tap into the latest trends and cater to the tastes of the fashion market.
LED lights. TikTok lights generated incredible demand for LED strip lights and indirect ambient lighting. LED light suppliers in China are at the forefront of this trend, providing a diverse selection of innovative lighting that cater to different aesthetic preferences.
Once you&#;ve selected a product category, it&#;s time to find the right suppliers. Most SMEs use online marketplaces to research suppliers and compare options. These digital platforms are a good place to start, as they offer detailed product listings, supplier profiles, and customer reviews.
Some popular China supplier websites include:
Alibaba.com: Alibaba is the most well-known B2B eCommerce platform. Its search engine helps you to find verified suppliers by product, and buy in bulk directly from the manufacturer. You can also collaborate with a manufacturer to create custom products.
.com: Another B2B platform by the Alibaba Group, offers a rich variety of products with low MOQs. Unlike Alibaba, caters to businesses in mainland China. Overseas buyers may face challenges due to the language barrier, and they may struggle with paying suppliers as they only accept CNY and RMB.
Made-in-China.com: Since , Made-in-China has been connecting businesses to wholesalers across various industries. They also offer services for assessing suppliers, quality checks, and logistics. Unlike other platforms, it does not directly sell products or facilitate transactions on its platform.
DHgate.com: DHGate connects China manufacturers with small global businesses. They have several suppliers that don&#;t require a minimum order quantity (MOQ), which can make them ideal partners for dropshipping.
Shortlisting suppliers requires research and attention to detail. Here&#;s what to look out for:
Verification status. It&#;s best to work with verified suppliers, as they have passed the marketplace&#;s rigorous review process and quality standards. Verification details can be found on the supplier&#;s profile.
Years of experience. Choose a supplier with at least 5 years of experience, as they&#;re more likely to have an efficient manufacturing process and stringent quality assurance systems. Experienced suppliers generally have better customer relations and supply chains too.
Product catalogue. A reputable supplier will have a specialised product catalogue aligned with their niche. For example, an experienced handbag manufacturer should offer a variety of purses, clutches, or shoulder bags. However, a handbag supplier that also sells kitchen goods and umbrellas signals a lack of expertise.
Name and address of the production facility. Profiles without an address are likely sourcing agents or trading companies - middlemen who will connect you to the suppliers and charge a fee for it.
Reviews and ratings. Customer reviews give you a glimpse into what it&#;s like to work with a supplier. They help you understand the quality of products, the supplier&#;s responsiveness, and their production times. You can tell if the reviews are legitimate if the supplier has received them over several years. But if most positive reviews are submitted within a few days, proceed with caution.
Once you&#;ve identified potential suppliers, the next step is to initiate contact and negotiate a deal. However, starting a business relationship isn't as straightforward as sending a Request for Quote (RFQ). You need a clear idea of what you want, and you must present yourself as an ideal buyer.
Follow these tips for effective communication with Chinese suppliers.
The first message you send is the most critical, as this starts the relationship-building process. Avoid sending a generic RFQ, as this won&#;t get a response. Suppliers receive dozens of inquiries from prospective clients, and the most in-demand ones are highly selective about whom they do business with.
Instead, write a thoughtful message that shows you are a serious buyer who&#;s interested in placing an order. We&#;ll cover how to do that in the succeeding sections.
To come across as a legitimate buyer, you need to show that you know your product. Do your homework and be clear about your desired specifications and technical requirements. Once you know what you want, you can start writing to suppliers.
Let&#;s say you&#;re a lighting retailer looking for an LED light supplier in China. Your message must describe the lights&#; intended applications, LED type, colour temperature, installation method, etc. You can even include rough sketches or photos of your preferred design.
This attention to detail makes you a more attractive potential partner and can increase the chances of a response. It also helps you identify which manufacturers are capable of creating unique products for your business.
Knowing basic Mandarin can be an asset, but you don&#;t need to speak the language to communicate with suppliers. Leading B2B marketplaces like Alibaba and DH Gate will automatically translate messages from English to Mandarin, and vice versa. Suppliers who export overseas often have staff members who speak English.
However, complex words and phrases can get easily misunderstood. To overcome the language barrier, you need to make your message as simple as possible. Here are some good guidelines:
Write simple sentences and avoid technical terms.
Write numbers as numbers, i.e. use &#;1&#; instead of &#;one&#;.
Instead of long paragraphs, use lists or bullet points.
Attach as many photos as possible so you can minimise describing your product in words.
China supplier websites have busy interfaces, and it&#;s easy to miss the &#;contact&#; button that lets you write to the supplier. Avoid clicking &#;start order&#; or &#;buy now&#;, as this will let you buy products as-is.
Instead, locate the &#;send message&#;, &#;chat&#;, or &#;contact&#; buttons to start a conversation with the supplier.
As soon as you&#;ve established trust and are satisfied with the supplier&#;s samples, it&#;s time to start negotiating. Here are 3 negotiation points that help set expectations.
Minimum Order Quantities (MOQs). As the name suggests, MOQs are the smallest quantity of a product that buyers must purchase. China manufacturers operate on small margins, and MOQs ensure that production is cost-effective. You'll often find MOQs listed in the supplier's profile. If the standard MOQ is too high for your business, you can negotiate small trial orders or negotiate a higher price for lower quantities.
Lead times. This is the time it takes for the supplier to manufacture and deliver the products. Knowing the lead times is essential for planning your inventory and ensuring that you have products in stock. It's also important to discuss and agree on lead times to avoid any unexpected delays.
Payment terms. These are the conditions under which you will pay the supplier. Common payment terms include a 20-30% deposit, partial payment upon passing quality control (QC) inspections, and full payment upon delivery. Negotiating favourable payment terms is important for managing your cash flow while assuring suppliers that they will get paid.
SMEs have several options for paying Chinese suppliers, such as opening a China business bank account or paying from Singapore via bank transfers and fintech business accounts. Here&#;s a quick view of the international money transfer methods from Singapore and what they cost:
Airwallex
SWIFT/Telegraphic transfer via banks
Wise business
Transfer fees
Free for local transfer methods
SWIFT: $20 (SHA), $30 (OUR)
Varies by bank
From 0.43%
Additional cost for transfers via SWIFT
Transfer speed
0 - 1 working days
1 - 5 business days
0 - 1 working days
Conversion fees from SGD to CNY
0.40%
Yes
From 0.43%
Other fees
None
Intermediary bank fees, commission, fees, account fees etc.
54 SGD to create a Wise business account
Sources: Airwallex, Wise as of 25 March
Due to their long-standing relationship with banks, most Singapore businesses send money to China via SWIFT - wire transfer or telegraphic transfers. However, payments made through traditional banks may be slower than other options and often come with hidden fees, which increase overall transaction costs.
Fintech firms like Airwallex or Wise can be more cost-effective and convenient, as they may offer faster transfer times, transparent fees, and friendlier conversion rates compared to banks. The Airwallex Business Account offers several benefits for SMEs who send money to China:
Convert SGD to CNY at market-leading rates. You&#;ll always see the fees before you send your payment.
No transaction fees when you send CNY to your supplier via your China-registered business, or if the sender and recipient are Chinese citizens. Unlike banks, Airwallex uses local payment rails in Hong Kong and China to send your payment. It&#;s treated like a local transfer, which means you don&#;t have to pay hefty telegraphic transfer fees. For transfer via SWIFT (SHAD), Airwallex charges a standard rate of S$20.
Receive CNY without unnecessary conversion fees. With the Airwallex CNY Account, you can generate local bank details and accept CNY payments without unnecessary conversion to SGD.
Free to open. Create an Airwallex Business Account at no cost, and start using it as soon as you verify your business details.
If you&#;ve clearly defined your product requirements, you&#;re halfway to producing high-quality goods. The other half involves quality control (QC) and compliance with international standards. Here are broad guidelines for ensuring QC throughout the production process:
Visit your supplier&#;s facilities. Make at least one trip to your supplier&#;s production facility. This is an opportunity to see the manufacturing process up close and ensure that the factory adheres to international regulations.
Inspect goods in production. Final inspections are essential for approving the finished product, but try to see the product in the early stages of production. This lets you identify possible QC issues and avoid costs associated with returns or corrections.
Hire a third-party QC service. If a visit to China is not feasible, consider hiring a third-party QC inspector who specialises in your product. A QC service can check and confirm the quality of products before they are sent to Singapore. Some firms can also do an ethical audit to ensure compliance throughout the manufacturer&#;s supply chain.
Your products have passed multiple QC inspections and are ready to leave the factory. All you need to do is understand your shipping options and ensure that you comply with Singapore customs requirements.
Before choosing a shipping method, you must know your budget, what type of goods you&#;re shipping, their weight and size, and how quickly you need them. Based on these, you have 3 options:
Door-to-door express shipping. This service replicates the experience of eCommerce delivery to your home and can send goods as quickly as 3 business days. It is also the most expensive, and only suitable for small packages.
Air freight. Shipping by air costs less than door-to-door, and is suitable for delicate or high-value goods. However, air freight fees are charged per kilogram. The heavier your package is, the more expensive it is to deliver.
Sea freight. Shipping by sea is the most cost-effective option for high-volume goods and heavy loads. For smaller volumes, you can opt for a Less than Container Load (LCL). Its downside is speed - it can take several weeks for a sea freight delivery to reach Singapore from China.
Importers need to follow several customs procedures when importing goods from China. According to Singapore Customs, you need to do the following:
Activate your customs account on TradeNet
Check if your goods are controlled or prohibited by searching the HS/CA product code
Apply for Inter-Bank GIRO, which lets you pay all GST, fees, and charges directly to Singapore Customs from your business bank account
Provide a security payment via a Banker&#;s Guarantee, Insurance Bond, or Finance Company Guarantee
Get your Customs Import Permit through TradeNet
Prepare documents for cargo clearance
Sourcing from suppliers in China gives SMEs an unfair advantage through cost savings, access to quality goods, and scalable manufacturing. To capitalise on these advantages, you need to find suppliers and build trust from Singapore.
Several tools can ease the process. B2B marketplaces like Alibaba let you browse hundreds of suppliers and compare options based on your requirements. Their in-platform messaging apps have translation features that break the language barrier.
Finally, fintech firms like Airwallex simplify cross-border payments to China suppliers, with 70% of payments arriving on the same day. The Airwallex Business Account gives you CNY local bank account details that you can use to invoice customers, hold, and pay CNY without unnecessary conversion fees. You can also convert SGD to CNY at friendly interbank rates and minimise the impact of foreign exchange risks. On top of that, Airwallex has tools to streamline your bill payments, accounting, and eCommerce payments.
Ready to discover how Airwallex can help you grow your business? Open a free Airwallex Business Account today and start sending fast payments to your suppliers in China.
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There&#;s no hard and fast answer for production lead times, as this varies per supplier, product, and project. The only way to find out is to write to potential suppliers with clear product details, specifications, and order quantities. A reliable manufacturer will have a production schedule and provide realistic timelines.
To minimise production delays, check the samples thoroughly and document your feedback clearly. If the sampling and prototyping stage is done well, production should happen as scheduled.
However, be prepared for delays due to unforeseen issues beyond the manufacturer&#;s control. The only way to prevent this is to work with multiple suppliers. If one supplier runs into issues, you can switch to another one without disrupting your ability to serve customers.
To ensure compliance with international shipping regulations, label your packaging according to global shipping standards and prepare all documents required by Singapore customs. Consider working with a freight forwarder that specialises in importing goods from China. They can help you prepare the right documents and avoid issues that can cause delays at customs.
***Note: This publication does not constitute legal, tax, or professional advice from Airwallex nor substitute seeking such advice, and makes no express or implied representations/warranties/guarantees regarding content accuracy, completeness, or currency.
Sources:
https://www.dwell.com/article/tiktok-led-lighting-trends-tumblr-aesthetic-180bfe3b-b7f-710b83de
https://www.customs.gov.sg/businesses/importing-goods/overview/
https://www.tradenet.gov.sg/TN41EFORM/tds/sp/splogin.do?action=init_acct
https://www.tradenet.gov.sg/tradenet/portlets/search/searchHSCA/searchInitHSCA.do
https://go.gov.sg/customs-ibg-form
https://www.customs.gov.sg/businesses/new-traders-and-registration-services/registration-services/security-lodgement/
https://www.customs.gov.sg/businesses/valuation-duties-taxes-fees/permits-documentation-and-other-fees/
https://www.customs.gov.sg/businesses/importing-goods/import-procedures/documents-for-clearance-of-goods/#:~:text=For%20conventional%20cargo%20and%20hand,the%20entry%20points%20for%20verification.
There are many benefits of sourcing your products in China. However, it may take time to find the right suppliers, negotiate, and secure a good deal.
Most suppliers often face many issues when finding a supplier or after going into business with one, the product delivered did not match the specifications and was of poor quality.
It takes a lot of experience to understand the Chinese market and how to deal with suppliers which is why you need all the help you can get.
This article will outline some of the best practices, tips, and everything you need to know to help you source products in China effectively.
Sourcing is when you look for a supplier to help deliver you the best quality of goods or services for your business.
Similarly, Chinese sourcing is when you find quality goods and services with the help of local suppliers in China. Depending on the size of your business, importing goods from China may require many suppliers with different experiences for your industry.
For example, if you're a small business owner, you may require a few Chinese suppliers, whereas large enterprises may require a sourcing company in China.
China is one of the biggest countries that trade globally with supply chains that can serve businesses of all sizes. They can produce, maintain, and distribute products on a large scale.
For this reason, sourcing products in China would already be a good idea. But there's more.
Here are other reasons why you should consider sourcing in China:
If you're looking to source products from China, you might find it challenging. The process is often time-consuming and complex, but it doesn't have to be.
Let's take a look at a step-by-step guide to sourcing in China that can help you navigate the complexities and streamline the process.
If this is your first time sourcing in China, your first option might just be to do a quick google search.
There are many websites where you can get connected with suppliers such as Alibaba and Made in China.
However, it is not easy to distinguish between a reseller and a manufacturer online, so you need to choose carefully.
Websites like Alibaba mentioned earlier can help shortlist manufacturers during your search. These platforms have a feature where they rate different suppliers and manufacturers across China.
It would be best to keep in mind that these ratings might not be reliable as any supplier that pays for the Alibaba premium membership can get a gold supplier rating.
So, you need to take time with your search and conduct additional checks to ensure you have found the perfect supplier.
&#;&#; Pro Tip: It is better to choose a manufacturer when you supply products with technical requirements as you can source directly from them.
If you are sourcing in China for the first time and are willing to spend some money, hiring a sourcing agent might be a convenient option for you, especially if you are looking to acquire products with technical specifications.
Again, this is a convenient option if you want to stay wherever you are and not travel to China to conduct factory and quality inspections.
Your sourcing agent will take care of all of that.
Other benefits include having an experienced agent who can speak the language and negotiate with suppliers on your behalf.
Companies such as Lazpanda have a strong reputation for sourcing products for businesses, saving them time and money, and making the entire process extremely smooth.
Lastly, when you use a sourcing agent, you are far less likely to get scammed or be a victim of fraud.
After making a list of suppliers based on their experience, you will need to verify this information.
Things to verify include whether the suppliers are a factory or just a middleman and whether they have had the previous technical expertise and the ability to produce what you are looking for.
You can verify this information by examining the suppliers' VAT invoices, audited accounts, or the factory's registration records.
You can call the supplier and ask for their registration number and business license number.
While this is not always the case, it is often a red flag if your supplier does not have a landline number and only operates using a mobile number.
Suppose your supplier fails to provide a business license or a company registration number.
In that case, you should avoid doing business with them.
All registration numbers can be verified by the local administrative government or the local Bureau of Industry Commerce.
Lastly, it would be best to ask for references from the supplier's previous clients to verify their history and reliability.
The biggest benefit of sourcing in China is that your cost is significantly reduced due to low manufacturing and labor costs.
When negotiating the price with your supplier, you should remember that all suppliers have a general minimum cost to manufacture the product.
Here is where you need to research the costs of the product and the market price to get a good idea of what a reasonable price is.
With this information, you can tell that when you are offered a price below the market price, the quality of the product may not be the best.
Going below the minimum market price or the product's cost price should be a red flag as the supplier is compensating for something missing that you might not have realized as yet.
To protect yourself from dealing with such consequences, you should avoid working with suppliers that offer you a price that is way too low.
Eliminating the middleman and buying directly from the supplier gives you more control of the entire manufacturing process.
Additionally, you also avoid paying extra fees or commissions to the agent or middleman.
If you have the time and experience to carry out your own search, effectively communicate with suppliers, and oversee the manufacturing process, this is something you should consider as it can significantly lower your costs.
Moreover, communicating and buying directly from suppliers avoids the risk of miscommunications and delays in sending money to China as you no longer have to rely on them.
The major challenge businesses face when sourcing in China is the lack of clear communication due to the language barrier and cultural differences.
Therefore, most of the issues in dealing with suppliers come from misunderstandings and miscommunication.
It may be worth hiring a translator as miscommunication can cause huge delays in delivery and production times, negatively impacting your business and its profit margins.
All technical details such as product specifications, technical requirements, and packaging guidelines should not be arranged orally and should be put in writing in both languages.
You should also make sure to discuss the progress of the work so all issues can be dealt with immediately and ensure that there is a good flow of communication.
Conducting regular quality inspections is crucial to ensuring that your product is made correctly and that its quality is not compromised.
Having a regular check on the manufacturing process ensures that things are not left to the last minute and that any issues that turn up are dealt with immediately as it's easier to fix problems during the manufacturing process than after the final product has been made.
Now that you know the steps you need to take when sourcing in China, it's important to understand some of the important factors, which will be beneficial to you in your journey.
Let's dive deeper into each tip.
After you have spent your time shortlisting and finding a supplier, you have to start negotiating. The goal is to create a situation where both parties benefit.
Before you negotiate, make sure you have all the data and information to present your case. This gives you strong reasons to refute your supplier's claim and that you're aware of the situation.
Other important tips you should consider are:
It is always a good idea to order samples before committing to one supplier and ordering in bulk. You don't want to make a huge commitment and waste money without testing the end product.
When you receive your first order of samples, you should:
If you are not satisfied, you can ask for a second round of samples with the necessary changes made or simply opt for another supplier.
Other factors to consider when ordering your first round of staples are the location of the factory, the payment methods available, and the time it takes to deliver.
Whether you are ordering online or physically going to China to meet your supplier, you should always build a professional relationship with them.
There are many benefits of having an ongoing relationship with your supplier as they may give you discounts and better deals.
Additionally, suppose you are looking for another supplier to manufacture a different product.
In that case, they can introduce you to some reliable ones using their network.
&#;Recommendation: If you are sourcing online, make sure to use applications available in China, such as WeChat, QQ, and Momo to communicate with your supplier.
It is important to keep these tips in mind when sourcing in China, especially if it is your first time.
As a beginner, you do not want to be scammed or taken advantage of, as it can severely impact your business.
Taking your time throughout the process and not rushing things is the best option as you can carefully consider all factors and make an informed decision regarding who and where to get your supply.