Product sourcing is the process of locating a product for your business, purchasing them from the manufacturer, and then reselling them. The product can come from a domestic or an international source. If you are a retailer-having a physical store or online, product sourcing is the core of your business. As a retail buyer, the growth and success of your business depend on sourcing the right products to stock your shelves, which can be overwhelming for buyers.No attractive products means no customers and no customers means no business.
China is the fast-growing and largest E-Commerce market in the world. In the past, China was called the world factory. China exported garments, bags, accessories, electronics, and more at leverage. The new export strategy” Made in China 2025″ aims at providing high-quality products and services. Sourcing goods from China is a great opportunity for wholesalers and retailers to provide captivating products at an affordable price.
Here in the context, you will know about the various benefits of sourcing from China.
Cheap Labor Rates
One of the frequently asked questions is, why is it cheaper to make products in China? The answer to this question is the lower labor cost. Labor cost is the main factor that directly affects the overall production cost in the manufacturing sector. With one-fifth of the workforce, it is easier to find plenty of both skilled and unskilled labor locally. Because of the abundance of local labor, sourcing companies in China can set lower manufacturing costs.
Furthermore, various government policies help manufacturers to maintain high work standards without raising labor costs. Most of the workers in China are well-trained and have years of working experience in their respective niches. So, as a buyer, you don’t need to invest time and money in their training, especially if you’re sourcing generic products. You don’t have to face any difficulty in looking for labor, as finding skilled and cheap labor can be taken care of by a product sourcing agent.
Manufacturing Cost Is Low
The main reason that companies source products from China is the low manufacturing cost. China’s tremendous, low-cost labor is only one part of the total cost of the product. Depending on the product, it can be as low as 20% and as high as 70% of the total cost. Tooling and molds can keep your manufacturing cost less. Because of a high volume of material ordered by Chinese companies, the cost of material to manufacture products would be less. The cost of compliance to health and safety regulations and environmental regulation is less in China.
China is one of 150 countries that utilizes a “Value added tax”(VAT) system. It is a tax only on the value added to a product, material, or service at every stage of its manufacture or distribution. Chinese companies receive a VAT refund from the government for materials of products produced for export. Currency manipulation is another reason for low manufacturing costs. China undervalues its currency by an estimated 30%-40%, which makes every product that China ships out 30%-40% cheaper.
Numerous Options of Suppliers
One of the primary reasons to import from China is the expansive supply base in the country. From textile and apparel to electronics and consumer goods, you can find an extensive range of sourcing companies for making any product. China has different industrial clusters consisting of firms and companies located in a well-defined geographical area.
You can find supplier bases for cosmetics in Guangzhou, hardware in Yongkang, and digital and electronic products in Shenzhen. Each cluster has sub-clusters to offer services like packaging, raw material, transport, and quality control. In other words, you have a one-stop solution for your every need.
Best Quality Products
A common misconception about Chinese products is that they are not durable. However, this is not true. Several retailers have already found suppliers offering high-quality products made in China. Most suppliers are well experienced and know the manufacturing process inside out. They know the best and cheapest sources to acquire high-quality raw material and may already have the required equipment to maintain a high-quality standard.
Direct Sourcing
The only way to get good products at a minimum cost and to maintain your profit margin is direct sourcing. Buy products from a chain where there are fewer middlemen. It is only possible when you do direct sourcing from China. Chinese sourcing agents deal directly with your business. It eliminates middle-man involvement, which reduces an incredible amount of money.
Sourcing directly with China allows you to decide your own words, such as high-quality demands and payment circle. Through direct sourcing, buyers can build a friendly relationship with the sellers.
Scaling Opportunities
Chinese manufacturers have years of experience and in-depth knowledge of global supply chain management. They can scale up manufacturing when required. You can increase your sourcing products from thousands to more than a million in just a few days or weeks. The time for scaling-up depends on the type of your product and the availability of raw material.
Sourcing from China is ideal for small-scale organizations as it does not entail them making massive investments to go with their minimum order requirements. It acts as a stepping stone for new companies that are trying to establish themselves as a brand.
Easy To Trace The Process
There are so many websites that act as a third-party platform for connecting buyers with Chinese suppliers and feature a clean layout that is easy to navigate. Some of them are Alibaba, Made in China, and1688.com. These websites give us information about trusted Chinese suppliers and product listings.
Conclusion
Sourcing products from China can help you increase your profit margin, lower labor costs, and ensure uninterrupted supply throughout the year. But, the path to successful sourcing from China is full of dodgy suppliers, incorrect items, long delivery delays, and poor quality shipments. Sourcingriders.com is a one-stop solution for every problem. Sourcing Riders is your ultimate china sourcing partner. Ensure quality products and fast delivery across the globe.
