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10 Other Ways to Source Products from China

10 Other Ways to Source Products from China


When you’ve outgrown Alibaba, what are the alternatives for sourcing high-quality products from the best manufacturers in China?

Beyond Alibaba

This post is by Gary Huang, an expert in sourcing products from China and creator of 80/20 Sourcing.

When you think of sourcing from China, what’s the first thing that comes to mind? Hopping on a plane and flying to Guangzhou to find a factory? No, you go on Alibaba!

Alibaba is very popular and accessible, but that doesn’t mean it’s always the best option. Why not? Well, it attracts a lot of middlemen and trading companies, and some of them aren’t upfront about that.

Alibaba is also where your competitors are likely to buy from, so you all might end up selling exactly the same products as them. Perhaps most importantly, some of the best suppliers avoid Alibaba – because they want to find a better class of customer!

So, what are the alternatives to Alibaba? I’ll explore them all here.

Why not Alibaba?

Everyone knows Alibaba is the 800-pound gorilla in the room. They have a celebrity CEO, millions of suppliers and products, and a huge campus in Hangzhou that rivals Google’s campus in Silicon Valley.

But all is not perfect in the land of Alibaba. Here’s why:

  1. Quality. Alibaba has a broad range of suppliers but there are a lot of middlemen, trading companies, and bad apples. You have to work hard to find the good ones.
  2. Diversification. If you are sourcing from the same supplier as your competitors, how will you differentiate yourself? You are likely to end up in a price war.
  3. Choice. Many reliable suppliers purposely choose NOT to be on Alibaba. If you rely only on Alibaba, then you will never find them.

I’d like to show you ways to find suppliers beyond Alibaba to help grow your business.

1. Global Sources

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Global Sources has over 45 years’ experience in international trade. They offer an online directory of suppliers similar to Alibaba, and organize trade shows in Asia.

What’s the difference between Alibaba and Global Sources? Overall I feel the quality of suppliers on Global Sources is higher than those on Alibaba. They often have more experience in the export market, so they’re more likely to understand your needs. Also, you tend to find less suspicious factories than on Alibaba. In fact, many big-box stores use Global Sources as part of their sourcing strategy.

On the other hand, these suppliers expect more from you. Normally they will ask about your company background and your purchase volumes. It’s only fair that they want to see if you are the right fit for them. So, sourcing from Global Sources may take more initial work to build trust and get thorough replies from suppliers.

Many suppliers listed in Global Sources’ online directory also exhibit at their offline fairs, which adds to their credibility. They are willing to invest time and money into buying booth spaces, so have more skin in the game than an online middleman who can disappear overnight.

This is not to say there are no trading companies on Global Sources. There are middlemen and trading companies on Global Sources, but they tend to identify themselves that way so it feels more transparent than on Alibaba.

Global Sources has a broader pan-Asia focus than Alibaba, and offers a better user experience for buyers in my opinion.

Pros:

  • Arguably higher quality suppliers than Alibaba and less hidden middlemen
  • Strong in mobile electronics, fashion accessories, home and gift items
  • Better user experience for Western buyers

Cons:

  • A smaller selection of suppliers than Alibaba
  • Requires more work to get quotations – you must prove yourself to suppliers

2. DHgate

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DHgate is an online directory of suppliers that targets small-volume buyers. The main advantage is lower MOQs (minimum order quantities) – as low as one piece.

There are a large variety of products on DHgate, so it can be a good resource for certain niche items. They also include an escrow service to protect you.

Pros:

  • A large variety of products
  • Lower MOQs
  • Escrow service – DHgate Buyer Protection

Cons:

  • Higher prices (at least 25% more)
  • Dealing with middlemen – higher prices, hidden factory, risk of disappearing overnight
  • Difficult to establish long term relationship with the direct manufacturer
  • Beware defective and counterfeit products

3. AliExpress

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AliExpress (owned by Alibaba) is like eBay, with sellers from China shipping to buyers around the world. They sell individual items and small wholesale lots. This is good if you want to test the waters with a small order, or to sell locally.

AliExpress if fine if your volume is small or if you’re just starting out. I don’t recommend it if you want to build a scalable business, because you are likely to be dealing with a middle man who will not reveal the factory to you. This means you won’t get the best price. Another major disadvantage is that you are not building a relationship with the supplier, which is critical if you want to build a sustainable business.

Pros:

  • Find the same products as those offered on Alibaba
  • Lower MOQs
  • Escrow service for added protection (but you pay more)

Cons:

  • Higher prices (at least 25% more)
  • Dealing with middlemen – higher prices, hidden factory, risk of disappearing overnight
  • Difficult to establish long term relationship with direct manufacturer
  • Beware defective and counterfeit products

4. 1688.com

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1688 is an online directory of Chinese suppliers, and is also owned by Alibaba. The big difference between 1688 and Alibaba is that suppliers on 1688 cater to the domestic Chinese market.

Why does that matter? Well the quality standards in China are usually lower than those found in the U.S., U.K., Germany and other Western countries. So, suppliers on 1688 are used to producing lower quality and lower price products.

Another issue is that most of the suppliers on 1688 do not have export licenses. This means that they cannot legally ship products outside China, and will have to deal with an intermediary company with an export license. This adds costs and complexity to the supply chain.

Finally, the 1688 website is entirely in Chinese. The suppliers usually do not speak any English, because they only cater to the local market. The language barrier will make communications very challenging, unless you happen to know Chinese.

On the other hand, 1688 does offer some benefits. First, you can find direct Chinese suppliers that you will not find on Alibaba. The main reason, however, is that they are not selling to the export market and their products may not be a good fit for those markets either. Prices can be very low, as suppliers are sometimes willing to survive on wafer-thin profit margins.

1688 can also provide market intelligence on pricing and product availability that would be difficult to find elsewhere.

Overall, I do not recommend 1688 for most businesses sourcing products to sell on Western marketplaces.

Pros

  • Suppliers that are not listed on Alibaba
  • Find potentially rock-bottom pricing on products
  • Gather market intelligence on pricing

Cons

  • Potentially lower product quality and poor fit with western markets
  • Most sellers do not have the capacity to export so you will need to go through a middleman
  • Language barrier if you don’t understand Chinese

5. Trade shows

Trade shows are a great way to meet many suppliers quickly. Chinese culture is deeply rooted in relationships. Meeting suppliers face-to-face can build those relationships quickly and help motivate suppliers to compromise on price, payment terms, packaging, product modifications, and more.

Trade shows are also a great opportunity to browse and discover new products. Many suppliers will not reveal all of their products online, especially the new products, to protect themselves from their competitors. However, if you meet them face-to-face they will be more willing to show you their full range. The best products are often behind closed doors.

I will focus on three types of trade shows here: general trade shows, industry-specific fairs, and regional marketplaces.

General trade shows

General trade shows include the famous Canton Fair and the Global Sources Gifts & Home Show. These are good if you don’t have a specific product or category in mind, and are open to new product ideas. This is also a good way to identify new trends.

The disadvantages include being unfocused and the risk of wasting time just wandering around. The Canton fair is HUGE and you can easily spend several days walking around the place. There is a broad range of quality, prices, middlemen, and even scammers there so be aware.

The Canton Fair runs in three phases, so do your homework to find out which phase has the products that you want.

Industry-specific fairs

For a more targeted approach, there are numerous industry-specific trade fairs including HKTDC, Global Sources, MAGIC for fashion, CES for electronics, Intersolar for solar, Automechanika for automobiles and parts, and the list goes on. This can be a quick way to meet many relevant suppliers. Also by meeting face-to-face with suppliers you can gauge new trends, products, and pricing all in one visit.

Note, however, that these fairs typically meet only once or twice a year so you must plan ahead. It may not be cheap when you consider airfare, hotel, ground transportation, visa, entertainment, etc. depending on the specific location.

Regional marketplaces

Two of the most famous regional marketplaces are the Yiwu Market and Shenzhen Electronics Market (Huaqiangbei). They are a good way to get a quick feel for products that are made locally.

Another good thing about these marketplaces is that they are open to the public. This means you can walk around and touch and feel the products. It’s a great way to identify products you may have overlooked online. Moreover, you can buy as little or as much as you’d like. Keep in mind however that most of these vendors are middlemen.

6. Factory visits

Factory visits are among the best ways to vet a supplier. Taking a trip to the factory allows you to see their facilities, workers, equipment, and production line, as well as sit down with management and tell them about your business.

But of course this takes more time and money. You might find it useful to use a guide or sourcing agent to help with travel arrangements and dealing with suppliers.

7. Referrals

Just like doing business anywhere, referrals can be a powerful tool when finding suppliers. Through friends, business acquaintances, online platforms and social media you may be able to find hidden gems.

One of the ways is to ask suppliers you are already working with. Because of the “guan xi” effect there is “face” involved which creates a greater incentive to make it work and not screw around. In other words, the stronger the family ties or friendship, the more social capital there is at stake to make it happen.

On the other hand, the referral may not be based on objective criteria or measurable benchmarks, so you still have to do your homework. Also beware hidden markups, because everyone needs to be “taken care of”.

8. Matchmaking events

As your purchase volumes grow, consider using the matchmaking services offered by some sourcing platforms and trade shows.

For more established buyers, Global Sources offers private sourcing events where they will organize meetings with suppliers, matched according to your buying requests. This is a great way to save time and meet many suppliers quickly. You still have to do your due diligence, but I found this saves me a lot of time in quickly meeting many targeted suppliers.

On the other hand, do you trust their ability to find the right supplier for you? Remember that their scope is limited to their own platform, and this service may not be available to everyone.

9. Sourcing agents and trading companies

Depending on your needs and budget, it may make sense to outsource this work to professionals. This will save you time and headaches so you can focus on your strengths to grow your business.

Generally speaking, sourcing agents and trading companies have advantages in that they can find better suppliers through their networks, pick up on red flags faster, optimize logistics to save you time and money, and may be able to negotiate better pricing and terms with factories.

On the other hand, there are good ones and bad ones, so you have to find the right one for you. This service will also result in additional costs.

10. Customs import records

Many smart businesses use customs import records to find the suppliers who their competitors or other companies in their industry are using.

The thinking is that if you are selling shoes and find that a particular factory in Vietnam is already supplying shoes to Nike, then they probably have the capabilities and quality standards needed to manufacture shoes for you as well.

You could also assume that Nike has already done the due diligence, supplier audits, product development, and safety and ethical checks for you. So you lower your risk by going with a supplier that is already manufacturing for a competitor or a company in your niche.

U.S. customs import records can be searched for free at Port Examiner, while Import Genius and Panjiva offer more sophisticated paid services.

Recently Jungle Scout released a Supplier Database feature that lets your search for import records based on the importing company and product names. This is a great way to shortcut the process of finding qualified suppliers.

In Summary

Sourcing is not a one-size-fits-all discipline.

Alibaba may not have the best suppliers for your needs so it makes sense to look at other sourcing platforms as well as trade shows, factory visits, referrals and other tactics.

Find the right channels which work for your business, and forget about the rest.

I hope this was helpful! Please visit 80/20 Sourcing for a free RFQ template and quick cheat sheet of where to look to source beyond Alibaba.

This post was by Gary Huang, an expert in sourcing products from China and creator of 80/20 Sourcing. Gary teaches online sellers and small business importers how to save time and make more money when sourcing from suppliers in China.



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