The Woes of Small Buyers in China
Through AQF and the China Sourcing Information Center, we are constantly in touch with smaller importers who want to start buying in Asia, avoid intermediaries and thus get a higher profit margin. Unfortunately, these small buyers don’t always have extensive experience importing in Asia and are not aware of the risks that they could face while doing business in this region.
Recently we received an email from a small importer and we’d like to share it with you in order to illustrate a situation that unfortunately is not uncommon.
As you can see above, this importer made a very small purchase. The first thing to think of is: is China is the right option to source your products in the case of such a small order? While you can find everything in China, you have to be aware that most of the serious and established suppliers work on large productions and may ask you for a sizable minimum order quantity (MOQ) order to accept your order. If a factory does accept a small order, this order will not be a priority for them and usually they won’t put much care into quality of product. Another option is placing orders with a small factory but then you would be dealing with other problems like poor communication and low reliability.
Based on this information, we believe that as a small buyer you have to be aware of the many risks that you will be incurring. There are myriad options available and after doing your research you may decide that you are better off working with a trading company or a purchasing agent based in China who may offer a higher price but who can supply smaller quantities with other favorable conditions. In this case, after getting some experience and a higher volume, you can start negotiating directly with the factories and cut the middleman out of your supply chain. In any case, for both small buyers and large alike, Quality Control is a must and you should be building room into your margin to cover audits, inspections and lab testing to ensure you get what you’re paying for.
