## Sourcing Overview
### Why Source from China
– Cost advantages (30-50% savings)
– Manufacturing capabilities
– Supply chain ecosystem
– Scale and speed
– Technology adoption
### Sourcing Methods
| Method | Cost | Control | Best For |
|——–|——|———|———-|
| Direct Factory | Low | High | Large orders |
| Trading Company | Medium | Medium | Smaller orders |
| Sourcing Agent | Higher | Low | Complex products |
| Online Platform | Low | Medium | Standard products |
## Finding Suppliers
### Online Platforms
| Platform | Type | MOQ |
|———-|——|—–|
| Alibaba | B2B marketplace | Variable |
| Global Sources | B2B, electronics | 100-500 pcs |
| Made-in-China | B2B, industrial | Variable |
| 1688.com | Domestic, cheaper | Higher |
### Trade Shows
– Canton Fair (April, October)
– Yiwu Fair (consumer goods)
– Industry-specific exhibitions
– Hong Kong Trade Fair
### Verification Steps
1. Business license check
2. Factory audit
3. Product samples
4. Reference checks
5. Trial order
## Supplier Evaluation
### Key Criteria
| Factor | Importance |
|——–|————|
| Quality system | High |
| Production capacity | High |
| Export experience | High |
| Communication | High |
| Price | Medium |
| Location | Medium |
### Red Flags
– Unusually low prices
– Reluctance to provide samples
– Poor communication
– No quality certifications
– Negative reviews
## Negotiation Strategies
### Price Negotiation
– Request multiple quotes
– Understand cost breakdown
– Negotiate MOQ and payment terms
– Consider long-term partnership
– Be realistic about margins
### Terms to Negotiate
| Term | Typical |
|——|———|
| Payment | 30% deposit, 70% before shipment |
| MOQ | 100-1,000 pcs |
| Lead time | 30-60 days |
| Warranty | 1-2 years |
| Defect rate | <3% acceptable |
## Quality Control
### Inspection Points
| Stage | Purpose |
|——-|———|
| Pre-production | Material verification |
| During production | Process monitoring |
| Pre-shipment | Final inspection |
| Container loading | Quantity verification |
### Inspection Standards
– AQL (Acceptable Quality Level)
– ISO standards
– Product-specific requirements
– Customer specifications
### Third-Party Inspection
– SGS, BV, Intertek
– Cost: 200-500 USD/day
– Recommended for large orders
– Independent verification
## Manufacturing Agreements
### Key Clauses
– Product specifications
– Quality standards
– Delivery schedule
– Payment terms
– IP protection
– Dispute resolution
### IP Protection
– Register trademarks in China
– File patents locally
– NNN agreements (Non-use, Non-disclosure, Non-circumvention)
– Control molds and tooling
## Logistics Coordination
### Shipping Terms
| Term | Responsibility |
|——|—————|
| EXW | Buyer handles all |
| FOB | Supplier to port |
| CIF | Supplier to destination port |
| DDP | Door-to-door |
### Documentation
– Commercial invoice
– Packing list
– Bill of lading
– Certificate of origin
– Inspection certificates
## Common Challenges
| Challenge | Solution |
|———–|———-|
| Quality issues | Clear specs, inspections |
| Delays | Buffer time, penalties |
| Communication | Local agent, clear docs |
| IP theft | Legal protection, control |
| Payment risk | Escrow, LC, staged payment |
Successful sourcing requires due diligence and relationship building.