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Finding China Beyond Alibaba
Since 2008, Gary has been working in the field of outsourcing and is the founder of 80/20 Outsourcing, which provides small businesses' on-line vendors and distributors with a way to learn how to spend less and earn more when buying from Chinese vendors. The article was initially written in three parts on 80/20 Sourcing: Gelbe Seiten, on-line outsourcing for short runs and on-line, off-line and think outside the box.
If you are thinking about buying from China, what is the first thing that comes to your minds? You' re going to Alibaba! Can you really find the right suppliers on Alibaba without being cheated? Get ting the wrong one? Unless you are learning otherwise from this essay, here is the takesaway - Alibaba is an on-line listing, just like the yellows pages.
With other words, there is a list of vendors and you should not rely on Alibaba to check them for you. That'?s what "gold sellers" are. To a certain degree, Alibaba checks suppliers' information, but does not believe naive that the insignia "gold supplier" means that they are a good provider. After my experiences in working with China companies, I don't rely on anyone unless they show themselves to me.
I' m not saying that all vendors are mad. However, they must gain your confidence through their action. A lot of good intending vendors may have bad communications capabilities, poorly aligned QA requirements, malfunctioning vendor management systems and other issues. Conversely, if you are a multi-national company such as Walmart, Target or Carrefour, you have a complete supplier management division and a purchasing group to monitor your supplier's compliance and due care.
You can use Alibaba as part of your outsourcing policy, but it will definitely not be the only one. I would like to show you how you can go beyond Alibaba to find vendors who can help you build your businesses. Alibaba has a wide variety of vendors, but there are many distributors, retailers and poor quality apple.
Diversity - your competition is sourced from Alibaba. But if you buy from the same vendor, how will you differ? Price? And I don't know, but every time there's a price war I think it's a competition for the bottom and there's no cash to make. Wise men will find singular vendors who supply sophisticated products at competitively priced rates.
I' ll show you how you can find a supplier beyond Alibaba to distinguish your products from your competition. A lot of good sellers are NOT on Alibaba. You really think all China vendors are on Alibaba? Indeed, I have worked with many trusted vendors who have consciously chosen NOT to be on Alibaba.
Alibaba, you'll never find her. They might think, "Why aren't they on Alibaba - isn't this the number one market place? "That' re right, but the same low standards of workmanship you apply to Alibaba vendors, they apply to you the purchaser!
Publish a blind RFQ to tens, if not even hundred, of your vendors at a time with no serious intentions to buy. There are so many top sellers who don't care about Alibaba who want to get involved with serious shoppers. Best of luck finding Apple's contracted Foxconn on Alibaba. In order to enter on-line procurement, you must first determine what kind of vendor you are looking for.
But before we do that, you must first determine your needs: what kind of search engine you are looking for, how much you need to launch and in the event your company goes up, your budgets and your time axis. Of course, if a vendor makes the right products, but has a min. order of 1,000 pieces and you only need 5 pieces, it won't work.
First, put together a RFQ, then choose the right platform to link up with the vendors in your baseball stadium. They may think: "Why do these vendors provide such small volumes? They could also have an order cancelled due to poor workmanship or defective work. However, some providers also provide free delivery, so it is relatively simple.
At the other end, you anticipate paying a higher price, usually at least 30% more than a bulk order in a plant. Please also be aware of possible issues with your products, as there is a potential danger that they may be faulty. Rather than asking for a pattern (not costing so much for such a small order), before ordering ask for a photograph of the original item and package so you can "see" if there are any issues.
Ask also if these products have any faults. If you want to test the water with a small order or want to buy it local (e.g. Craigslist, exchange exchange, brick and grout, etc.) I know some folks who buy AliExpress to use it for themselves.
That means you don't get the best price. If the situation is not good, such as low product qualitiy, missing shipments, communication errors, etc., you can let them go. Here you will find the same products as on Alibaba. Disadvantages: Higher price (at least 25% more). Handling intermediaries - higher price, concealed plant, chance to disappear over night.
Look out for faulty and fake products. The DHgate is a further on-line register of vendors aimed at small customers. User reports that there is a greater diversity of products on DHgate so it can be a good source to supplement AliExpress or for certain Niche products. Greater product diversity. Disadvantages: Higher price (at least 25% more).
Handling intermediaries - higher price, concealed plant, chance to disappear over night. Look out for faulty and fake products. Meanwhile, you have your products approved and are prepared to place bigger orders. The right supplier can be found at this stage on-line, off-line and, as I call it, "thinking outside the box".
Everybody knows Alibaba's the 800-pound heavy leprechaun in the room. They' ve tracked down tens of thousands of suppliers and products, and they' ve got a massive Hangzhou warehouse competing with the Google Silicon Valley warehouse. Alibaba isn't a country where everything's just right. They not only have a concern with the overall workmanship of their supplier, but also with the workmanship of Alibaba customers.
For his own good, Alibaba has become too beloved and our vendors know it. Alibaba will get your ass soaked. A lot of better vendors are conscious of this and have said to me that they consciously shun Alibaba. It is also well known that Alibaba is stuffed with intermediaries or outsourcing "agents".
Best of all, they may be able to offer you the desired products at a slightly higher price, which may include the profit margins. How can you be trusted? Filthy secret: How do you know that your outsourcing agents will not suffer a setback from your suppliers? However, it makes good business sense to look beyond Alibaba when purchasing products from China.
Worldwide Sources has more than 45 years of trading expertise. Starting as a medium enterprise with a printed catalogue of Asiatic providers. Later, they developed further and began to organise fairs in Asia. Your on-line index began in 2003. You provide an on-line supplier listing similar to Alibaba. As a rule, these vendors have more exposure to the exporting markets.
They also have an off-line part that Alibaba does not have. First, they organise exhibitions, which take place in spring and autumn, mainly in Hong Kong. Exhibitions are an ideal way to get to know your supplier, to establish a relationship, and to get in contact with and experience your products, all of which I will go into later.
What is the discrepancy between Alibaba and Global Sources? All in all, I think that the supplier qualities on Global Sources are higher than on Alibaba. Besides, you have a tendency to find fewer suspect plants than Alibaba. Indeed, many big boxes use global sources as part of their outsourcing strategies. On the other hand, these vendors are expecting more.
For example, global procurement may require more start-up work to establish confidence and receive thorough responses from vendors. And the fact that many of the vendors in Global Sources' on-line list also display at their off-line exhibitions contributes to our trustworthiness. Specifically, since they are willing to spend a lot of effort and effort on purchasing stand space and displaying it at trade shows, they have more of a stake than a pure on-line broker who can vanish over night.
That is not to say that there are no commercial enterprises on the Global Sources website. Intermediaries and retailers exist on Global Sources, but they have a tendency to feel more identifiable than on Alibaba. In my view, the global origins of Global Sources create a better consumer environment for shoppers.
The Global Sources company was established by an American and has a wider pan-Asian perspective. Probably higher value than Alibaba and less concealed intermediaries. Off-line fairs are an ideal way to personally connect with your supplier to establish confidence, get immediate response, bargain better prices and conditions. Disadvantage: Smaller choice of supplier than Alibaba.
Needs more work to get quotes - must stand the test with more selective vendors. According to Alibaba and Global Sources, there is a big decline in terms of choice and product range. If you are taking on the 80/20 roll, you should not be concerned with these other on-line portals, as most of these vendors can be found on Alibaba and Global Sources.
If you apply this to procurement, you will often just be earning brokenie points in the relation. They can be motivated to approach your price targets and be flexible with regard to payments, packing, product modification and more. That' s why it is so important to get together in person, and fairs are a good way to get to know many different vendors quickly.
Therefore you should always see the oldest individual at a personal appointment. Exhibitions are also a good way to find new products. A lot of vendors will not publish all their products on-line, especially the new products, to help keep their competitors out. But if you can talk to your supplier in private and show yourself to be a trusted purchaser, you are ready to open the canvas.
I have noticed, for example, that providers with new, cutting-edge products will not show these products off specifically to the general public and to their competition. That is why the best products are often behind locked door. They will not be found on-line unless you have established a close relation with the vendor.
These are many kinds of exhibitions, and I will concentrate on three: general exhibitions with a wide range of products, industry-specific exhibitions aimed at a particular sector (e.g. electronics), and local market places that spotlight local vendors. Among the general exhibitions are the renowned Canton Fair and the Global Sources Gifts & Home Show.
They are good if you have no particular products or categories in mind and are open to new products. In addition, there is a wide spectrum of qualities, pricing, intermediaries (agents) and even fraudsters, so be careful. It' worth doing your own housework to find out what stage the products has that you want.
To take a more focused view, there are a number of industry-specific exhibitions such as HKTDC, Global Sources, MAGIC for Mode, as well as Consumer Electronic, Industrial Electronic, Automotive and Parts, and the listing continues. It can be a fast way to reach many important vendors. You can also record new product and price developments in one single session by talking to your supplier in person.
However, please be aware that these exhibitions usually take place once or twice a year, so you need to make plans in advance. Yiwu Market and Shenzhen Electronics Market (Hua Qiang Bei) are two of the best known local exhibitions. It is a good way to get a fast feeling for products manufactured on site.
That means you can run around and move and move the products. It' a great way to pinpoint products you may have missed on-line. Many of these trade shows provide on-line registrations, so make sure you make your reservation in advance to help reduce your workload. Besides, it's a good suggestion to check the show list before you get there. There is a vast fairground and it is easily getting out of hand, so I always write down the stand numbers of the vendors I want to see and then use them as a guideline to help me plot my assault.
Worldwide Sources - Your exhibitions are focused on electronics, home and gift, fashion products. The HKTDC - Hong Kong'' s Trade Development Council provides many industry-specific fairs and exhibitions located in Hong Kong. There is agreement in the outsourcing world that Canton Fair is "dying". A further way to find interesting fairs is to ask your vendors where they are going.
It is a good way not only to personally see them and save a journey to the plant, but also to find extra vendors. Should a vendor fail, you need a schedule letter and participation in exhibitions and shows and obtaining their contacts is a good way to do so.
When you take a tour of the plant, you can visit its facility, staff, machinery and manufacturing line, meet with managers and resell through your company. As you do businesses everywhere, recommendations can be a mighty search engine for vendors. You can find concealed gemstones through your boyfriends, buddies, or on-line sites and via your people.
Asking your supplier with whom you are working is one of the options. If your purchasing volume is growing, you should consider using matching service that can provide on-line procurement and off-line exhibitions. Global Sources provides a face-to-face off-line matching event for more experienced shoppers, where they organise supplier appointments to match your purchasing needs.
It is a great way to conserve your valuable resources and quickly reach many of your vendors. Indeed, Global Sources will do most of the preparatory work for the preparation of the future business sessions. Whilst you still have to exercise due care after the appointment, I have found that this has saved me a lot of valuable times as I can quickly reach many target vendors.
At the same on the other side you rely on their capability to find the right vendor for you? In general, procurement agencies and retailers have the advantage of finding better vendors through their network, picking up red-flag flags more quickly, optimizing supply chain to conserve resources and saving costs, and possibly being able to bargain better prices and conditions with mills.
Outsourcing is not a one-trick-bony. Because Alibaba may not have the best supplier for your needs, it makes good business sense for Alibaba to design a tripartite attack: on-line, off-line and out of the ordinary. Dependent on your needs, you should make an "80/20" to find the right formulation on which you should concentrate your procurement efforts.