Doing business with China today is no less profitable than decades ago. Working with foreign suppliers requires the entrepreneur to be as attentive as possible to all potential risks and costs associated with foreign economic activity.
In the previous article we’ve discussed the basis of working with China:
- Choosing LLC or IP?
- What to buy from Chinese suppliers?
- Resale or dropshipping?
- Where and how to find a supplier?
It’s time for the second article.
How to do business with China?
Search for a supplier on the Internet
If you are planning a business with small quantities of goods, then you can buy them on popular sites.
Here is an example of the most popular Internet sites:
- Alibaba. A site with any goods for business that works with medium and large wholesale. The owners of the Internet site do not control the process of making a transaction, so there are a lot of scammers here.
- AliExpress. Retail online store of goods of most categories with the possibility of a wholesale order. Pluses – a buyer protection system, the presence of a Russian and English interface. Cons – there is no consolidation of goods, you can check the products only after receiving the parcel, the types of deliveries are limited.
- Tmart. A lot of retail products, various discounts and bonuses, guarantees for the return, exchange or repair of defective goods.
- Joom. The online platform sells goods of most categories at retail and wholesale.
The main advantage of these sites is that they are available in different languages, so placing an order will not be difficult. Minus – higher prices, focused on a foreign buyer.
On internal Chinese sites, similar products can cost much less, that is, you can earn more on their sale. The most popular online marketplaces are 1688 for bulk orders and Tmall for retail or small batch orders.
Taobao is a website in Chinese, but you can also work with it in Russian using the Taobao service in Russian. It’s a great business option if you’re looking for trial purchases of items that many vendors don’t want to deal with. Suitable if you buy and sell products in small quantities, such as 10 packs of cosmetics, 3 swimwear, etc. Suppliers of large quantities and high-value goods
How to check a supplier to do business with China?
The reliability of a supplier can be checked in several ways.
- Verification of documents through the Chamber of Commerce and Industry of China.
In this case, it is checked how long the company has been operating and whether it has been operating at all, whether there is arbitration in its practice and on what issues, what turnover the company has according to the submitted tax returns.
- Checking reputation through Internet resources.
Here, as in working with Russian suppliers, you can view ratings on Internet sites, read reviews about the company and products.
- Production inspection.
The person can go to the factory to personally get acquainted with the management representatives, assess the production capacity and make sure that the factory really works, is located at the declared address and produces products of a certain direction and quality.
How to negotiate with a supplier?
When communicating with a Chinese supplier, as with a supplier from any other country, it is important to be as clear, polite, and necessary to clarify all the questions that interest you, and most importantly, do not rely on the supplier to read your mind.
The process of negotiating with a supplier in China is a really long process, it is not enough to ask once and get answers to all your questions. What seems important and obvious to us may be insignificant to the supplier.
However, some Chinese sellers speak English quite well, and a number of large companies encourage their export-oriented sellers to communicate with customers in English. The only difference is that in the supplier’s native language, everything can be discussed in more detail, and the supplier can give a more detailed answer to much more complex questions than simple “availability, how much, what terms” negotiations.
A personal relationship is very important in China. The Chinese people think in the perspective of 5 thousand years ahead – this is a feature of culture. For some business representatives, the behavior of their Chinese partner may seem somewhat slow. At the same time, the Chinese often note the sharpness and some callousness of Russian businessmen. It is very important to develop relationships – a kind word or praise will never go unnoticed.
How to avoid fraud
In order not to get into a one-day company, not to receive defective goods and not to lose the money invested, you need to take a responsible approach to choosing a supplier. If you sign a paper contract, make sure that there are clauses about:
- replacement of defective copies or refund of their cost;
- notification of the customer about changes in working conditions, order picking, cost;
- compensation for long delays in delivery due to the fault of the sender (if he takes over the delivery).
Start by browsing the company’s website. If only the city is registered in the contacts, you should not agree to a deal. The exact legal address and addresses of factories must be indicated. It is good if the company has its own postal service.
If the box is hosted on a free service, it can be assumed that the management does not plan to work for a long time. The account for settlements must be issued for the company, and not for a specific person. Information on the site must be translated into several languages: English and Chinese are mandatory, Russian is desirable.
If possible, go to China in person or send an employee. Ask to see the factory and products, the working conditions of the production workshops. Evaluate the quality of products, find out if there is a marriage, and if so, how often.
Guide to doing business with China in 2022 (p. 2)
Request statutory documents and quality certificates.
If you reach a deal through online stores, see the electronic copy of the agreement: it must be publicly available. It is the same for all sellers and buyers, the conditions are standard. However, even on popular sites, some sellers manage to evade responsibility.
Before placing an order, read what buyers who have already received the goods write. Pay attention to the compliance of the declared and real terms, the quality of the goods, if there is a photo, carefully inspect. If you find at least one negative review, do not transfer money to the seller.
Stay tuned for part 3!
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