Using an Insider in China for Product-sourcing & Dropshipping

Discussion in 'Dropshipping & Wholesale Hookups' started by sinosource, Oct 12, 2018.

  1. sinosource

    sinosource Newbie

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    Hello,

    Many who are engaged in dropshipping -- or would like to be -- are looking for the kinds of products made in China that are typically found for sale on retail marketplaces such as Amazon, eBay, Wish, and so on.

    It is widely known that such products can be procured on Chinese online marketplaces such as AliExpress (wholesale/retail) and Alibaba (wholesale). Despite popular conceptions, however, these are not necessarily the most cost-effective options for online retailers to source products from China.

    One should keep in mind that the abovementioned venues are targeted exclusively at foreign buyers, i.e. non-Chinese consumers and retailers, which means that the prices are likely higher than they otherwise could be.

    Why is this the case?, you may ask...

    In my experience -- as an American who has been living in and buying in China for 10 years -- I can attest to the reality of what I facetiously call the "foreigner discount". This is the phenomenon that foreigners are stereotyped as being relatively wealthy and so tend to be charged higher prices than domestic buyers for the same goods.

    In recent years, popular awareness of the Chinese online marketplace called TaoBao has been increasing. Even lower prices can often be found from sellers there.

    The problem with Taobao, though, is that purchasing products directly is practically impossible for buyers outside of China: the site is presented entirely in the Chinese language, its webserver generally blocks visitors with foreign I.P. addresses, one needs Chinese credentials and/or contact details to sign up for a buyer's account and a Chinese bank account as well in order to pay for purchases in Yuan/Renminbi, and the sellers will not ship outside of China. In order to access the great deals found on TaoBao, those outside of China therefore need to get the cooperation of an insider in China who will buy and then ship the products overseas for them. Now and then, you will see offers from those who are in the right position to perform exactly that service.

    Nonetheless, even those online retailers who are able to circumvent the barriers to accessing TaoBao as a source of supply should not forget that TaoBao is not a wholesale venue at all. It is a RETAIL marketplace catering to Chinese consumers. Given that fact, even TaoBao is not the ideal solution for sourcing products for retail resale.

    To find the origin of the truly best deals for these products, one should really be asking "Where do the Chinese retail sellers on Taobao get their products?". We can assure you that they do not purchase their wholesale inventory through Alibaba. Indeed, the wholesale prices and minimum order quantities quoted on Alibaba are often inflated far beyond what domestic Chinese retailers will tolerate. Nonetheless, the Chinese retailers often buy from the very same factories and wholesalers, albeit through domestic channels targeted at Chinese wholesale buyers. We happen to know this because, for years now, we have been connected to those channels and purchasing products at the same wholesale price levels and low MOQs as Chinese retailers do.

    Assuming you are not in China yourself to supervise your own orders. It's ideal to have a trusted third party there to assist in supplier-selection and monitor incoming wholesale inventory from suppliers. In addition to identifying suppliers, placing orders, exchanging currency and submitting your payment for you, it's in your best interest as a dropshipper to also have your trusted in-country third party receive and check the products to ensure they are what you ordered before they ship them to you or your customers.

    During our time of selling on online marketplaces, we have never allowed for our Chinese suppliers to send products directly to our customers. Although it is a standard practice to do so in the realm of dropshipping, we have always preferred to make the extra effort to receive the products first, do quality control, and then ship them to customers ourselves. After all, we can do that, because we are in China, but we realize that most of you who are reading this are not.

    We have observed a good deal of buyer feedback received by other online sellers who obviously have items dropshipped by Chinese suppliers and find that their customers too often complain of having received the wrong items or, even worse, never received anything. We will be quite candid in our opinion: It should not be assumed, without any prior experience in dealing with them which evidences otherwise, that a Chinese supplier will devote the same level of attention to detail or ethics in fulfilling an order as might be expected from a supplier in, say, Australia, the U.K. or Germany. In our experience, it is best to check everything before your customer gets it. We follow the same principle in sourcing and dropshipping for our clients.

    Primarily, we verify that the products received are of the correct quantity/model/style/color/size, and so on. We also check for any obvious outward indications of damage or defects. In the event that we discover any such error, damage or defect, we seek a resolution from the supplier involving replacement or refund before those products get shipped out. In our opinion, this is an absolutely necessary step to minimize mistakes and unwanted negative feedback that can ruin your online business.

    Regarding shipping from China, there is something I'd like to elaborate on:

    One question we used to scratch our heads over, when selling on eBay, was "How do so many Chinese eBay sellers manage to quote such incredibly low prices on international shipping?".
    It seemed that, somehow, they could get a small item shipped halfway around the globe for less than it would cost someone in the U.S.A. to mail the same item to his neighbor across the street. There was an uproar, to say the least, from eBay sellers whose domestic shipping rates couldn't possibly compete with such low international shipping rates.

    After researching the matter, we identified the methods that Chinese online sellers use in order to take advantage of such low shipping costs and began to implement these ourselves.

    Some insight into how shipping from China can be so cheap:

    ePacket is one shipping method commonly seen quoted on eBay listings from China. This is a low-cost, high-priority, tracked shipping method for small parcels up to 2 kg that was made possible by a cooperative arrangement between China EMS (a branch of China Post) and the U.S. Postal Service. This was designed to promote eCommerce. You can imagine which country's eSellers benefited most. This ePacket strategy has also been arranged between China and many other countries' postal services (as well as among other countries e.g. Korea Post ePacket, Netherlands Post ePacket, etc.). ePackets can only be registered and sent through ePacket service providers who are authorized by China EMS. These are a handful of large-volume international logistics service firms. Even in China, an individual cannot go to a post office and send a parcel using the ePacket method. As a Chinese eBay seller, one has the option to apply for an account to send ePacket parcels through such a logistics firm.

    Yanwen Logistics is one of such authorized ePacket service providers. They are arguably one of the largest and well-known Chinese international logistics firms. We make use of their services to ship products abroad from China. In addition to providing us a channel for using ePacket, Yanwen offers its own brand of international carrier and freight services as well as discounted rates for the mailing and shipment of small and large parcels through the postal services of many other nations (Deutschepost, Royal Mail, Malaysia Post, PostNL, Hong Kong Post, etc.) and various freight services (e.g. DHL, FedEx, UPS, China EMS) to most countries around the world.

    I hope this has been informative and useful to some of you. Feel free to drop me a line if you would like to know more about how we do things.
     
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    Last edited: Oct 12, 2018