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Veteran Inside: True China Supplier Hookups + Looking for Serious People for JV

Discussion in 'Dropshipping & Wholesale Hookups' started by sinergy, Dec 13, 2012.

  1. sinergy

    sinergy Newbie

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    Hey guys, I've got some time to kill, so I'm gonna share some info.

    Here's the deal. First of all, I'm not selling anything. I'm just killing some time here and got some ideas while browsing the forums, so I'm sharing some things I picked up in my own business.

    I've been in the China sourcing game for 12+ years full time, rather overtime. Started with my first order of Pokemon TCG boxes to resell on eBay and Yahoo Auctions and haven't stopped the process since. I've gone through a lot of BS and lost a lot of money in the past (still do sometimes - always learning) but I've made up my losses 1000x over. Most of my experience has been in buying from China and distributing to eBay Powersellers and retail/wholesalers. The eBay stuff is on autopilot now and these days, I do liquidations & warehouse clearings shipping container loads overseas. This way, I get to stay near Los Angeles, my hometown, instead of flying overseas all the time.

    >

    Few things I've learned over the years:

    -Where are the cheapest suppliers? Easy answer. China. Cost of living, large job pools, and huge supply of workers creates the cheapest price on products, period. And it's only getting bigger.

    -Made in China used to mean cheap. Now, everything is made in China and their improved quality is industry standard.

    -There are thousands of Chinese suppliers in any given category acting like they are manufacturers, but most are actually wholesalers.

    -Many (and I mean, almost all) suppliers mock up a website with pictures showing a factory w/ assembly line that isn't theirs. I know because I've visited many. On my first business trip abroad, I went to see a long time supplier contact of mine and was shocked when I saw that they were operating out of a tiny office with no factory when they posed as a leading manufacturer for years. I found the actual manufacturer and realized my source had been making a 35% cut on top the whole time. Hundreds of thousands of dollars wasted on the middleman. I almost lost my business while dancing near the red line between profits and losses, while these guys were making an easy buck. But, the good news is, that one visit made me way, way, way more profitable.

    -Where are the real manufacturers? Excluding name brand manufacturers like Levi, Lego, Yamaha...white label manufacturers (generic products with your name on it) are simply not seeking new business online. Their business is already massively established and it's all referral. Famous example is Foxconn (the manufacturer for Apple products). They just have a crappy plain website with no direct selling, not to mention 500,000+ reported employees.

    -True manufacturers have separate sales departments, 3 mainly and sometimes a 4th. (1)Major Sales deals with network connectors, or people/companies who have accounts with the following 3. (2)Chain Sales deals with corporate chain accounts like Walmart, Target, 7eleven, supermarkets, etc. (3)Regional Sales deals with other suppliers who want to source their products to other wholesalers/distributors...usually other Chinese shops who then sell to the public. (4)Direct Sales deals with small chain owners, individual companies, all the way to startup companies.

    -Minimum Order Quantity is an indicator of who you're actually dealing with. Generally speaking, if MOQ is 1pc, then you are definitely dealing with a middleman. Most times, a 5000pc MOQ still indicates middleman suppliers. It's not out of the ordinary for true supplier/manufacturers to have 100,000pc MOQ for new business. Only established accounts get leniency.

    -In baseball, there are a ton of players players and a small handful of owners. Likewise in China, there are a ton of wholesalers/micro-manufacturers and a small handful of large scale manufacturers.

    -How do you get the absolute best prices on everything with zero risk and 100% chance of glory? It's pretty much impossible. You gotta fail along the way. You gotta take risks. You gotta lose some then gain some. What doesn't kill you will make you better/smarter.

    -How do I know? Well, years. And when occasionally working with 7 figure orders, you meet the right people and get the right info.

    >

    I'm not sure how much it helps you to know this info, but I just felt like posting up. Hopefully, it was a decent read.

    Anyways, the 2nd part of this post (way shorter), is to say I'm open to JV/partnerships if there are any serious people out there.

    It could be...

    You helping me: Even though I have main manufacturer contacts, there are new markets and hot products coming out all the time, so if you work with any new products/manufacturers, I may be interested. If you travel to or live in China, we can have another discussion.

    Me helping you: All said, I can get anything at the lowest price market-wide. If you want a direct contact after seeing some price lists, I may be open to that. NDA will need to be signed and some things are off limits because some of my customers have exclusive rights on distributorship on certain products. I charge between $5000 to $50000+ for contacts depending on category and your order volume. In the end, I generally work it out so that the investment is easily made back on the first order.

    Another thing I do for some, if the charge is out of their budget, is avoid the NDA entirely and just send price lists. They are un-doctored, straight from the source...and I charge a % based on different metrics depending on where you're at with your business. You can PM me if you wanna look into that.

    Anyways, that's it for now. I'm happy to take questions and help a newbie, but I'm not trying to give a full course on the basics - I don't have time for that. So please school yourself on the very basics first. Google is your friend. Please don't ask me to explain what an RFP is :)

    -s
     
    • Thanks Thanks x 3
  2. theweg

    theweg Regular Member

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    Occupation:
    Trader/Wholesaler
    Can you get original Beats by dre?
     
  3. GiorgioB

    GiorgioB Supreme Member

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    I live in China, Shanghai. I hve set up a HK company. PM me if you want to cooperate, I'm always looking for new ventures.

    PS. Good post! About the fake "factory" suppliers who are middlemen.. loool i know what you mean exactly.
     
  4. sinergy

    sinergy Newbie

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    Presently, the only Beats you're going to get without being an authorized retailer are imitations.

    But, Beats is not extending with Monster, so when their contract expires by the end of 2012, they'll be moving on. Monster closely guarded it, which is why so many fakes came out. This kind of thing happens to heavily protected brands.

    HTC currently has majority stake in the company, so it's possible that they will start manufacturing themselves or outsource it. If they outsource, genuine Beats will likely be accessible. I'll have a clearer picture after Chinese New Year.
     
    • Thanks Thanks x 1
  5. terrycody

    terrycody Senior Member

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    Occupation:
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    hoho

    as a matter of fact, u know well about our country, nice post
     
  6. el_capitan

    el_capitan Junior Member

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    I'm a drop-shipper so if you're looking for someone to move your products, contact me.
     
  7. madgenius

    madgenius Newbie

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    Wow. Thank you VERY much for this informative post. I have been looking to start a dropshipping biz but I'm not sure where to start. For a noob like me, this is awesome info. If you have anything available for someone just starting out but has a desire to work hard in this area, please let me know.

    Thanks again for the great post. Looking forward to reading more on what you have to say on the subject.
     
  8. jokky1221

    jokky1221 Newbie

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    Thank you for that info sinergy. Really opened my eyes and saved me a lot of time. I have a question. How does a startup cut off middlemen and get the supplier with a dropship business? It's not possible is it? I've found several so-called suppliers but kinda knew they were middlemen because of the low MOQ or zero MOQ, but I dont think I have a choice either with zero customer-base. The low profit-margin would be better than taking a huge risk buying 10,000pcs with very little experience isn't it? What are the options of a startup with a low budget?
     
  9. Nordic

    Nordic Newbie

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    Sir, I can not send you PM because I don't have 15 posts yet. Could you please be kind and PM me your Skype or e-mail address. I would really like to get in contact with you.

    Thanks in advance!

    Best regards,
    Nordic
     
  10. who is

    who is Newbie

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    Hey Sinergy, sounds like a good idea, I am interested in your services. I already do some business in China, and have had mixed experiences. I have a few contacts there, but not with the connections you have. I'd be interested in chatting a bit more, but I cant PM you yet.
     
  11. who is

    who is Newbie

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    OP sent you a PM, hope to hear from you.
     
  12. who is

    who is Newbie

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    Anybody ever use this guy? Was he able to offer legitimate services?
     
  13. 22karthikreddy

    22karthikreddy Regular Member

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    OP, Can you give your skype to me. or please add me on your skype.