The Chinese wholesale market is an immense source of suppliers and factories ready to offer you a product of any kind, on any budget, and in any quantity. It supports thousands of businesses worldwide, greatly contributing to the growth of the international e-commerce market, estimated at $5.5 billion globally. Buying bulk from China has numerous advantages, but is ordering cheap goods from China still beneficial?
This article will explore the specifics of bulk buying from China, exposing potential risks that await those who search “buy things from China”. Be aware of the pitfalls and consider other more reliable and profitable options.
What Makes Buying Bulk from China So Appealing
Companies of different sizes, especially startups, favor ordering bulk from the China wholesale market. This is not surprising, as this world’s factory provides countless possibilities for businesses, from an extensive supplier base to an organized shipping process.
With the advantages listed below, the Chinese mass production marketplace has become a solid competitor to other markets.
Lower Production Costs
Have you ever wondered why products of the same quality, including shipment expenses, are cheaper in China? A significant price influencer is labor cost. Compared to Western employee compensation, the Asian region offers relatively lower labor costs. Another factor that allows businesses to affordably order products from China is cheaper raw materials — this country’s advanced manufacturing infrastructure allows them to deliver products quickly and cost-effectively. Thus, when buying in bulk, you can considerably save costs.
Vast Network of Suppliers
There is no chance you wouldn’t find a product on Chinese supplier websites. This is a huge hub where manufacturers offer clients an immense choice of goods. While selling products on a large scale, suppliers from China also aim to customize them according to your business needs. This feature makes cooperation with Eastern world sellers undebatably profitable. They are also open to negotiation, so you may end up with a better deal than you have aimed for.
Pro-Business Trade Rules
China’s wholesale market is very customer-oriented, creating a favorable backdrop for international cooperation. They have incorporated numerous policies encouraging buyers from around the globe to buy products from China. For instance, they have set cheap export tariffs, allowing companies to set competitive prices on local markets. They have also created free trade agreements (FTA) with multiple countries to simplify export procedures. The government initiates export tax rebates for some products, making prices even more appealing.
Cutting-Edge Technology
Even cheap products from China can stand the competition in quality matters with expensive analogs. This is because China invests in technological advancements. So large-scale goods production doesn’t compromise quality. Many suppliers from China are not only experts in promoting products but also in creating them. They acquire a deep expertise in the niche and can provide top-tier quality goods.
Easy Scalability
The number of products is never a challenge for the Chinese wholesale market. This is especially beneficial for companies that grow fast. Chinese suppliers can adjust to the rising demand quickly without making you wait long. This ability to expand rapidly is because Chinese manufacturers own extensive inventories and can involve more workforce in production within short terms.
Well-Organized Supply Chain Infrastructure
China’s wholesale market is prone to massive orders and deliveries “for yesterday”. Since exporting products occupies 18.7% of the country’s GDP, they have built a solid procurement network supported by properly organized logistics and shipment. Thus, when you buy products from China, you can rely on in-time delivery.
So, buying in bulk from China is a profitable option, considering the numerous advantages of such cooperation.
Also: 5 Steps to Follow When Importing & Exporting Merchandise
Risks of Buying Bulk from China
The “Made in China” label is usually associated with questionable quality. Indeed, this and many other factors form a skeptical side of China bulk buying. So, what is hidden behind ordering cheap products from a country that significantly contributes to the world’s economy? Let’s see below.
1. Deceptive Practices
If you Google the term “order stuff from China”, you will definitely come across case scenarios in which victims share their negative experiences of cooperating with that market. The situations differ, but there are some common examples.
The first one is placing an order and never receiving it. You might relate to the situation when teenagers order cheap goods from AliExpress. If they receive the order, they are lucky ones. Many sellers don’t send it, and you can’t file a case against them without official proof.
Another usual example of scamming people is sending the wrong order or a different order. You might receive something other than what was published on the website and fail to return it. There are also cases when customers receive a low-quality product analog.
To address this issue, you have two ways:
- Connect with the supplier and visit the factory.
- Source for reliable sellers via trusted companies.
In the first case, you will need to invest a lot of time and finances to make sure you order from a trustworthy vendor. In the second case, you can visit a reputable website and choose among the verified distributors and manufacturers.
2. Inconsistent Quality
Sometimes, buying in bulk from China is like purchasing a pig in a poke. Even though Chinese manufacturers use advanced technologies, there is no guarantee you will receive top-notch quality goods every time. One of the factors contributing to that drawback is the inability to visit the factory often and supervise the process when you buy in bulk from China.
The examples of inconsistent quality of ordering products wholesale from Chinese supplier websites are the following:
- Different product specifications. Not the entire batch of goods may meet the requirements.
- Material quality variations. Ordering clothes from China can be dangerous due to inconsistent material quality and color mismatches, as the same goods may arrive made of different materials.
- Poor packaging. When you order products from China, the journey from East to West is long. So, it is essential to properly pack products. However, the goods often get damaged throughout the journey, causing financial losses.
Thus, multiple quality-related questions are difficult to handle when you are on the other side of the screen when you buy products from China.
3. Language Barrier and Lack of Chinese Business Culture Knowledge
Chinese is not close to English, and not all suppliers speak English. And while we all have advanced translators, this doesn’t solve the problem of conducting clear communication. In particular, failing to reach a common ground may result in:
- Misunderstanding of product specifications.
- Inability to negotiate over prices.
- Lack of proper quality assurance.
- Difficulty in setting effective after-sale service.
- Dependence on Chinese-speaking middlemen.
China supports many traditions related to business. Two definitions, “guanxi” and “mianzi”, shape business culture.
- “Guanxi” relates to relationships. Chinese companies choose to work with firms that have a long and warm connection. This choice is not based on better financial turnaround, while in Western culture, revenue comes first when identifying the right partners.
- “Mianzi” is connected with reputation. This means that decent suppliers take care of their appearance on the market. So, when you decide to send an emotional email to the manufacturer, think twice, as Chinese people may get offended to seize cooperation because of that.
4. Intellectual Property Infringement
China is known not only for its inventions but also for its replications. You have seen those cheap Gucci bags manufactured in China and spread across the globe.
So when you come up with a revolutionary startup idea, sharing it for bulk ordering details or materials from the Chinese market might result in your intellectual property (IP) theft. After a product launch, you might come across similar cheap replicants.
Even if you become a victim of IP rights infringement, this is not enough to get compensation from Chinese suppliers. Local laws and trade policies require a solid legal advisor and additional costs to present the case.
5. Logistics Difficulties
Even though China has built a solid supply chain infrastructure, let’s not forget that the shipment route to the Western world is long. This poses multiple risks for a buyer. For instance:
- Long delivery during holidays or peak seasons. When selling seasonal products, every hour matters. Failing to provide customers with the product promptly results in lost sales.
- Custom inspection. A big part of the logistics process is delivering orders through customs. This requires proper documentation and labeling. But even small mistakes or incomplete information may delay the delivery of your order for weeks.
Also, shipments are not protected from emergencies for various reasons, including natural causes.
6. Currency Fluctuation
Another complexity of buying bulk from China is addressing the currency exchange question. As currency fluctuations happen every day, companies might miss the right moment and end up reducing profit margins.
To profitably buy products from China wholesale market, you need to create a hedging currency strategy. This adds another complexity to the process and requires a professional to tackle the issue.
The Benefits of Buying Wholesale from American Suppliers
Cheap stuff from China will never replace high-quality, regulations-compliant products from the American market. This is why buying products in bulk from local manufacturers is a win-win.
1. Excellent Quality Products
American suppliers are known for their strict adherence to product requirements. Even though this might incur additional costs, you will never question the quality of the goods. Local factories also adhere to safety rules, producing products with safety in mind.
Another part of the quality question is its confirmation by meeting regulatory standards. They are indicated in such regulations:
- Federal Communications Commission (FCC).
- Food and Drug Administration (FDA).
- Consumer Product Safety Commission (CPSC).
- National Highway Traffic Safety Administration (NHTSA) and others.
2. Fast Delivery
Buying in bulk from American sellers is easier in terms of logistics, shipment, and meeting custom standards. You can receive your order within days and win more sales during peak seasons.
A simplified shipment process also contributes to reduced shipment costs. So you can save a significant sum by ordering from local manufacturers.
3. Responsive Customer Support
Cooperating with American suppliers has numerous benefits when it comes to customer support and communication. Here they are:
- no language barrier;
- no time difference;
- quick reply and quick issue resolution;
- quick customer query processing.
A huge advantage in this aspect is the ability to meet in person and examine the product creation process independently.
4. Better Protection from Fraud
Even if you become a victim of fraud, you are more likely to get compensation in America than in China. This is because the American government has set strict consumer protection laws and high fines for breaking them.
Also, it is easier to prepare for raising a legal case in court due to full access to the needed regulations and communication in the same language.
To sum up, the exploration of the risks of China’s bulk buying leads us to conclude that ordering goods from China poses more uncertainties and threats than cooperating with American suppliers.
While the Chinese market offers cheap products, there is no guarantee they will be delivered quickly and of the highest quality. Also, you will never be 100% sure your deal is safe, as the language barrier and cultural differences greatly contribute to that.
So, if you are looking for a reliable solution for your business, the American market is waiting for you! It is time to entrust your product ordering to vetted manufacturers and suppliers from the Wholesale Central directory for B2B wholesale suppliers and goods.
Visit our website and find your ideal partner for free to benefit from cooperation and scale your business!
FAQ
It is difficult to supervise product manufacturing processes and shipment conditions being far away from China. However, cooperating with a local American wholesale market doesn’t have those implications, and you can always visit the supplier in person.
Cooperating with non-English-speaking suppliers can be challenging, as can the inability to negotiate, a lack of understanding of product requirements, and poor or unavailable customer support.
It is impossible to predict the exact delivery date from China. This makes inventory management more complex, resulting in delayed restocking, high inventory costs, uncertain lead times, and lack of flexibility.
Currency exchange rates tend to fluctuate every hour. Thus, you might plan to spend one amount and end up investing another amount. This influences profit margins and supply contract stability.