why-buy-in-bulk-from-china

Do you keep thinking that is it worth it to buy in bulk from China?

Actually, China has gained attention due to its modernized methods of producing items that allow improved quality and lower cost of manufacturing. And, that is why it has become the mega business hub for the whole world, also known as the factory of the world.

The question that arises is what you know about this Asian country and how can you buy in bulk from China?

China owns many large e-commerce sites from where you can buy and sell products in the rest of the world. It is also home to the largest wholesale markets in the world along with thousands of factories spread all around the country.

In this guide, we will cover all the details related to buying in bulk from China. The guide also contains information diverted towards safety tips, advantages/disadvantages of buying in bulk from China.

Table of Content

Chapter 1: How China became the world’s biggest market to buy in bulk from?

Chapter 2: Why buy in bulk from China

Chapter 3: How to buy in bulk from China

Chapter 4: Disadvantages of buying in bulk from China

Chapter 5: Common mistakes when buying in bulk  from China

Chapter 6: Tips to avoid online scams before purchasing in bulk from China

Chapter 7: Best wholesale sites to buy in bulk from China

Chapter 8: FAQs about buying in bulk from China

Chapter 1: How China became the world’s biggest market to buy in bulk?

Whenever we listen to the word China, the question that comes into mind is “How it is changing the whole world”. Well, that is because of adopting modernized methods, leading towards amazing economic growth. China has now become a factory of the world.

how-china-became-biggest-market-to-buy-in-bulk-from

1. History of China’s economic development

China is one of the fastest-growing economies since 1980. After the Maoist period, China moved from a dominated socialist society to a culture of a mixed economy, leading towards an annual growth of 10% from 1978 to 2005.

Due to a number of reforms that include China’s financial, enterprise and governance system, China was able to co-up with the latest trends, allowing it to reach the top. This transformation was also possible due to the introduction of industrialization and urbanization among the country’s culture and economy.

history-of-china-economic-development

Since the foundation of the PRC in 1949, China has witnessed a violent economic process. The time of the great leap and cultural revolution affected the economy in the most negative way. But, after 1978, the country has seen a major shift in living standards and has witnessed social ability, allowing it to become the backbone of the world economy.

2. Causes of China’s Economic growth

China is holding the title of the world’s 2nd largest economy, and that is only because of several moves that the country has made. The integration of minimum capitalism in a command economy allowed explosive growth. But, how did it achieve that?

-Government Spending

The Chinese government spending enabled the country’s growth. The government owns important companies, for example, PetroChina, China National Offshore Oil Corporation (CNOOC), and Sinopec that dominate the industry. This allowed China to optimize the companies towards high-priority projects.

-Information sharing

In order to start a business in China, the country requires several things from investors and one of them is sharing the technology. Then, Chinese companies use this knowledge to create their own products.

-Optimizing yuan to the dollar value

China’s largest bank-The People’s Bank of China- controls yuan to dollar value in order to manage the prices of exports to the United States. By managing this, China takes the advantage of the difference.

3. China as world’s largest manufacturer

China has achieved the seat of the world’s largest manufacturer. According to the reports of the United Nations Statistics Division, China valued 28% manufacturing result in 2018.

china-as-world-llargest-manufacturer

That is ten percentage points more than the US which had the name of largest manufacturer until China took the title back in 2010.  In 2018, China’s manufacturing sector hit a figure of $4 billion and that was 30 percent of total economic output.

To secure the future of the Chinese economy, the leaders have taken steps to boom the domestic demand, allowing it to rely less on exports and expand the reach into a market-based economy.

To further growth, China has introduced the “Made in China 2025” plan that highlights the moves in technology, Big data, and clean cars. It has already become a leader in solar technology, cutting coal and steel production to some extent.

4. China’s major trading patterns

Trade is one of the important factors in China’s economic development. It has catered to gross output since 1950, for example, at time of 1953 to 1996, the country witnessed the GDP grew at 10.8 annually.

Also, during this era, the total value of China’s trade spiked at an annual rate of 11.8 %. Talking about the rate of exports, it was 12.3 % and imports were at 11.4%.

During the 1970 economic reform, China experienced a sharp rise in exports and imports. For example, in the time span of 1953 to 1977, the total figure of China trade increased at the rate of 7.9%.

Compared to this, in 1978-1996, the total value of the foreign trade reached 15.8% per year. This shows that after 1978, the annual growth rate was remarkable. And this is all because of improved policies and rules.

Chapter 2: Why buy in bulk from China

China has become a pioneer in manufacturing and that is all because of the latest reforms. This has led millions of businesses to set up a shop in China. Reforms are not the only thing here and that is because there are a number of other reasons related to why you should buy in bulk from China.

1. Reduced manufacturing costs when buying in bulk from China

One of the most important reasons is the reduced manufacturing costs. Chinese manufacturers are more inclined towards making non-branded items that decrease the cost of the product.

reduced-manufacturing-cost-when-buy-in-bulk-from-china

Secondly, when you buy in bulk from China, the cost automatically reduces. Another important thing about reduced costs is lower wages in China. The demand of workers exceeds the demand of production and that leads towards lower wages and lower wages mean lower manufacturing cost.

2. Large variety of Products

China is home to thousands of factories and that means it is dealing in millions of items. People can buy items related to apparel, cosmetics, manufacturing tools, automobile-related items, pharmaceutical-related products, and many more.

the amazing part is they can buy in bulk from China. There is no limit to that. In simple words, you can start any type of online and offlines business using this range of products offered by China.

large-variety-of-products-to-buy-in-bulk-from-china

3. High-profit margin when buying in bulk from China

As mentioned, a lot of people prefer to buy in bulk from China and that is because of reduced manufacturing cost. Now, reduced manufacturing costs allow business owners to get a high-profit margin.

For example, a frisbee manufactured in China can cost around $1.4 per unit and you can sell that same frisbee on Amazon at a cost of $10-$12 per unit.

high-profit-margin

4. Incredible Efficiency

Chinese are a hard-working nation and that is a huge advantage to other countries. You can get items in bulk at a reduced time and the best thing is quality won’t be compromised.

That is also because a lot of manufacturing industries in China have installed state-of-the-art machines that can make items in a matter of seconds.

5. Worldwide shipping

Another advantage of buying in bulk from China is world-wide shipping. China has developed relations with countries that enable it to ship items without any restrictions.

worldwide-shipping

the country is backing up e-commerce sites like Alibaba. You can place the order from anywhere in the world and the Chinese manufacturer will ship the product to your warehouse.

6. Improved quality

Chinese manufacturers have realized the quality is more important than quantity. To achieve that, product makers are trying their best to provide you with a high-quality product. And that is true, you can get high-quality jeans/shirts without paying any hefty price. And same is the case with other items.

7. Customize your products

Chinese manufacturers enable you to buy in bulk and get each product customized to your requirements. For example, you can guide the makers to change color, size, and shape.

if you are looking to launch the product under a private label brand, you can tell the manufacturers to apply your branding and logo on the item.

Chapter 3: How to buy in bulk from China

how-to-buy-in-bulk-from-china

Now that you have an idea about why buy in bulk from China, let’s move towards how to buy in bulk from China. Here are some of the points to look for when doing so.

1. Research the market before buying in bulk from China

The first and foremost thing to do is doing market research. Whenever you get into an online business, you have to search for what is lacking in the market. When you have found that, provide an answer.

Look for whether the answer will help your audience or not. If you are trying to source a product the same as your competitors, look for the quality your rivals are offering.

research-the-market-before-buying-in-bulk-from-china

Go through their product listings and check the price. Then, calculate if you can offer the same product at a lower price while keeping the same quality.

2. Contact Chinese manufacturers

When you have decided the niche you are going to enter, it is time to look for manufacturers in china. The best way to do that is to visit sites like Alibaba, 1688, or Taobao.

Type the name of the product you are looking for and take a look at the manufacturers offering that product. When you have found your potential manufacturer, contact them and acquire the information.

3. Negotiate the price

After contacting the manufacturer, negotiate the price. This here is the crucial step when you buy in bulk from China. When negotiating, keep these steps in mind. They will help you in getting the best quote.

-Communicate with the manufacturer clearly: Talk to the manufacturer clearly and tell them what kind of product are you looking for. So that they can give you the best quote

-Sell on the volume: Most of the Chinese suppliers are looking for selling their products as much as they can. You can help them getting buying in bulk rather than in small quantities. This can lead towards the lower price of the product

-Negotiate outside the price: If your supplier is not lowering the price, you can always negotiate on other factors that can affect your business. For example, you can talk about the deposit or how long to pay for the purchased order.

-Offer attractive deposits: Giving large deposits can also help in lowering the price.

-Be an ideal customer: If you are a regular customer to the manufacturer and are paying on time. Plus, if your communication methods are open and you are requesting endless paid samples, there are chances that you can get a lower price quote in the future.

4. Order samples before buying in bulk from China

When you have negotiated the price per unit, you can order the samples to check the quality your manufacturer is offering.

Plus, it will also give you an idea about how much time your manufacturer is taking to develop the product. At the arrival of samples, look through the customized features, logos, branding, and color scheme.

5. After Sample approval, place the bulk order

When you are satisfied with the sample, you can now order the product in bulk. You can pay the payment according to the decided terms.

6. Perform multi-stage inspection

It is important to inspect each and every item. Now, there are two ways you can do that. The first one is to check the items by yourself. The second way is to hire an inspection agency like Ejet Sourcing (www.ejet.com).

perform-multi-stage-inspection

The second method is efficient when the items are in bulk. When the items are in small quantity, inspection agencies can put an effect on the final price.

7. Arrange shipment to your destination

After you have gone through the inspection stage and are satisfied with the items, move towards the shipment stage. There are two methods of shipping the item to your warehouse.

-Air Freight and Air Express: Air freight is the fastest way when talking about shipping time. But, the issue with that is it can cost you more than the other method.

-Sea Freight: Sea freight is the economical way and that is because it is relatively cheap than air freight. But, the drawback of this one is it takes a lot of time to deliver the items to the warehouse.

Chapter 4: Disadvantages of buying in bulk from China

There are multiple advantages when talking about the topic buy in bulk from China. But, with the advantages, disadvantages also come as a sidekick.

These are some of the disadvantages that you can face when buying in bulk from China. The reason we want to explain the disadvantages is so that you can prepare solutions to them and turn them into advantages.

1. Language barrier

Most of the manufacturers available in China are based as small-scale businesses. It means they have no prior knowledge of speaking English and other languages.

language-barrier

This is a huge problem for businesses that are dealing with Chinese manufacturers. Yes, large-scale businesses have English-speaking entities but that is rare.

People tend to work with in-house manufacturers because they are relatively cheap compared to multinational manufacturers. And with a small scale, the language barrier comes as a plus.

2. Cultural barrier

Cultural barrier is embedded deep into the Chinese and that can lead towards poor understanding. There are three types of cultural barriers that you can expect when dealing with Chinese manufacturers.

-The culture of “Yes”

The most common question that is asked by a manufacturer is “Can you meet the requirements”, and when talking about Chinese ones, the answer will always be yes.

The possible reason suppliers agreed to the requirement is to win your business. And, another possible reason for this is Chinese manufacturers tend to favor a long-lasting relationship with their customers and there are chances they withhold any important information to prevent the conflict. So, the answer will always be a yes.

-Cultural of “saving face”

In the west, people always get a response to questions like “If you any queries, you can ping me”. But, with the Chinese suppliers, the answer will always be “Thank you, no questions”.

For a business owner, this response means that the supplier has understood all the details. But, when the product arrives, you could find serious quality issues. And those could’ve been prevented if the supplier had asked the questions. So, where is the issue?

This practice can be traced to the saving face or in other words-self-respect. People think to save their face by not asking questions and that can impact the business.

-Wining and Dining Culture

If you have visited your supplier in China, the chances are they have invited you to a restaurant to talk about the business. Now, this is another way of saving face (Self-respect).

Yes, it is a good practice to invite the business owner to dinner as it can improve the relationship between both parties. But, it can also inhibit quality control as suppliers will present you with meals, gifts, and even bribes.

3. Shipping delays – During Covid19 Pandemic

Another drawback you face when you buy in bulk from China is shipping delays. The main reason for that is COVID-19. As we all know that COVID has affected businesses all over the world.

shipping-delays

The same is the case with China. To prevent the spread of the disease, China has imposed rules on shipping that can take long days to get cleared off. This leads to a delay in shipping time.

4. Poor quality of work – If no inspection is performed

As mentioned, there are plenty of Chinese manufacturers that are operating from their own houses. The issue with that is small-scale manufacturers don’t have the equipment to develop a high-quality product. And, if you are in contact with such supplier, there are chances that you will get a poor quality. That can affect your name in the market.

5. Higher MOQ requirement (Minimum order quantity)

Similarly, the issue with large-scale manufacturers is that they have higher minimum order quantity (MOQ).

Yes, their quality of work is up to the standards, but you have to manage the MOQ limit. This can lead to higher prices if you are starting a new business.

Chapter 5: Common mistakes when buying in bulk  from China

common-mistakes-when-buying-from-china

This section here solely diverts to the mistakes that are made by importers when they buy in bulk from China. This is for the ones who are new to the business. But, it also highlights experienced importers and that is because even they can fall for these mistakes.

1. Mistakes when choosing products

-Always going for timing-based products

The mistakes when choosing products that are made by new ones are going for an item that is based on time. For example, back in the day, fidget spinners were very popular. And a lot of people made money from these.

But, as time passed by, the importance of fidget spinner diminished. When nurturing a long-term business, it is important to select a product that can make you money in the longer run.

-Thinking highly consumed products can offer huge profits

Yes, when talking about buying in bulk from China, market demand should be considered. But, highly consumed products still can threaten the business. For example, A4 paper is one of the items that is always running.

But, you think it is running. It seems like it lies under the highly consumed product category. But, it is not and that is because nowadays people are moving towards eco-friendly options.

-Choosing large-sized products

Large-size products like photo frames or dressers can make you profit. But, the issue with these is you have to pay a huge sum of shipping costs and that can lower your profit margin.

2. Mistakes when selecting suppliers to buy bulk from China

mistakes-when-selecting-suppliers-to-buy-in-bulk-from-china

-Thinking buying directly from factories is a better option

People who buy from China think that factories will offer them better quotes than the trading companies. Yes, they are right. But, the issue with that is they limit themselves to factories while ignoring the business model.

-Choosing a supplier with the lowest rate

Cheaper prices excite the importers when they are buying in bulk from China. But, the lowest price sometimes means more problems. Some suppliers lure you in by giving you the lowest rate. But, as soon as you make the deposit, they increase the price by using various excuses.

And the bad part is you cannot get the deposit back and if you don’t pay the additional price, they adjust the quality accordingly to the deposited price and that can lead to poor quality.

3. Mistakes in paying suppliers once order bulk from China

-When importers don’t check holidays in China

In general terms, the transfer of payment from the US to China takes one day. Payments from Europe are relatively slower and can take up to three days. And the production is always arranged when the deposit is paid.

Now, new importers keep this schedule in mind, but they don’t consider holidays in China, for example, Spring Festival, Qingming Festival, China Labor Day etc.

The issue with this is the time for a Chinese supplier to receive the payment can extend by 3 days (if you are paying from the US). And this means production time will be delayed.

holidays-in-china

I-Not familiar with handling fees

Another mistake importers make is not getting the information about the handling fee. For example, if you transfer $100-$200, it can deduct about $30 as a bank fee. For a new business, it is important to go through the handling fee. Take a look at the table given below.

handling-fees

4. Mistakes when shipping products from China

-Always choosing sea shipment

Yes, sea shipments are relatively cheap when you are shipping products from China. Sea carriers charge you on the basis of per container rates. Yes, weight can also factor in when calculating the charge, but the charge they make is based more on the size of the container.

If you are shipping less than the container load, the price is determined by cubic meter. With larger shipments, it is cheaper to ship by sea. But, with small shipments, the margin between the prices gets lower. And sometimes this makes air freight less expensive than the sea one.

-Not catering to shipping rush

If your product’s production finished during the Chinese year celebration and there is no space available in the loading port, then you might have not looked at the events when the shipping rush is at its peak.

That mistake is often made by new importers and sometimes, the experienced ones.

Keep in mind that during Christmas and Chinese New year, importers try to stock up as much as they can. That leads towards lowering space on loading ports and can also increase the shipping rates.

Chapter 6: Tips to avoid online scams before purchasing in bulk from China

tips-to-avoid-online-scams-while-buying-in-bulk-from-china

When you starting a new online business, the common thing that you can face is getting scammed by suppliers. To prevent that from happening, read these tips that are mentioned below.

1. Choose reliable websites and suppliers

There is no point in selecting a supplier or Chinese website if you have not gone through its past deals and reviews. Actually, reviews and past deals can help in deciding whether the website/supplier is legit or not.

For example, if you are using a website for sourcing your products, go through its review section. Now there are two things here. If there are no reviews, that website is a total red flag. The second thing is if the website contains 5-star reviews, the chances are they are fake. Because not every importer leaves a full 5-star review.

About the supplier, check their communicating style. Go through the product list and cross-reference that list with the items that you are going to the source. It will give you an idea of whether the supplier is a scam or not.

2. Buy products after complete research

Okay, so now that you have decided what you are going to the source. The question is ” Are you sure that you know how the product works”. For example, let’s say you are importing a board game like monopoly.

Do you have an idea about how monopoly is played or how many players can play it? The thing is when you source your product from China; first, you have to make sure that you know how your product works and what the manufacturing process is.

If not, the supplier can scam you by not giving all items with the product. For instance, monopoly contains cards that help in playing the game. If you know about that, you can check whether the supplier has sent the cards or not. So, the bottom line is to buy a product after you have complete information and research.

3. Protect your personal details

Making a flexible relationship with your supplier is essential but that does not mean you should give personal information to the supplier. Yes, details like bank account number, name, and phone number are good enough.

4. Pay with a reliable payment tool

There are many ways by which you can pay your supplier. This is divided into main parts- Suppliers and websites. Let’s talk about paying the supplier first.

-Suppliers

If you are dealing with a trusted supplier, there are multiple ways by which you can pay him/her.

-Bank transfer (Costly option)

The first method is to use the bank transfer method. The issue with this one is it can charge you a fee of 30 dollars if you are transferring $100. This is for reference since this rate can change.

-Paypal (Secure option)

Paypal is widely accepted in China and the amazing part is you can transfer the money without mentioning your personal details. Paypal will charge its fee of 4%-5% when you pay the supplier.

-Websites

If you are buying the products from famous websites like Alibaba, then the first advantage of that is you won’t be getting scammed. That is because Alibaba has its own payment system called Alipay.

-Alipay (Escrow) (Secure option)

Alibaba’s escrow is diverted towards buyers’ satisfaction. The advantage of this payment system is it keeps payment in escrow until the delivery of the goods. When you get the items and are satisfied, you can release the payment.

-Alibaba online transfer (Efficient option for Europeans)

If you are an entity from European countries, then this is the method for you. This quick and simple method enables buyers to deal in different currencies. The method works if you are from

  • UK
  • Poland
  • Ireland

  • Belgium
  • Spain
  • Germany

Chapter 7: Best wholesale sites to buy in bulk from China

wholesale-sites-to-buy-in-bulk-from-china

Let’s talk about the best sites where you can buy in bulk from China. These sites have amazing perks and some of them offer discounts from time to time.

1. Alibaba wholesale website to buy in bulk from

Alibaba is a world-renowned B2B website that is operating from Hangzhou. It is popular for its wide set of suppliers and producers. Another reason this site is known, is for its secure payment platforms and trade assurance. The site deals in a variety of products ranging from apparel, electronics, and automobile equipment. If you’re looking for buy in bulk items, then it should be on your list.

2. Aliexpress wholesale website to buy in bulk from

Aliexpress is a branch of Alibaba but it deals in B2C platforms. It is among the best sites, that offer to source and drop shipping items. Here at Aliexpress, you can get any type of item. But, the drawback is suppliers here don’t offer items in a large amount.

3. DHgate wholesale website to buy in bulk from

DHgate is another sourcing website that offers products in bulk. From this site, you will find quality as well as quantity. It is popular for lower minimum order quantity. That makes it perfect for new sellers when buying in bulk from China.

4. Global Sources wholesale website to buy in bulk from

Globalresources.com is another B2B platform that is focused on innovative manufacturers. The site has catered to the needs of millions of international customers, giving them the option to deal transparently with the suppliers. The site is known for holding trade shows that allow international businesses to enter the Chinese market.

5. GearBest wholesale website to buy in bulk from

GearBest is especially for people who are trying to source electronics. The site specializes in products that are related to the latest gadgets and electronics. And they offer amazing customer service, along with an unbeatable shopping experience.

6. Taobao wholesale website to buy in bulk from

Taobao is another website that is owned by Alibaba. The site is the eighth most visited website worldwide. And that is because of the shopping experience it has to offer. The site supports features like international payment and to get the satisfaction of the buyers, it also offers buyer’s protection services.

7. Tmall wholesale website to buy in bulk from

If anyone is looking for getting their hands on branded products, then Tmall is the best option for them. Their inventory is packed with the latest and trendiest items that will help them in getting and selling brand items.

8. 1688.com wholesale website to buy in bulk from

1688.com is a sister website of Alibaba that also deals in B2B platforms. The difference between the giant and 1688.com is that Alibaba is diverted towards the international market. While 1688.com overs the domestic market. If any buyer is looking for domestic products, 1688.com is the solution for them.

Chapter 8: FAQs about buying in bulk from China

frequently-asked-questions-about-buying-in-bulk-from-china

Anyone who is trying to buy in bulk from China will get through a lot of processes. And we are sure that they have a lot of questions in mind. To help you in getting through some common questions, we have compiled FAQ section.

1. How do you buy products from China?

When you buy in bulk from China, the first thing you need to do is market research.

Then after you have done that, it is time to search for a supplier in China. You can either contact sourcing agencies like Ejet.com or you can use websites like Alibaba or 1688.

When contacted, negotiate the price and order the samples. After inspecting the samples, order the quantity in bulk and arrange the shipping of those items.

2. What do I need to know before importing from China?

Importing from China can be a difficult experience for a new person. That is because there are a lot of documents, procedures, and restrictions. Some of the things that you need to know are

Holidays: Make sure that you are no upcoming holidays in China because, during this time, there is an increased payment processing time and shipment rush which leads to delays.

Documents: Make sure that you have all the important documents that will help you in clearing the goods from the port. Some of the documents include Bill of Lading, Air Waybill, Packing List, Pro forma invoice, Certificate of Origin, CITES Permit, and Import /Export Declaration.

3. Are there many scams when importing from China?

When buying in bulk from China, there are chances that you get scammed when buying from china. For example, the supplier can increase the price per unit when you deposit the payment and if you don’t pay that price, they will adjust the quality according to the deposited price.

Another problem is when paying the supplier. Sometimes suppliers can run away when they get the deposit, leaving you hanging in the blues.

4. Which is the best website for buying from China?

There are plenty of best websites that enable buy in bulk from China. Some of them are

  • Alibaba (known for its secure platform)
  • 1688 (Perfect if you are looking for lower MOQs)
  • Made in China
  • Tmall (For businesses who are dealing in named brands)

 

Conclusion

Nowadays, businesses are shifting towards modernized solutions that make the conduction easy. The same is the case with online selling businesses. People buy in bulk from China and sell items on sites like Amazon.

This guide covers all the parameters related to buy in bulk from China, for example, advantages, risks, and tips. These sections will help you in setting up an online shop anywhere in the world.

For our newbies, starting this business can make you pull your hairs. But, the bottom line is not to lose hope. Maybe you have to keep the profit margin lower at the start.

There are chances that you will get scammed by suppliers. The key to success is to keep learning from these mistakes whatsoever, follow all the guidelines mentioned here, and keep yourself persistent in reaching the goal.