Whether you are a Dropshipper, Amazon FBA, or product sourcing, there are some fundamental things you should consider before you make your first purchase. These tips and tricks will ensure you are not overpaying for product, will decrease your potential risk, and keep you legally compliant!
Number 1: Legitimacy, Trust, and Quality of Dropshippers (Aliexpress & Alibaba)
Conduct a quick Google search to see if your supplier has visited or been to any trade showing globally. In China there are many middle-men advertising as business owners who take your orders and then go to large manufactures to produce. This means you are paying the middle-man premium. To ensure you are dealing with a reputable business, check their reviews and catalogs. Something as simple as Googling their business address to see if it is an industrial building or home address can save you thousands.
If your manufacturers are on Alibaba you can view their business profile to see which trade shows they have attended. Click on additional information and it will show you their business profile. Some Reputable Trade Shows and Councils to look for are:
Hong Kong Trade Development Council
Spring Canton Fair
HKTDC Hong Kong Gifts Fair
By finding manufacturers who have been to trade shows, it indicates they must be producing quality products. It would be safe to assume that if their products were poorly made, they could not afford to be at a trade show. The subtle fact that they can afford a trade show indicates their company is financially stable.
Why this is important?
Finding a reputable manufactures important for a few reasons:
If you find a hot selling product that only has one manufacturer and for some reason they go out of business, you will no longer be able to sell that product.
Increased competition sometimes pushes manufactures out of business.
Unfortunately, if you're using Ali Express, a lot of the time the original manufacturers are not listed. The items will most likely be for sale by a wholesaler, whom generally are always 3rd party. Understand that there is risk when dealing with these vendors.
Number 2: Legal Issues
Try not to use the stock images from the manufacturer. Many times these photos are taken from professional models. The issue here is, taking someone’s pictures without consent is a Copywriting issue with real legal ramifications. Chinese suppliers are able to get away with it because of the lack of international enforcement. However, if you are a dropshipper in Canada, Europe, or USA, you are not protected the same way. Similarly, if you are selling on Amazon you risk being blacklisted on Amazon from Copy Write Infringement Claims.
Also, the pictures you use should be reflective of your target demographic. Often times the stock images depict Asian models. If your stock pictures don’t show diversity it often times can have a negative effect on your overall brand appearance and sales.
Bottom Line: Order the product yourself and take your own pictures with it!
Number 3: Manufacturers, Trade Companies, & Wholesalers
Like mentioned earlier, there are many middle-men in China who pretend to be large businesses in order to get contracts.
When you're working with Chinese suppliers, you're going to run into these 3 types. Check to see if you are working with a Wholesalers, Manufacturer, or a Trading Company. Now this may sound redundant but it is in fact very important!
A manufacturer is exactly what it sounds like. They are the company that originally produces the items or products in their factory. When working with them it usually means that you are getting the lowest price.
A Trade Company is basically a middle-man, who is working as an agent between you and a manufacturer. As a result, you will always get a higher price then the manufacturer would give you. Sometimes trade companies are better to work with because they offer better communication then the manufacturer (English to Chinese).
A Wholesaler is another form of a middle-man. What they do is; they will purchase items in bulk and then they sell it on platforms like AliExpress. Wholesalers sometimes offer you custom branding or packages as a benefit to try and move their inventory.
Alibaba has all three types of businesses, Manufacturers, Wholesalers and/or Trade Companies. So make sure you shop around to find the best prices and best quality products. It’s important to remember that, for every major type of products there are generally only a few actual manufacturers
Number 4: Never Assume Anything Drop Shipping
The number one perk of working with China is there very low prices. One of the largest misconceptions with China is they produce bad quality products. This is not true…. I have worked with many manufacturers and middle men from China and India. The truth is, you often get what you pay for! This is the case when doing business anywhere in the world!
When communicating with anyone from overseas, it is important to remember there is an implied and explicit form of communication. When dealing with anyone from the west, we generally implicitly understand the level of quality we expect.
Overseas they will do Explicitly what you say and nothing else!
A client of mine was sources IPhone cases to give away as promotional gear. When looking for a vendor they selected a generic IPhone case manufacturer that could provide custom branding.
In an attempt to streamline the process and show China exactly what they wanted, my client sent the manufacturer a picture with their logo on the exact iPhone case they were interested in. Seem like great communication right!
Well… in the email my client said: "make sure you put the logo centered on the case."
The Manufacturer made the cases and sent them to my client….
When my client opened the box, they saw that the logos on the cases were great! But guess what? Written in generic Font right above the logo was. “Logo Centered”. They did exactly what my client asked for…..
Bottom Line: ASK EXPLICIT QUESTION AND GET SAMPLES/PROOFS
Number 5: Order The Product Yourself
This one is very straightforward but very important. Once you have found a reputable supplier on Alibaba or Aliexpress. Your first order should always be directly to you. You should never order product to a customer’s house or Amazon FBA. This first step might be time consuming but it may save you thousands.
Check out our article on: Should you ship from China to Amazon FBA?
For more information.
Top Reasons You should order your product first!
Assess Packaging quality (Box, shipping labels (To & From))
See if it gets through local customs without taxes or tariffs
Generate your own product images
Streamline process (Ensure China did things are you asked)
5 Mistakes You Will Never Make Sourcing or Drop Shipping!
Hopefully by this point you have picked up some information you otherwise wouldn’t have known. If you believe this provided you any value, we ask that you please share it!
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