Hello,

I am in the beginning efforts of buying and selling children's products online. I am doing my research and trying to decide the most efficient and profitable route. Obviously buying direct from manufacturers in China is profitable. How do I find these manufacturers?

That is my biggest question, how do I find the factories and begin to buy from them? Is a sourcing agent necessary? What kind of fees do they charge?

Any advice would be very helpful!

Thank you!

Kathleen

Hi KathleenK,

You will receive a multitude of offers from Chinese businesses offering what you want, and also from sourcing agents offering to locate the products for you.

The fact is that you cannot do better than buying direct using your own sourcing and handling the importing process yourself. Sound complicated? Sourcing agents and wholesalers will tell you that it is, but I have taught a large number of people how to do it safely and easily.

If this is your first venture into buying overseas you will encounter many traps for the unwary. Multitudes of companies listed on free B2B sourcing portals claim to be manufacturers but they are not. Even some very big businesses give that false impression.

The problem is that if you want maximum profits you need to deal direct with the real manufacturer. Wholesalers and agents add their margin to the factory prices and that cuts into your profits.

Chinese business culture is very different to Western ideas. I have visited China countless times since 1978 and it took me a long time to understand some of the important differences. One simple example is the word "yes". Chinese people are extremely polite and do not like to say no. As a result, "yes" can have different meanings such as maybe, hope so, will try, possibly, or yes.

I have enjoyed excellent relationships with business people in China and have never once had a bad experience. Partly this may be due to my frequent face to face contact.

Finally, I must warn you of the dangers of buying any big brand goods from China, including toys. You will find them on offer at incredibly low prices on some B2B portals. Until my retirement after 22 years of importing I dealt for a long time with a company that was licensed by Disney to produce certain items. The problem with such licenses is that they apply to sales to licensed distributors only. Such distributor licenses are extremely difficult and costly to obtain regardless of the brand.

Importing of big brand items is fraught with risk, even if you buy only 1 item. Results range from confiscation and destruction through to prosecution. Never rely on licenses and other certificates of authenticity unless they come to you direct from the brand owner.

Hello Kathleen,

China's biggest toys production base is Chenghai.

Although this thread is a little old now, there are some points worth mentioning here.

KathleenK, the best method for you to buy products from China is the method that is most suitable to you. That may be looking for your suppliers directly or it may be using someone to help you. A lot of it comes back to your confidence in ability to deal with overseas suppliers. There is no "one size fits all" answer as each supplier/transaction you do will be different.

Firstly, the thing that may stop you before you even get to the stage of buying these items is that you CANNOT buy branded toys directly from the factories in China. Any factory making branded toys is doing so on the basis they have supply agreements with the brand owners. They cannot just sell these items to anyone that comes calling. Not legally anyway.

To answer your other question, no, a sourcing agent is not necessary, but it is an option. They will normally charge you a percentage of the order value whether based on overall order value or on a per piece basis.

I am an agent myself and even I don't think it is suitable for all buyers to use an agent, but some of the comments mentioned above are very misleading. You have to note that comments above stated as "facts" that you are better off doing the process yourself, are presented by someone trying to flog you a book. They claim to have the best methods, but there is no overall "best "method, only the method that is best for you.

They say that agents will make the process sound all complicated, and then they go on to tell you there are many pitfalls. In reality the process is as complicated as you want to make it. With quite a lot of research you can handle it all yourself or at least go a good way to knowing how it all works without needing to use an agent or even buy a book. Pretty much everything you need to know is available on the internet for free if you take the time to do some research.

And to put to bed the myth that using an agent automatically add to costs, you should research a company called Li & Fung. They are an extremely large trading/sourcing company. They supply toys and various other products to companies such as Walmart, Target etc, to the tune of billions of USD per year. I can promise you that if there was no benefit to Walmart for this service, then given their in house sourcing, they would be doing it all on their own.

So my advice to you and anyone looking to buy from China is to do plenty of research on the subject, then make a decision based on how comfortable you feel after doing that research.

Quote:

Originally Posted by Dipper

Although this thread is a little old now, there are some points worth mentioning here.

KathleenK, the best method for you to buy products from China is the method that is most suitable to you. That may be looking for your suppliers directly or it may be using someone to help you. A lot of it comes back to your confidence in ability to deal with overseas suppliers. There is no "one size fits all" answer as each supplier/transaction you do will be different.

Firstly, the thing that may stop you before you even get to the stage of buying these items is that you CANNOT buy branded toys directly from the factories in China. Any factory making branded toys is doing so on the basis they have supply agreements with the brand owners. They cannot just sell these items to anyone that comes calling. Not legally anyway.

To answer your other question, no, a sourcing agent is not necessary, but it is an option. They will normally charge you a percentage of the order value whether based on overall order value or on a per piece basis.

1. I am an agent myself and even I don't think it is suitable for all buyers to use an agent, but 2. some of the comments mentioned above are very misleading. 3. You have to note that comments above stated as "facts" that you are better off doing the process yourself, are presented by someone trying to flog you a book. They claim to have the best methods, but there is no overall "best "method, only the method that is best for you.

4.They say that agents will make the process sound all complicated, and then they go on to tell you there are many pitfalls. In reality the process is as complicated as you want to make it. With quite a lot of research you can handle it all yourself or at least go a good way to knowing how it all works without needing to use an agent or even buy a book. 5.Pretty much everything you need to know is available on the internet for free if you take the time to do some research.

6. And to put to bed the myth that using an agent automatically add to costs, you should research a company called Li & Fung. They are an extremely large trading/sourcing company. They supply toys and various other products to companies such as Walmart, Target etc, to the tune of billions of USD per year. I can promise you that if there was no benefit to Walmart for this service, then given their in house sourcing, they would be doing it all on their own.

So my advice to you and anyone looking to buy from China is to do plenty of research on the subject, then make a decision based on how comfortable you feel after doing that research.

Hi KathleenK,

In order to help you sort out what to do, I must correct a few things posted by Dipper. I have numbered his comments in the quote above.

1. Dipper seems to take offence at any comment I make that suggests that people might not need the services of a buying agent, but in a previous thread responding to one of Dipper’s posts I stated: “I have no doubt that Dipper's company provides a useful service for those who cannot or do not wish to do their own research and personally visit China.” It is not a lengthy post, so I have appended the full post below.

2. He has made a sweeping statement that “some of the comments mentioned above are very misleading.” But I assure you I do not mislead anyone. I now have people in 9 countries using my book as a guide for their new importing businesses, and if you care to look at my website you will see some of the extremely complimentary comments I have received. I am also the third ranking contributor to this forum.

3. You should also note that some of the comments presented by many other posters including Dipper, need to be read in the context that they too are trying to sell their services.

4. Maybe Dipper makes it sound easy, but most try to sell their services by giving dire warnings about how difficult it can be if you try to do it without them. Yes there are pitfalls, but I am referring to the complexities that are frequently referred to on this and other forums regarding sourcing, shipping problems, duty rates, arranging Customs clearance etc. I simplify those complexities.

5. If anyone chooses to learn via internet searching the information that I concisely pass on in my book resulting from a lifetime of experience then I say “Good Luck.”

6. Large companies are renowned for outsourcing for the simple reason that they save substantial sums in administration and other costs. It does not necessarily mean they are able to buy at lower prices nor does it in any way imply that a small business person will gain the same benefits.

Here is the full post I briefly quoted above:

“Thanks Dipper
I have no doubt that Dipper's company provides a useful service for those who cannot or do not wish to do their own research and personally visit China.

I appreciate Dipper's comments, and without attaching a copy of my entire book I cannot answer them in detail, but here are some quick comments and I am sorry if they sound a bit like an advertisement.

Among other things, my book shows how to ensure that you really do get the best price, but more importantly how to ensure you get the quality standards, reliable service and response to problems that a good customer should expect. I describe how I have visited factories that produce excellent quality and in the same factory they produce low grade products made down to a price.

It also shows how to source items outside the B2B websites, some of which are of dubious value. In addition I show how to source products in various other countries.

I do say also that there may be times when using a local agent is desirable and I explain why.

Finally I also recommend using and paying for the services of people with certain knowledge that could take months or even years to acquire personally. For me that has not included sourcing agents because I have always enjoyed traveling and learning local customs, both business and social.”

Hi KathleenK,

On a further note, beware of directories that advertise big brand children's toys from China. Don't be fooled.

Those directories claim to offer escrow payment security to help guarantee that you will receive the goods you pay for, but if you buy fake branded toys you will not be covered against counterfeits.

They will also likely be confiscated by Customs and destroyed. You may also be subject to prosecution.