Comprehensive Playbook for Sourcing Suppliers (China and Beyond)
1. Supplier Search & Discovery
Online Marketplaces
Trade Shows
Canton Fair (China) – most comprehensive in the world, in-person relationship building
Industry-specific shows in your home country – often more curated, can spot trends and build trust
Sourcing Agents
Local agents can navigate culture, language, and business norms
Especially useful if you are sourcing from multiple factories for different product components
Always verify agent’s fee structure (flat fee is preferred over commission)
Wholesale Markets
Yiwu Trade Center – for commoditized and inexpensive goods
Ideal for variety but less for brand-building or proprietary products
Reverse Sourcing with Jungle Scout
Use Jungle Scout’s Supplier Database to track the exact factories top Amazon sellers use
Analyze competitors' ASINs and match to import records (via US trade data)
2. Supplier Evaluation Framework
3. Negotiation & Contracting
Initial Quotation Phase
Cast a wide net (contact 20–25 suppliers initially)
Shortlist 3–5 suppliers based on quality of communication, professionalism, and responsiveness
Pricing
Understand that price below a certain threshold will likely compromise quality
Use competitor quotes to negotiate better terms but avoid driving price unrealistically low
Build flexibility into future orders—negotiate price reductions tied to order volume increases
Payment Terms
Standard for new relationships: 30% upfront, 70% after pre-shipment inspection
Alternative for first orders: 50/50 split
After relationship matures: explore better credit terms (for example, partial payment on delivery)
Contracts
Always draft written purchase agreements
Key elements to include:
Product specifications (materials, dimensions, tolerances)
Packaging specifications
Quality requirements and test standards
Payment terms and currency
Delivery timeline and Incoterms (FOB preferred)
IP protection clauses
Dispute resolution mechanisms
Compensation clauses for defects or delays
Intellectual Property Protection
Register IP in China where appropriate
Monitor platforms (Alibaba, Made-in-China) for counterfeit listings
Build enforcement rights into contracts
Cultural Considerations
Guanxi (relationship-building) is critical in Chinese sourcing
Relationships improve pricing, payment terms, and problem resolution
Face-to-face meetings or video calls accelerate trust
4. Quality Control (QC) Best Practices
Inspection Agencies
SGS
Bureau Veritas
Asia Inspection
RV Trust
Costs: Typically $300–$500 for inspections; well worth the investment for large orders
5. Logistics & Shipping
Freight Forwarders
Always recommended for air cargo or sea freight
Help manage customs, optimize costs, and reduce delays
6. Red Flags to Watch For
Supplier is evasive about whether they are a factory or trading company
Pricing is far below or far above market norm
Communication is slow, incomplete, or evasive
Supplier insists on full upfront payment
Supplier pressures for quick decision or changes contact information frequently
Reluctance to provide samples or references
7. Sourcing Beyond China
Best Practices for Alternative Sourcing
Prioritize shifting price-sensitive and low-urgency products first
Always sample and inspect products from new countries
Use country export history to validate supplier quality
Factor in longer lead times and greater operational complexity when shifting supply chains
