This text is intended for those who want to learn more about buying goods from China.
Depending on your needs, we can divide the purchase into cheap, cheaper and the cheapest, i.e. the most profitable.
The price of a product ordered from abroad until it enters the country is formed by the price of making the product itself and the costs of transportation.
Costs after entering the country are fixed (or at least should be) and we will not consider them.
Buy cheap
Many of you are probably familiar with online platforms such as Aliexpress, Temu, Shein, DHgate, Gearbest, and numerous other Chinese e-commerce sites..
If you are an individual and ordering goods for your personal needs, this is the cheapest purchase for you.
Due to low or free shipping, this is the best option for you since no one else can provide you with such low shipping costs.
There is no agent in China who can do this.
The pricing for shipping small packages is complex and often influenced by the destination country's regulations.
How and why the shipping costs are negligibly small, we tried to explain on our blog in the text Free delivery of products from China
Purchasing items individually typically results in higher prices than those offered for wholesale orders.
So the same product on Aliexpress is more expensive than on Alibaba for the reason that on Aliexpress you buy by the piece, while on Alibaba you have an MOQ or minimum quantity that you have to order.
It is clear that such customers are different and that the one who buys more can have and has a better price.
So, Alibaba is cheaper than Aliexpress, i.e., B2B purchase (buying in bulk) is cheaper than B2C (buying by piece).
If you're an individual and primarily purchase items for personal use, these platforms offer a convenient and often cost-effective option.
In this text, we have taken Alibaba and Aliexpress as examples for comparison, but these are general rules that apply to all B2C and B2B sites.
Cheaper purchase
Buying in bulk is certainly cheaper than buying by piece.
But shopping on Alibaba and other B2B sites (Made-in-China, Globalsources...) is not always the same.
There are two parameters that affect your final price: quantity and transportation.
A customer who orders, say, 500 phone cases cannot have the same price as a customer who orders 50,000.
That is why you have different prices on Alibaba for different quantities.
So if you order a larger quantity, you get a cheaper product per piece.
It should also be added that if you are capable, skilled, and know how to approach the seller, you may be able to bargain and get better prices.
Transportation also plays a significant role. Sea freight is generally cheaper than air freight.
And there is a difference: it is not the same to send merchandise in a LCL (Less than Container Load) or to fill the entire container yourself (FCL Full Container Load).
It's often more cost-effective to order a larger quantity of goods and rent a full container (FCL) than to ship a smaller quantity in a consolidated container (LCL).
The profitability depends heavily on the type and quantity of goods you're ordering. To determine the most cost-effective solution, consider the following:
- Calculate the total cost:
- FCL: Include the cost of goods, ocean freight, customs duties, insurance, and any other relevant expenses.
- LCL: Factor in the cost of goods, ocean freight (which will be higher per unit), handling charges at both ends, and other associated costs.
- Determine the landed cost:
- Calculate the price of each product after all costs are included and the goods arrive at your warehouse.
By comparing the landed cost per unit for both FCL and LCL, you can identify the most profitable option for your specific order.
If you're unsure which option is best for you, we can assist you in evaluating your needs and suggesting the most cost-effective solutions.
This is an important factor that many buyers overlook.
The most profitable purchase
China boasts a vast domestic market, leading to a unique situation: many high-quality manufacturers focus solely on domestic sales, overlooking the potential of international markets. This presents a paradox, as these companies often possess the expertise and resources to be successful globally.
Exporting can be a significant undertaking. It requires obtaining export licenses, meeting international standards and certifications, employing multilingual staff, and managing complex logistics. These costs can be prohibitive for smaller or less internationally-focused manufacturers.
As a result, many factories prioritize the domestic market, finding success within China sufficient for their business needs. These companies are often not listed on platforms like Alibaba, making them difficult to find for international buyers.
This hidden market offers access to a wide range of products, from extremely low-quality imitations to truly exceptional goods.
While you might find competitive prices on Alibaba, an experienced agent in China can often uncover even more favorable deals by connecting you with these domestic-focused manufacturers.
It's crucial to understand that Alibaba hosts a diverse range of sellers, from genuine manufacturers to resellers. Many companies on the platform claim to be manufacturers but may actually be distributors or wholesalers. This can create challenges for buyers.
Dealing with resellers can lead to various issues, such as inconsistent quality, delayed shipments, and difficulties in resolving disputes. Resellers often have limited control over the manufacturing process and may not be able to provide the same level of support as direct manufacturers.
An experienced agent can help you navigate this complex landscape, identify reliable manufacturers, and negotiate favorable terms. They can leverage their local knowledge and industry connections to connect you with the most suitable suppliers for your specific needs.
Your calculation
Buyers always start with the logical assumption that if I have to pay someone else (in this case an agent) it will cost me more in the end, all together.
However, when buying from China on a large scale, that's not really the case.
Let's consider an example: you're interested in purchasing 1000 phone cases, and you find them listed on Alibaba for $1 per piece. This initial price might seem appealing, but it's crucial to remember that Alibaba prices are often not the final price.
Sellers often use lower initial prices to attract buyers. Once you contact them, the actual price may be higher.
Now, imagine that an agent can source the same phone cases for $0.90 per piece or even lower. This allows for a potential cost savings of $100 on your order of 1000 units.
While the agent's fee may seem like an added expense, it provides significant benefits:
- Guaranteed Quality:** You can rely on the agent to verify the quality and authenticity of the products.
- Reduced Risk:** The agent can help mitigate risks associated with international trade, such as shipping delays, customs issues, and potential disputes with unreliable suppliers.
- Competitive Pricing:** As experienced importers, agents often have access to better shipping rates and can negotiate more favorable prices with suppliers.
We understand that navigating the complexities of importing from China can be challenging. That's why we offer our expertise.
To illustrate the value of our services, we invite you to provide us with your target price and desired quantity for your desired product. We will then conduct a thorough market analysis and provide you with a competitive price quote, including all costs associated with sourcing, production, and delivery to your customs..
This service is completely free and carries no obligation. If the price meets your requirements, we can proceed with the order. Otherwise, you are under no obligation to proceed.
We believe that utilizing the expertise of an experienced agent can significantly streamline your import process, reduce risks, and ultimately improve your profitability.
**Don't let potential pitfalls and hidden costs derail your import success. Contact us today for a free consultation and let us help you navigate the complexities of sourcing from China.**