I'd like to introduce Sam Boyd, someone who I've gotten to know over Twitter. Our first conversation revolved around Alibaba and how effective it is as a sourcing platform. It started off as a debate which then lead into a new business friendship! I hope you enjoy this guest post.
Everything you need to know about sourcing methods that do not involve Alibaba, or other supplier databases.
First Off, Who Am I, and What Do I Know About Sourcing?
My name is Sam Boyd, and I’ve been purchasing from China since 2008. In 2013 I moved to China to open my own sourcing company. I’ve helped build products for startups, Shark Tank brands, Kickstarter products, Fortune 500 companies, and A LOT of Amazon businesses of all sizes.
Almost every conversation with e-commerce sellers, in my 13 years of experience, started something like this. “Hi Sam, I am looking for your help in quickly finding the best quality product, from a rockstar factory, at the cheapest possible price.”
Searching for this trifecta of price, quality, and speed is like searching for a pink unicorn. It doesn’t really exist.
Sourcing companies want you to believe that it does, but only if you partner with them.
Trust me, I own a sourcing company in China, and I have done exactly this.
All of Our Preferred Suppliers Were Found Outside Alibaba
My business has an active database of over 3,000 qualified suppliers. 80% of these suppliers were sourced via Alibaba.
However, our top 20% suppliers were found outside of Alibaba.
In this article, I am going to teach you how we sourced beyond Alibaba and show you that you don’t need to own a sourcing company in China to find good suppliers.
Understanding the Suppliers Not on Alibaba
Contrary to popular thinking, you can’t find every supplier on Alibaba. There have been enough lawsuits and internal leaks within the conglomerate for me to confidently believe they favor their paying advertisers over everyone else.
Who are their paying advertisers?
All suppliers with some kind of approval badge, or golden star next to their name has paid Alibaba for that recognition.
When a factory doesn’t want to list their company on Alibaba, the first reason that comes to mind is that they don’t want to buy into the extortion practices of paying more money to look more credible to buyers.
Other factories don’t need Alibaba because the leads are rarely from qualified buyers.
Remember when you had dreams of buying from China to sell online?
I am sure you hopped onto Alibaba, with little to no understanding of international trade, and began talking to factories.
Multiply that with every aspiring entrepreneur in the world, and you now have an understanding of what the average factory salespersons inbox looks like.
If there are good suppliers not on Alibaba, where are they?
They can be found all over the place, and if you are patient, and look hard enough, you should be able to find them.
6 Ways to Source Outside of Alibaba
There are other supplier databases, but I usually consider them a cheaper version of Alibaba.
Sure, Global Sources can be good for electronics, DH Gate can be good for low quantities, and Made in China can be good for... well, nothing really.
But overall, it is a good idea to look through all supplier databases first, just to get a general understanding of how many suppliers exist for your intended product.
Once you’ve exhausted the supplier databases, then you can begin utilizing the following tactics.
Online Sourcing Tools
After paying for subscriptions to Import Genius and Panjiva, I’m insanely happy to have found ImportYeti. Essentially the free version of the two services mentioned above.
If you’re unfamiliar with these tools, they consolidate publicly available trade data of all shipments imported into the US. The data usually identifies the product, buyer, and supplier. This means you can perform a search on a product and identify which factory the product came from.
Want to know which factory Logitech uses for their keyboards and mice? ImportYeti will help you find them.
Want to know which factory your biggest Amazon competitor us using? ImportYeti will help uncover these details.
The ways you can use this tool are endless, and it is ultimately up to your own creativity and investigative skills to get the most out of it.
Pro tip: If you want to get really good with these tools, study Open-source intelligence, or OSINT techniques. Sometimes I feel like a private investigator after I’ve uncovered an incredible supplier that I super successful brand worked very hard to hide.
Maintain Relationships with Salespeople
Factory salespeople can be your key to the manufacturing Kingdom.
I like to classify factory salespeople in three different categories.
1. The unskilled barrier between me and the supplier. They usually have little to no interest in helping beyond sending over an incorrectly made proforma invoice with a mistakenly inflated price.
2. The motivated opportunist. They can be incredibly helpful, but they’re clearly in it for the short-term gain, and look at every buyer as a dollar sign.
3. The friendly, open-minded, honest salesperson. These are the ones you will gravity towards, even if the factory isn’t as good as others. You find yourself excited to find someone who wants to help make your project a success.
Anytime you find a friendly, open-minded, honest salesperson, do everything in your power to maintain communication with them.
Talk to them, become friends with them, learn about their family. Do whatever it takes to form a strong bond.
Obviously, you need to place orders with their factory to maintain the motions of the relationship, but make it a point to build your rapport with them so they feel they’ve earned your trust.
Good buyer supplier relationship can take years to make. But they’re worth it, because the better you know them, the more inclined they’ll be to want to help you and suggest other suppliers for other brand.
You just need to be careful they don’t assume the role as your sourcing agent.
Usually, the best relationships I’ve built with salespeople have been where I was not their top buyer, but top three, and they were always too busy to focus on projects other than their own orders.
Buy Products and Look for Clues
Factories will print their names on products and packaging material for a variety of reasons.
In some instances, it is a compliance requirement. For example, look at the tiny printing on your phone charger, and you should see a supplier’s name.
The electronics brand Xiao Mi graciously shared their charger supplier with me after I purchased one of their phones.
In other instances, small brands will rely on their supplier’s warranty program. If you look hard enough, you may be able to find an address or business name pointing back directly to the supplier.
This is not a foolproof method, but if you are sourcing electronics, or compliance heavy products, eventually you’ll get lucky and find yourself holding a treasure map to a quality supplier.
Make Friends with People Living in China
Both expats and local Chinese people living in China can be an incredible resource.
I was able to get connected with a fantastic lighting factory through a friendship I made in university with a Chinese exchange student studying in America.
It turned out his aunt was a merchandiser for Schneider Electric, and she made the connection.
I found another supplier through a Canadian friend while he was working in a hotel in Shanghai. His girlfriend at the time was the salesperson for at a stuffed animal factory.
This contact came in handy for a contract we have with a major European theme park.
I have countless examples of how a seemingly random connection led me to an amazing factory.
Keep in mind, this method is not foolproof. I believe I’ve been led to more terrible factories than quality factories using this method.
But the quality ones have paid dividends over the crappy suppliers by tenfold.
If you don’t know where to start, hop on LinkedIn and look for an old college buddy living in China. Reach out to them, strike up a conversation, and ask if they know any good suppliers.
In China, everyone knows someone. If you look hard enough, you’ll end up striking gold.
Exhibitor lists at major tradeshows
There are a lot of good suppliers that are not on Alibaba, but that does not mean they don’t spend money marketing.
It is incredibly common for a supplier to identify a handful of international tradeshows, both within China, and around the world to attend in order to attract customers.
The lists of exhibitors can be found online, but this data is often messy and difficult to parse.
For those with a basic understanding of website scraping tools, you can usually compile a full list of suppliers through a tool like Octoparse or Webscraper.io.
For those who can’t be bothered by figuring out how to use these complex tools, head over to Upwork and find someone skilled in web scraping or data entry to put the list together for you.
Depending on the type of product category you’re in, and how important it is for you to know every potential supplier, once you have this data, you can do quite a lot with it.
Here are some techniques we’ve used in the past to find new suppliers.
1. With the help of a data entry freelancer, we built a list consisting of every exhibitor attending the Canton Fair. We organized these suppliers based on a variety of variables, however the helpful ones turned out to be; product category, location, and if they were on Alibaba or another database. When we found an exhibitor without an online presence, we dug deeper. Sometimes they turned out to be duds, and few times it turned out to be a promising company to look into much closer.
2. We took a list of exhibitors for an upcoming trade show and researched them heavily. Once we found one that was interesting, we sent over an introductory email informing them we will be attending the show and wanted to find a time to go through their products. We usually personalized these emails and included photos of products and specifications we wanted to see. Good suppliers flagged these emails and assigned us their senior salespeople. The moment we arrived at their booth, we were greeted, and they had their material prepared specifically for us. This creates an excellent first impression and allows for strong relationship building after the fair. Factories want to believe their trade show investments were money well spent, so if they remember you as a customer they met at a show, you’ll have an easier time strengthening your relationship with them in the future.
Befriend Salespeople at Testing Companies
I’ve saved my favorite, most powerful tip for the end.
You may begin to see a trend here in that my tips largely revolve around befriending people in China. And while that is a huge advantage, this tip is much less about the friendship, and more about the position.
Close connections within the quality and product compliance world know that I will happily pay a handsome commission to anyone who points me in the direction of a good quality supplier that rigorously tests their own products with third-party laboratories.
Very few tier-two and tier-three suppliers (tier-one suppliers make iPhones and Samsung refrigerators) take the initiative to ensure their products stay up to date with various countries product safety and compliance changes.
In most instances, a buyer needs to point out a change, and push the supplier to retest their product.
Every once in a blue moon I come across a supplier who diligently stays up to date with these changes and utilizes third-party testing companies to push themselves to consistently improve their own products.
Hypothetically speaking, if you happened to know a salesperson that worked at an internationally recognized testing laboratory, such as SGS or TUV, certainly they would have access to some of the best suppliers in the world.
It is up to you to figure out your best way in, but these databases are considered the holy grail for just about any product category.
Final Thoughts on Sourcing from China
My company, Guided Imports, gets a lot of requests from e-commerce sellers on a daily basis, always asking for us to help them source suppliers.
Each time I receive one of these requests, I urge entrepreneurs not to use us or another sourcing company. This isn’t a sales technique, or a strategy, it is genuinely because I know this can be done entirely on your own.
Even when your company is a seven or eight figure e-commerce brand, the owner needs to be the primary face with the factory. And a sourcing company is not going to allow you to be that face.
As you grow, you can setup a small team in China that you continue to manage, but you make sure that the relationships are built between you and the supplier, not your team and the supplier.
Alibaba is a great tool, and one you need to use on a regular basis. But it is important to remember that it is not the only tool.
Even when it feels like it is the most convenient way to source suppliers, you are in a very competitive market, and you need all the edge you can muster.
Are You Shipping from China?
Guided Imports is also a freight forwarder, and 90% of our clients rely on e-commerce for at least one of their sales channels. We have incredibly competitive shipping rates, due to our trade volume and ability to operate like a local Chinese forwarder. But service and communication can’t be beat.
Let me prove it to you by preparing a quotation for your next shipment.
You can learn more about China freight forwarding services by visiting Guided Imports. If you have China sourcing related questions, feel free to reach out to me on Twitter @bySamBoyd
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