Remember to always consider shipping costs when starting or running a China wholesale business.  The wholesale price of your item imported from China maybe $1, but the shipping cost may be $10. So, in effect, you pay $11 per item, not $1. Paying more for shipping than the actual product is definitely not a smart business move.

Heavier, larger items will generally incur higher shipping charges. When starting your business, it might be a good idea to start by importing small, lightweight items.

If you want to start a China wholesale business, you can follow these steps:

1. Be prepared

Starting a wholesale business of products from China requires some planning. Before starting a business, please understand the following points:

1) Do you need a wholesale license?

A wholesale license may be required to import certain wholesale items from China.  It may not be required for all projects, but it’s a good idea to check if your business requires one. You must check your local laws regarding licensing requirements.

2) Where is your business location?

Different regions not only have different laws and regulations but also different potential niches. Before you take the leap, you must know whether your wholesale business is legal where you live.

3) What type of wholesale business do you want to run?

The term “wholesale business” is a general term that can be roughly divided into two types:

• You buy bulk items from wholesale suppliers and sell them directly to consumers.
• You buy wholesale from suppliers and sell to retailers.

If you are new to the wholesale business, it is recommended to sell directly to consumers because it is less risky. But if you have wholesale business experience, distribution channels, and business scale, you can choose one of the two.

4) What products do you want to sell?

If you haven’t decided yet what product you want to sell, here’s a tip. You should always consider importing products that are in high demand. It may be a product that, despite being in high demand, is not readily available in your home country. Or it could be very popular and available locally, but sourcing it cheaper from China could make it more profitable.

To understand which products are in high demand, a rule of thumb is to look at current trends. Some product categories that are very popular in China wholesale are:

• Home Decoration
• cell phone
• electronic product
• Fashion Accessories
• watch
• Gift Boxes
• hair accessories
• pet supplies

5) Where will I store my wholesale inventory?

You need a safe and secure place to store your wholesale inventory. If you already have a warehouse, you probably don’t need to worry. For those who don’t, you may want to rent a warehouse where you can ship directly from China.

2. Build your wholesale business

Now that you know the basics of a wholesale business, you need to take the necessary steps to set it up.

1) Obtain a wholesale license

Items you plan to import from China may not require a wholesale license. So why should you apply for one? All state governments impose sales taxes, and you don’t want to be taxed multiple times between the time you get your item from the manufacturer and the time you sell it to a local consumer. A wholesale license allows you to purchase products in bulk with the intention of reselling them without paying taxes. Your business may also need a sales tax license.

2) How to apply for a wholesale license?

You can first log on to the U.S. Customs website to learn about wholesale license requirements. Different government agencies have different licensing requirements. For example, if you import skincare or hair care products from China, you may need to meet FDA requirements.

You can obtain a wholesale license in the following ways:

• Log in to your local official website
• Learn about wholesale license requirements
• Create a legal entity for your business
• Apply for a sales tax ID
• Submit your application

3) How much does a wholesale license cost?

Different states have different requirements for obtaining a wholesale license. Therefore, wholesale license costs may vary from state to state.

4) Find the right wholesale supplier in China

The most important part of building a Chinese wholesale business is finding the right wholesale supplier in China. You can take the next flight to China and start looking for the right manufacturers and suppliers, or do the next best thing. Hire a purchasing agent.

5) What is a purchasing agent?

China Sourcing Agents work closely with you to find, identify, and negotiate with wholesale suppliers and manufacturers in China. China sourcing agents can also help you with market research, quality control, pre-shipment assessment, customs clearance, and supplier development.

A good China sourcing agent is:

• Proficient in Mandarin and English
• Having a thorough understanding of Chinese business culture
• Chinese suppliers are familiar with my extensive experience
• Have extensive quality control experience
• Have experience in auditing and logistics

Working with the right sourcing agent and the right wholesale supplier can revolutionize your business. A good China sourcing agent can help you source high-quality products at extremely affordable prices, thereby making your business more cost-effective. For example Toopus.

3. Grow your China wholesale business

Once you get the right products from the right suppliers in China, your business will start rolling. Now is the time to think about growing your China wholesale business.

Integrating your supply chain can make your business more profitable. In a traditional wholesale business, you buy from a wholesale supplier in China and sell to a retailer who sells it to a consumer. Eliminating the middleman and selling directly to consumers can be an effective way to grow your business.

Your China sourcing agent can play a vital role in the development of your business. Your purchasing agent can take care of the entire manufacturing process, from finding the right manufacturer to shipping it directly to your warehouse. With the right partnership, you can focus on growing your consumer base while your agency handles the rest of the process.

4. Use a viable pricing strategy

Your China wholesale business can benefit greatly from the right pricing strategy.  With the right sourcing agent, you already have the right suppliers delivering the right products at breakneck speed. Now, you need to adjust your pricing strategy to help you grow your consumer base and business.

Your pricing strategy must include:

• your purchase price
• Shipping fee
• Shipping fee (if any)
• Any other miscellaneous expenses

The right pricing strategy can help you recoup all of these costs while still providing consumers with a quality product at the right price.

5. Create your own distribution channels

If you want to develop and expand your China wholesale business, you must create distribution channels. Nowadays, as more and more people use the Internet, you can create your own e-commerce website or sell your products on an existing website. Selling on Amazon and eBay can be a great way to expand your consumer base.

If you want to have your own website, you need to purchase a domain name. It’s easier to sell on Amazon or eBay, but there are already plenty of sellers on those sites. For newbies, it can sometimes be difficult to stand out among the crowd of experienced wholesalers. However, if you are just starting out, selling on Amazon might be a good idea. As it grows, you might consider investing in your own e-commerce website and opening up another sales channel.

6. Market your business

Whether you are building your own e-commerce website or selling on Amazon, marketing your business is crucial.

Your marketing plan must focus on the following:

• Bring in new wholesale customers
• Get more orders from wholesale customers
• Increase sales in a wholesale business

There are many ways to market your business, such as cold calling, email campaigns, and sending out samples. If you’re not very good at handling marketing on your own, it’s recommended that you seek professional help. If you have a limited budget, you can hire a marketing agency or even a freelance marketing agent.

7. Tips for wholesale importing goods from China

China is often called the world’s factory, with thousands of products to choose from. For a successful China wholesale business, you must choose products that will make you a profit.

For those considering starting a wholesale business in China, here are some practical tips:

• You should know everything there is to know about your niche. When you fully understand your niche, you can develop an effective marketing strategy, the right pricing strategy, and more engagement with your target audience.
• If you are new to wholesale business in China, start small. If you have big dreams, that’s absolutely fine, but in the beginning, a realistic approach will be more helpful for your startup. Choose a niche that doesn’t have too many big players so you won’t have as much trouble finding success. A viable niche may be one that most retailers don’t sell.
• Deal with low-risk products first, those least likely to cause harm. By dealing with low-risk products, you protect yourself from any potential future lawsuits.
• Establish close working relationships with your Chinese sourcing agents and Chinese suppliers. Building a cordial relationship with both parties can play a key role in growing your business.
• Since your products are primarily sourced from China, understanding Chinese business culture is helpful in the long run.
• Never compromise on quality. Getting high-quality products at affordable prices is the biggest advantage of sourcing from China. However, the quality of the product is directly proportional to the price you pay. When you pay a price that is too cheap, the supplier may cut corners, resulting in a low-quality product. If the products you purchase do not comply with regulations and certifications, you may face legal consequences.
• Please be aware when you sign a sales agreement with a Chinese supplier. Make sure to include important points like product specification terms, quality control, and return conditions so that you only get high-quality products.

8. Conclusion

Starting a China wholesale business, or any other business for that matter, is not an easy task. There are risks associated with sourcing from China, which can be mitigated if you work with the right people and pay attention to detail. However, the benefits of sourcing products from China often outweigh the disadvantages.

China is an emerging market, which means there are excellent opportunities for new businesses. The right sourcing strategy can be extremely profitable for your business. However, language barriers and a lack of understanding of Chinese business culture often act as barriers to sourcing products from China.

The right China sourcing agent can eliminate most of your worries about sourcing from China. From finding a reliable and experienced manufacturer to handle quality control and logistics; they can help manage much of your business. When you work with the right sourcing agent, you can focus on other aspects of your business to create a more successful and profitable China wholesale business.

The post How to Start a Business of China Wholesale appeared first on bestosourcing.