How small businesses can find buyers in China

It’s possible to reach buyers in China without forming a joint venture or opening a subsidiary. However, before you book a flight to Shanghai or Beijing, you must decide how you want to sell your products to China. This article presents a few options for small businesses looking for buyers in China.

Selling through a distributor

There are many reasons a small business should find a Chinese distributor. A distributor have an already-established network of retailers, can order larger volumes, the required importing licenses and storage facilities. This allows you to focus on making great products instead of building a network of retailers from scratch.

For natural reasons, distributors are focused on the Chinese market, and many of them don’t have employees that can communicate in English – or even an English Language website!

Contact the British embassy in Beijing or Consulate Generals in Shanghai, Chongqing, Guangzhou or Hong Kong for a list of reputable distributors in China. You can also find them on Alibaba.com or by visiting one of the yearly trade fairs.

Advantages of selling through a distributor

• Can order larger volumes, enabling a lower freight cost per unit
• Has an established network of retailers in China and the ability for further expansion
• Has the relevant import licenses that are required to import anything into China

Disadvantages of selling through a distributor

• Efficient and easy communication cannot be taken for granted
• Distributors are not charities and need to take a cut on the profit as well
• You lack control over where your products are sold

Where you can find Chinese distributors

• By contacting the British embassy in Beijing or any of the consulates in Shanghai, Chongqing, Guangzhou or Hong Kong
• Alibaba.com and hktdc.com
• Trade Fairs
• Google and Baidu (China’s number one search engine)

Selling directly to local retailers

It’s possible to export directly to stores in China. However, many, if not most stores have no previous experience of importing products and proper licensing is required. Another disadvantage is the lower volumes individual retailers can order. The freight cost per unit is much higher when shipping individual LCL (Less than Container Load) cargo to various buyers, compared to a larger shipment to a single distributor.

Advantages of selling directly to retailers

• Gives you complete control over pricing and which stores are selling your products

Disadvantages of selling directly to retailers

• Building a network of retailers from scratch is time consuming, especially considering the language and cultural barriers. Expect to spend a lot of time in China.
• Most retailers are not importers and are thus lacking the required licenses for importing products to China
• Individual retailers requires individual shipments. LCL shipping is much more expensive per shipped unit compared to FCL [Full Container Load] shipping

Where you can find Chinese retailers

•  Trade fairs
• Google and Baidu

Freelancer Agents

Freelancers has been used for a long time by companies importing from China. It’s not unusual that former exporting agents switch focus and become importing agents. The main problem is that freelance agents lack the required licenses to import products to China.

Advantages of hiring a freelance agent

An agent “on the ground” in China can still act as your representative and manage communication between you and your Chinese buyers. An agent can help you with sourcing and auditing of prospective buyers and partners.

Disadvantages of hiring a freelance agent

There’s no point in “reinventing the wheel” by letting your local agent build a network of suppliers from scratch. A freelance agent is a good complement to your overall supply chain, but should not be considered as a substitute for a proper distributor.

Where you can find Chinese freelance agents

• oDesk.com
• Elance.com
• Freelancer.com

Fredrik Groenkvist is the Co-Founder and Limited Partner ofChinaImportal.com, a Shanghai based information services company who provides startups and small businesses with an online system for managing sourcing and production in Asian countries.Connect with Fredrik Grönkvist on Google+

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