Best China Sourcing company
That Drives Profit Growth
Buying Small Quantity from China: The Ultimate Guide
In our more than ten years of trade work, we have frequently received inquiries about purchasing small quantities of items from China. Basically, more than half of the customers we contact purchase in small quantities. We found that many of these people had no purchasing experience, they just read a lot of information on the Internet and knew that the goods made in China were very cheap. So they hope to make money by buying small quantity from China and selling them locally or on e-commerce platforms at a higher price.
People with purchasing experience always post online about how easy it is to buy small quantity from China. However, it is not so easy for people who have never bought before. Even in small quantities, there are many problems. The first is that the Chinese supplier has a corresponding MOQ for each SKU product. We have answered this question for you in the previous blog How to lower the MOQ of China suppliers? （6 Tactics).
In addition, the problem that can be caused by buying small quantities from China is high transportation costs. The process of shipping from China to overseas is so complicated, including shipping from supplier warehouse to port or airport, customs declaration in China, shipping from a Chinese port to your port of destination, customs clearance at destination customs, etc. When you buy small quantities of goods, the shipping costs may be greater than the value of the goods. So how do you get small quantities from China at a low cost?
In this article, we will guide you on how to order a small quantity from China.
1. What’s Small Quantity from China Order?
Different companies and different people define small batch orders differently. Most purchasing agents or consulting firms define a small business as one that imports less than $500,000 a year. But for many beginners, that number is too high and may still be out of reach after five years. Purchasing agents usually charge a percentage of the order value, ranging from 5% to 15%. If the order amount is too low, their profit will be very low. This is why it is difficult for small entry-level businesses to find the right sourcing or consulting firm that can provide them with relevant services.
For suppliers, usually order with a quantity lower than their MOQ is a small quantity order.
There is a minimum order small quantity requirement for both standard and custom orders. This is because a supplier has to produce enough to cover the cost of producing or purchasing the raw material it needs to produce. This quantity is often called Breakeven. For example, a printed circuit board, the production process needs to invest in drawing, plate making, mold and labor and so on, the supplier has to bear this kind of cost, so they often require the buyer to reach their MOQ. If this small quantity is not reached, the manufacturer will suffer a loss and will not accept the order. For different products and different customization requirements, the MOQ set by the supplier is different. However, MOQ is usually higher than 500 PCS.
For us, there is no such thing as a small quantity order. First of all, we don’t charge a percentage of the order amount, we charge a fixed service fee. We are more than happy to help our customers as long as they find it profitable to cooperate with us.
For buyers, the concept of a small quantity order may be related to cost. Before you officially start your business, you must calculate the cost and profit of the project. In this process, you may reach a cost and profit balance that minimizes your risk and maximizes your profit when you purchase the amount and quantity.
In this blog, small-batch buyers are defined as those who purchase for less than $2,000 per order, and those who are just starting a new business. This blog will focus more on helping this group of people.
2. What kind of Products are Suitable for Small Quantity Buyers?
For starters, the first step in starting your business is to choose your small quantity product. This is also the most important thing for you, the beginning is difficult. The selection is critical to the success of your project.
For Amazon sellers, only one hot-selling item is enough to make them incredibly profitable and increasingly successful. And the consequence of choosing the wrong product is that your small quantity product may not be popular in the market or make you unprofitable even if the sales of your product are not bad.
The Internet has been full of product selection experts who have published articles on how to choose products. With 11 years of purchasing and exporting experience, we do have some understanding of product trends. But when it comes to trends on e-commerce platforms such as Amazon, shopee, those experts are probably more professional than we are. We suggest you check out the relevant articles.
But the products recommended by these small quantity product selection experts are more based on platform trends, and your profit can be influenced not only by marketing but also by your purchasing costs. Based on our knowledge of purchasing, we will give you some advice on choosing small quantity products.
High value or small size products
For beginners, sea shipping is usually your first choice. This is the most affordable mode of transportation. There are two ways of sea shipping: FCL and LCL. The corresponding billing method is not certain.
FCL (full container load)
FCL refers to a whole container, the most basic is 20GP, 40GP, 40HQ. After the ordinary goods are loaded into these three containers, they will be charged according to the container type (each container has a limited weight, and the shipowner needs to charge for overweight cargo). Except for special containers and special cargo. Usually the FOB Shenzhen
Cost of a 40GP container is $8000-$1500, which can accommodate 55-58CBM of goods.
FOB prices for LCL and FCL are different. Below is the detailed list for your reference
1. Booking fee
2. Trucking fee(from the factory to port of loading)
3. Export customs clearing charge
4. Port construction charges
5. ORC(original receiving charge)/THC(terminal handling charge)
6. Documentation fee
7. AMS fee(the U.S)/ENS(Europe)
8. Handling charge
9. Telex release charge
10. Seal fee
LCL (less than container load)
LCL is the cargo of several or more shippers in a container, also called bulk cargo. There are many ways to calculate LCL freight, and the calculation standards may vary according to different shipping companies, freight forwarders, ports or warehouses. However, it usually includes the following items:
1. Trucking fee(from the factory to port of loading)
2. Export customs clearing charge
3. CFS charges(container freight station)
4. Documentation fee
5. AMS fee(the U.S)
6. Handling charge
7. Telex release charge
The FOB price will vary due to the different methods of operation of suppliers. For example, last week we helped the customer arrange delivery. The freight forwarder charges 3,000 CNY for trucking a 40ft container from the factory to Yantian Port in Shenzhen. We thought that was too expensive, so we consulted another group of drivers who specialized in transporting goods to the port. As a result, the driver team was able to deliver the goods for only 1,500 CNY, cutting the cost in half this time. Some suppliers may hand overall shipments to freight forwarders for convenience, so FOB fees will be very expensive, and ultimately these fees are collected from customers.
If possible, we strongly recommend that you use FCL (full container load). LCL unit price (less than container load) is higher than FCL. In addition, the choice of FCL shipping can avoid the hidden costs of international shipping. There are many items in LCL fees, some of which are not uniform and you may not be able to distinguish them. Therefore, the best solution is to avoid LCL as much as possible.
When you purchase goods in small quantities, you must not be able to reach FCL.
Transport is always a big problem for small volume importers. For LCL, their transportation volume is always too small, usually less than 2 cubic meters, so air or express must be chosen, whose cost is 8-10 times that of LCL sea transportation.
Large sizes or packages of products (such as computer headsets and live streaming light) are not suitable for small volume importers, as both express and air freight charges are based on size and weight (length * height * width). Fashion accessories are a good choice for a small number of buyers. This means that your shipping costs are even higher than the product’s value, but your competitors can import through LCL shipping at 80% lower costs than you. Then you have no chance to compete with them in the local market.
Therefore, for a small number of importers, high-value, small-size products are a better choice. Transport costs are not high, sometimes as little as 10 percent of the product’s value. Such as memory cards, Bluetooth earphones, U disk and so on. And when you design the product packaging, please experience reducing its size, which will also save you a lot of transportation costs. As time is tight, most importers will not choose sea freight, so you do not have to worry about your freight will be higher than competitors.
3. How to find Chinese Suppliers for Small Quantity Orders?
Most small quantity buyers find Chinese suppliers on the Internet. Even customers who buy in large quantities rarely actually go to China to find suppliers, except to attend some exhibitions.
The first is the high cost, including airfare, hotel fees and transportation allowances, amounting to about $4,000 for a week in China. Second, finding a good Chinese supplier is a daunting task, unless you go directly to a trade fair or Yiwu wholesale market or something like that. Or you have already contacted the supplier before coming to China.
But this usually requires you to have a very good understanding of the Chinese wholesale market, otherwise, you can hardly find the most suitable wholesale market for you. And communication is also a huge problem, suppliers are likely to offer more expensive prices to foreign buyers than to local Chinese buyers. The cost of coming to China to find suppliers in person may be higher than your profit. Unless you are already confident in your business.
Below, we will introduce the most popular cross-border e-commerce sites for small quantity orders in China.
For both large and small quantity buyers, searching for Chinese suppliers on Alibaba is the best choice. Alibaba has two market segments: retail and OEM/ODM orders. There is no MOQ for goods ready to ship(i.e., retail products). If you want to buy a small quantity of products on Alibaba for testing, you can choose products marked “ready to ship.”
Ready to ship means it’s a product that the supplier already has in stock, so you can buy it in small quantities. But basically, you can’t customize the logo. When you buy a small amount of the product, the price is usually higher and you have to pay for expensive shipping. In this way, the “ready to ship” price is essentially equal to the retail price of the product.
However, if you really want to buy a small amount from a supplier to test the market and product quality, then this is a good option. If you plan to make a long-term purchase, remember to ask the supplier before buying if the product is available for long-term use. Because some products that are ready to ship may also be slow-moving goods by the company, the supplier may not stock them after clearing out the inventory.
For OEM and ODM orders, the total MOQ range is 500 to 2000 pieces. The MOQ can be affected by many factors. Please refer to another article: How to lower the MOQ of China suppliers? （6 Tactics). Instead of looking for the cheapest price, you must know the balance between price and quantity.
Dhgate and AliExpress
If you still have difficulty getting the MOQ from Alibaba suppliers, maybe you can only go to DHgate and Aliexpress. Generally, DHgate tends to small-batch buyers to buy a small quantity between Alibaba and AliExpress. AliExpress is more inclined to retailers, even though it claims that it can conduct online wholesale, and most Chinese suppliers are aware of this fact.
4. How to Ship from China When Purchasing Fs?
I have to say that, as mentioned at the beginning, the mode of transportation is indeed a big problem for small-batch buyers. Sometimes the freight is even higher than the value of the goods, so you have to give up a small batch of products imported from China. All the following we summarize the tips to help you save shipping costs when importing from China.
Correctly choose the freight forwarder
Now the world’s major shipping companies have landed in China one after another, and all major ports have their offices. There are, of course, many advantages in doing business with these shipowners: their strength, excellent service, and standard operation. However, if you are not a large shipper and cannot get preferential freight rates from them, it is better to find some medium-sized shipowners or freight forwarders. Some freight forwarder has signed a contract with the shipping company, and the preferential freight rate they get is not available to the general cargo owner from the shipping company.
Don’t choose a too famous shipping company. for small and medium cargo owners, their prices are indeed too high. And the quotation of a small quantity forwarder is lower, it is difficult to guarantee the service because of insufficient strength. In addition, the large shipping companies have not many offices in the mainland, so it’s better chose some medium-scale freight forwarders; first, the price is reasonable, and second, the cooperation is more tacit after long-term collaboration.
The same shipowners, although some are not well-known, the schedule and service are guaranteed, and the price is much more reasonable. We have a deep understanding of this. We rarely do business directly with those very famous shipping companies, but we choose some medium-sized shipping companies first and then find their designated agents. “Generally, these designated agents get very cheap prices from the shipowner.
After working with these agents for a long time, we can get very low freight. Some freight forwarders will even truthfully inform us of the reserve price and a little profit as the selling price. Based on our many years of experience in the storage and transportation department, we know that different shipping companies or forwarders have their own advantages on different shipping markets. Find a company that has an advantage in the operation of a certain route; not only will the shipping schedules be tighter, but their freight rates are generally the cheapest in the market. To do this, you need to have a certain understanding of the shipping market.
There are many channels for understanding this information. In the past, there were more introductions between peers. Now you can find relevant information through some transportation websites.
Learn to bargain with the shipping company
Both the shipping company and the freight forwarding agent’s business personnel in the request for goods are quoted only their highest freight. The discounted shipping rate you can get depends on your bargaining power. Generally speaking, you can consult several companies to understand the basic market conditions before accepting the company’s freight. The discount you can get from a freight forwarding agent is usually about $100. You can know from the bill of lading issued by the freight forwarder which company he will finally transfer to. The next time you find the company directly, you will receive direct shipping.
Combine goods from different suppliers and ship them together
You can combine the goods from different suppliers into one shipment and ship it to your location, which saves a lot of transportation costs than if you pay for each item separately. Then you need someone to help you consolidate the goods in China and send them to your location. For shipping, it makes even more sense. If you import 5 different products from 5 suppliers, 0.5CBM each, you may consider combining them by LCL shipping. In this way, your shipping costs will be 80% less than express delivery.
Or, because there is no cheaper solution, you have to pay for 5 international couriers separately.
- One solution is to find a reliable freight forwarder with its own warehouse, which can then be used to consolidate goods (usually, freight forwarders will consolidate goods for free). But the problem is that most freight forwarders do not have their own warehouses. They just pick up the goods from the supplier and then send them to the freight company for loading into containers (this may be due to the peculiarities of the Chinese freight forwarding industry).
- Another solution is that you can choose a reliable supplier, and then let other suppliers send all the goods to him, and then the freight forwarder can pick up the goods together in one place.
It is strongly recommended that you try to combine the goods. The difference in weight and volume of different products will increase the separate shipping costs, and the handling costs will be much higher. Why not try to combine and ship it together? In the long run, combined transportation will help you save a lot of transportation costs, and it will be an important step for your business expansion!
5. How Can You Avoid Scams When Buying Small Quantity From China of Products as a Beginner?
Many novice companies are afraid of being cheated when buying small quantity from China over the Internet, but the truth is that very few people are in this situation now. You can refer to How to select Alibaba suppliers？(7 Key Points) to avoid encounter scammer suppliers
No matter you buy from Alibaba, AliExpress or DHgate, no vendor can withdraw money without shipping the product. Because of the online wholesale platform, all vendors are required to provide their company registration information at the beginning. They then have to pay an annual fee to become a provider on these platforms. For example, to become a Gold Supplier to Alibaba, you need to pay a membership fee of 29,800 yuan ($4,590) per year; Pay a $4,700 deposit to become an AliExpress provider.
Here’s an interesting thing: Many people believe that gold suppliers are qualified suppliers that have been verified by Alibaba, which is what Alibaba says. But that’s not true. All the suppliers on Alibaba are gold suppliers because they have already paid for it. Therefore, when searching for suppliers on Alibaba, you can ignore “Gold Supplier”.
By contrast. “Verified Suppliers” is a higher level of the supplier, as suppliers need to pay a higher fee of approximately ￥80,000 (the US $12,320).
Therefore, the worst-case scenario is that the supplier sends a product of poorer quality than you expected, or receives less product. When finding suppliers online, you should proceed with caution and not just look for the lowest price. Otherwise, you run the risk of accepting cheaper quality or questionable products. You cannot return the goods to China, because in this case, the freight and taxes will even exceed the value of the goods. If you come to China to negotiate with suppliers in person, it will also be a big expense. By following our tips, you can avoid 99% of scams.