More and more Chinese sellers are venturing overseas. “Cross-border e-commerce + industrial belt” is currently the most popular and highest-yielding method in the foreign trade industry. As we enter 2024, China’s domestic industry is facing a blue ocean in cross-border trade. While this offers a new path amidst fierce domestic industry competition, it is also an inevitable result of China’s industrial accumulation over the past thirty years, which will undoubtedly propel “Made in China” to new heights in international market competitiveness and brand strength.
In the face of numerous Chinese sellers, how can overseas buyers find high-quality suppliers? Especially for B2B industrial clients who may find it inconvenient to conduct on-site inspections and are unable to send samples for large products such as excavators representing construction machinery, how can they judge the quality of sellers?
First and foremost, it is crucial to seek suppliers in politically stable regions. This ensures timely delivery, stable exchange rates, payment methods, and provides buyers with a sense of security.
Secondly, assess the seller’s capabilities. Sellers may have 3 categories, factories, trading companies integrated with manufacturing, or purely trading companies. It is recommended to prioritize trading companies. We can refer to the industrial enterprises in the Global Fortune 500, as many have separated production facilities from sales companies. The primary model is the “factory + sales company + local distributors” model. The factory adds a certain profit margin to the products it produces and sells them to its sales company, which then interfaces with customers through specialized sales channels. In this process, unless dealing with super-large clients, the sales company also sells to customers through distributors. The model can be clearly understood through the diagram below:
Practice has proven that professional matters should be entrusted to professionals. Manufacturing companies find it challenging to handle customers as professionally as sales companies do. In understanding customer needs and coordinating company resources to meet those needs, professional sales teams are more outstanding. Manufacturing enterprises invest significant time and effort in managing the supply chain, procurement, production scheduling, quality control, and after-sales processes, which may lead to oversights in meeting customer needs. The same principle applies in the field of international trade, and it can be viewed from three perspectives:
- Many manufacturing enterprises in China are still operated by first-generation entrepreneurs who have not fully transitioned to a international trade mindset. Basic language barriers may also remain unresolved.
- Customer demands are constantly changing, making it challenging for factories to keep up with these changes in a short time. In contrast, international trade teams can spend more time understanding customer needs and finding domestic suppliers to meet those needs.
- Importantly, international trade companies have more flexible thinking and richer experience. When facing shipping constraints or payment obstacles, foreign trade teams can respond more flexibly and quickly to help customers resolve issues.
Furthermore, it is essential to assess the capabilities of the factories behind international trade companies. Taking excavators as an example. When the budget is sufficient or there are brand requirements, the preferred choices are international top brands such as Caterpillar and Komatsu, as well as top Chinese domestic brands like Sany and XCMG. For those pursuing cost-effectiveness, two recommended approaches are available. Let’s analyze the history of excavators in China: the earliest excavator technology in China originated from Japan, South Korea, and Europe. Through joint ventures, these technologies were introduced to China, fostering a pool of technical talent. While many joint ventures may have dissolved, capable engineers have established their own factories with advanced technologies. These factories may not have well-known brands but offer advanced technology. Some imported brands in China have utilized ODM manufacturing and are now seeking to establish their own brands. Finding those reliable factories allows customers to obtain cost-effective construction machinery. Compared to well-known Chinese brands like Sany and XCMG, prices may be only half as much, and compared to Japanese and Korean brands like Komatsu and Doosan, prices may be 30-50% lower. This approach applies not only to excavators but also to industries like automobiles, medical equipment and etc..
Lastly, it is crucial to find trustworthy international trade professionals. A qualified international trade professional is like finding the right marriage partner, standing firmly by your side to help solve problems when difficulties arise. Such professionals should possess the following qualities:
- Integrity is paramount in B2B online transactions. International platforms like Alibaba can assist in verifying the credibility of companies. Companies like Germany’s TUV Rheinland can greatly help customers screen out unscrupulous businesses.
- Strong professional knowledge is essential. Industrial sales professionals need expertise in the industry to better understand customer needs, address pain points, and find the most suitable products for customers.
- Passion for work is crucial. In a sense, enthusiasm for work is more important than work experience. International trade is labor-intensive and requires continuous adaptation to customer needs. It may take handling 100 demands to achieve a 1% conversion rate. Being able to treat customers with the same enthusiasm after 10 or 20 years of work is vital.
- Work experience, while important, is not the most critical factor. In any era and industry, newcomers can excel and outperform experienced individuals.
These are some suggestions on how to choose reliable China suppliers. In the next installment, we will recommend some mainstream foreign trade portals and provide introductions to independent websites.