Friday, September 2, 2011

Doing business in China: How we found our suppliers

This article was first published to Power Retail.

We're often asked by people moving into the online retail space, 'How did you find the suppliers you work with in China?'

The first place we started was the web. Sites like Alibaba list suppliers for all sorts of different products, including women's shoes. The trouble for us was that all of these suppliers wanted minimum orders measured in the 100's or 1000's or shoes per style per colour whereas we wanted to order 1 pair per style per colour.

Our next stop was trade fairs. There are numerous trade fairs in China, some specialise in a particular product category, others like the Canton Fair cover nearly everything. The Canton Fair is one of the most amazing events I've ever been to. It's held in an enormous exhibition centre in Guangzhou that must be at least 1 square kilometre in size. To see all the exhibitors would take at least 3 or 4 days walking at a relatively brisk pace. And because there are so many product categories and so many exhibitors the event is held in 3 parts because the exhibition centre can only hold 1/3 of the suppliers in show at a time. You can source just about anything at this fair, although the skew is towards low to mid quality products rather than the high end.

Unfortunately trade fairs didn't reveal shoe makers willing to make shoes one at a time for us, however we did meet quite a few people in the industry who were able to point us in the right direction. In the end we found some suppliers who were already doing small runs of high quality custom shoes and we went to speak with them. We were fortunate that we approached them during the global financial crisis so orders from their regular customers were down. While the bulk of their business was in wholesaling larger quantities of shoes, they had the capability to do custom shoes and were willing to experiment and work with a new customer.

We followed a similar process to find a second back up supplier in case we had any issues with our main supplier. 3 months in we were having a few problems with getting consistent delivery times from our original supplier so we switched to our back up supplier and we've not looked back, they've been amazing to work with.

I suspect it's possible to find a good supplier online on sites like Alibaba, however in our experience there's nothing like spending time on the ground meeting people in the industry and getting to know your suppliers.

6 comments:

  1. Good post. You're right Michael, you have to meet in person with suppliers. Many companies on Alibaba (and even at trade shows) turn out to be fakes, often they are just middle men working with different factories.

    Best is to go to the factory several times to find out if they are for real, one time is not enough. Show up without making an appointment in to find out what their real production environment looks like - it might look very different from what they show you if they have time to clean up and put in more people and/or machines.

    ReplyDelete
  2. Thanks Marc, glad to hear we took the right approach and that's a good tip to go and visit the factory a few times, once without making an appointment. I've heard a few stories from people of times when they've done that and seen a completely different set up to when they visited after making an appointment!

    ReplyDelete
  3. Hi Michael, just wondering what legal structure shoes of prey has for their operations in China and why you chose that particular structure? i.e. registered office or foreign entity
    thanks muchly :)

    ReplyDelete
  4. Hi Taryn, shoot me an email: michael@shoesofprey.com and I can explain if you like. Cheers.

    ReplyDelete
    Replies
    1. Hi Michael

      I have just come across your blog - great information! I am in a start up position where I am wanting to find a supplier. I've had similar experiences with Alibaba and am contemplating taking up your suggesting and heading over to China get things moving. But I'm at a loss as to how I locate suppliers when I am there. Can you tell me if there is anyone or system I can approach to point me in the right direction while in China?

      Thanks again!

      Lamson

      Delete
    2. Hi Lamson, best thing to do is find a trade fair related to the products you're planning to buy. Best thing to do is Google trade fairs in China for your product category.

      Delete