Summary of this article：One of the most attractive but most challenging sourcing platforms for international buyers, 1688.com, which can be referred to as "the domestic version of Alibaba" that carries factory direct price with countless numbers of suppliers.
What Is 1688.com?
The dominant Chinese business to business wholesale online market, a platform operated by the Alibaba Group that connects Chinese manufacturers, factories, wholesalers and domestic business customers within China. Compared to Alibaba.com which is aimed at the international market, 1688.com targets China wholesale buyers, so listed price is a bit cheaper. Nevertheless, lower listed price does not mean it will result in lower cost taking into all aspects into consideration including agent fee, inspection, freight, custom duties etc.
Why International Buyers Use 1688?
To source at factory direct price, select from local suppliers, variety in available products, compare prices and find deals, and obtain emerging China trends. Often products sold at Alibaba.com and AliExpress source their supplier from the platform as well.
Difference Between 1688 and Alibaba:
Alibaba is more of beginner level platform and 1688 has better price discovery but needs sourcing skills.
Main Problems of International Buyers
Most Chinese speaking site, many suppliers does not support foreign payment methods, suppliers generally only deliver to mainland China and an agent will be needed, supplier does not have exporting experience (product labeling and packing will require more consideration, certificates) and prices can be low volume or low quality;
International Sourcing Steps
1. Preparation of requirements - draft the brief including specification, pictures, packing details, quantities etc.
2. Search using Chinese keywords - search in Chinese will return better results than English, it's also possible to search by images.
3. Compare 5-10 suppliers - evaluate their price, MOQ, store activities, specialty, reputation.
4. Communicate with suppliers before order placement - inquire availability, specification, correctness of price, and customization ability.
5. Order samples from 2-3 suppliers - quality rather than photo is to be evaluated.
6. Check supplier - register business, analyze their specialties and their company types (factory or trading company).
7. Pre-shipment inspection in China warehouse - verify the quantity, quality, packing, and identify defects.
8. Landed Cost calculation - determine if there's profit to be made upon the product.
How to Choose Suppliers?
Product specialization, clear store history, consistent product photos, prompt replies, specificity in details, acceptance of samples and inspection; Good supplier has specific answer to every question whereas suspicious suppliers tend to get the transaction completed fast without being specific.
Total Real Cost Calculation
Product price is not the only factor. The landed cost of products comprises of: product cost, local shipping, sample costs, buying/sourcing agent fees, inspection costs, repacking/labeling, warehouse costs, international shipping costs, duties/taxes, allowance for defect rate, etc. Although product price is $2, after deducting all costs it could end up being $4-5 per unit.
Payment and Shipping Terms
Mainly by Chinese Yuan for domestic trade in China and most overseas buyer will need to rely on a buying or sourcing agent; The products must be sent to China and checked, packed together and shipped overseas from China by sea/air/rail/DDP etc.
Common Mistakes to Avoid
Choosing the cheapest offer without inspecting its specifications
If every supplier selling on 1688 is a factor
Not placing samples before larger quantities order
Not performing pre-shipment inspection
Neglecting inland logistics cost in China
Sourcing restricted goods
Ordering in large quantity without having samples first.
Buying Agent/Sourcing Agent Use case
Use buying agent for payment processing, China warehouse receiving and consolidating, and shipping arrangement.
Use sourcing agent for full range of services including supplier research, negotiation, factory audit, sample checking and analysis, quality control and shipment arrangement. You may need a sourcing agent if you don't speak Chinese, or source from various suppliers or for Amazon FBA/online re-sell.
Suitability for Your Business Needs
Right choice if: You want to buy wholesale goods at lower prices; You can manage your supplier or use an agent well; you need samples or small quantities order; You have ability to take charge of inspection and logistics.
Wrong choice if: You want the supplier to handle shipping overseas and have direct conversation in English; You want buyer protection as of international business; you seek for simplicity in ordering.
Conclusion
For an online business, wholesalers or private label importers, 1688.com can be a great help if it's managed appropriately and systematically.
