Sourcing Manufacturers

Hi antis,

Your thread subject was sourcing manufacturers. Please don't confuse them with wholesalers. Wholesalers buy from manufacturers, add a margin, then sell to you at a price that is usually a lot higher than what they paid.

You are quite right about the sourcing sites such as you mention. They list thousands of suppliers masquerading as manufacturers, but in reality they are wholesalers, traders, dropship suppliers and other middle men.

I teach how to buy small quantities (or large) direct from real manufacturers at genuine ex factory prices. The extra profit available by doing that is well worth the effort, but very few people know how to do it.

Some who do know are beating all their competitors on eBay and still making high profits. One such person on a recent thread said he/she was buying a product for $1, adding another $1 for packaging costs, and selling for $25.

I recommend just a handful of safe sites where you can be sure that the suppliers are what they say they are.

All of the manufacturers I have found have been online. It takes time to filter through them, but eventually I find what i'm looking for at a reasonable rate.

I first check out Google, then World Wide Brands, Then I ask around the forums as a last resort. Usually the first two will yield a great amount of results that will keep me busy and filtering for a while.

One last thing to mention is the Chinese wholesalers you can find on alibaba.com and other similar sites. I always ask for samples first -- some will send them to you for free, others charge a base rate. You can usually get much better deals from overseas, just make sure you calculate ALL costs before purchasing!

Of course Lisa recommends that you buy from that site, she is one of the sales people on the site. This site is listed on a number of sites including ones that have bad reviews online.

This site is typical of ones that I would steer clear of. Free email addresses and no business address are warning flags. So is the absence of an ICP number on the website.

If you want to buy anything in China I recommend using a safe sourcing site where you can locate genuine manufacturers. I don't recommend any of the popular sourcing sites because you will almost certainly be dealing with wholesalers or resellers and they will charge you a lot more than genuine manufacturers will.

Stay away from items you know is to good to be true like Apple products.
Next thing to do is to Google the sources personal information to see if anyone else has any experience dealing with them. Buy first in small quantity using PayPal and check them out.

What are you selling?

What I did was pick a niche that I'm interested in, then searched for small manufacturing businesses in the US (I'm in the US) that sell a good product that's not branded. I then marked that product up 50% from the original price (which includes shipping to my location). When I sell the product the buyer pays the 50% markup + shipping.

I researched about 10 businesses/products/prices/etc... before I settled on my current product supplier.

If you search for small manufactures instead of wholesalers you'll open the door to a bunch of untapped opportunities because everyone & their brother is doing what your doing, looking for wholesalers.

I ended up finding my supplier on ebay, they're based in Georgia (US). I don't sell on ebay, I have a less competitive traffic source.

I'm intentionally not selling branded products. It's like If I was selling kitchen chairs (example), most buyers don't care about branding, they just want a product that fills their needs.

Do market research first. Prove buyers exist.

Stay away from Alibaba and Aliexpress, there are too many scams on these sites. Sourcing a genius factory in China to place order from isn't easy. this is because mostly can't speak English would make the communication difficult. Most Chinese manufacturers don't bother with overseas buyers since they can sell millions of items in quantity quickly to local re-sellers than having the obstacle in communication with foreign buyers.

If you can find it, it probably isn't worth it. Everything is moving to trust, and there are so many fake products, look at the deal between eBay & LVMH. So where do you find them, well it depends on the industry, take fashion, it is completely behind the times and everything is word of mouth. It is the $1million question, basically a lot of hard work and bit by bit over years going to shows, etc.. We use a different method to bypass it but we have special circumstances which isn't applicable to most.

My favorite trick is to look at trade shows lists of vendors and start to email them about selling their products. Works like a charm every time

Good advice, the main problem we found were the exclusions - which in our case were 80-95% of what we were trying to do. We were speaking to a bridal shop and they are only allowed by the designers to sell within a 20mile or so radius. Not very helpful when you want to go international, they have all these distributor agreements and if you're sales are low, which invariably they will be as a startup and/or new distributor, you have zero leverage. So you have to spend 7-10yrs building the whole thing up bit by bit like a house of cards, and it is as fragile as one too. The secondary market is easier but the products are 9-12mths+ old so that causes another set of problems. Then your margins are so low these days and with increasing fraud that you need to sell 5-10 products for every fraud sale just to break even. Guess the problem we have is that we are used to dealing with 2:1 to 5:1 revenue:effort like the Medium size companies (Large enterprise works on 5:1 to 10:1 revenue:effort), haven't yet been able to bring ourselves to 1:1 revenue:effort that SMEs work on - not sure if that is a good thing or not - time will tell.

Best way I've found is trade shows. There are a lot for wholesale buyers you can register for, usually for free, and go see the products, talk to the manufacturers (or distributors - these shows usually have both) and find products from companies that often don't have websites.

Regardless of which sourcing platform you use, if you start in blind you will likely strike problems. This is why I don't disclose online which sourcing sites I recommend. People need to know something about safe sourcing practice before they even open up Google.

If I sent everyone to the sites that I regard as safe, I know that many of them, maybe even most of them, would make a mess of choosing suppliers, starting to communicate with them, negotiating with them, and organizing the import process.

I don't want to be the cause of people losing their shirts.

See my thread: If your secret B2B portals are so safe why don't you share? for reasons why I don't publish the sites online, but you will also find ther a lot of helpful information.



Exhibitors at trade shows are most often traders or wholesalers, although they will usually say they are manufacturers. It is the same as the situation on the big B2B sites, where thousands of traders masquerade as manufacturers.

There will be some genuine manufacturers there, but it is not easy to be sure which is which. If you buy from wholesalers you will pay more. See my posts #2 and #4 above.

Walter Hay.