Written by Marijn Overvest | Reviewed by Sjoed Goedhart | Fact Checked by Ruud Emonds | Our editorial policy
China Sourcing— 7-Step Process Explained
How to source products from China?
- China sourcing is the act of searching for a supplier in China to acquire goods or services.
- While China offers cost advantages, language barriers, and business practices can be challenging. Hiring skilled sourcing agents can be the solution.
- To source products from China, thoroughly research and verify suppliers, negotiate favorable terms, and coordinate efficient logistics and customs procedures.
Procurement Process for Sourcing from China
The procurement process from China is crucial for companies looking to import goods safely and cost-effectively. In addition to thorough supplier verification, it is important to comply with legal regulations, ensure product quality, and arrange timely delivery. Successfully carrying out this process helps reduce risks, increase efficiency, and achieve competitive prices on the global market.
Below are the 7 steps that make up the key phases of this process.
Step 1 – Procurement Methodology for Sourcing from China
A structured procurement methodology is essential for organizations sourcing goods from China to ensure transparency, efficiency, and alignment with both local regulations and international standards.
Before detailing the methodology, it is important to distinguish between a procurement strategy and a procurement policy. A strategy focuses on specific objectives such as cost efficiency, ethical sourcing, or supplier diversity, while a policy defines overarching guidelines ensuring compliance with legal, donor, and other stakeholder requirements.
The first step in procurement is defining clear requirements—identifying the necessary goods or services, quality standards, budget constraints, and sustainability considerations. This alignment is crucial to ensure that all stakeholders understand the organization’s operational needs and goals for sourcing from China.
Once objectives are established, approval from leadership and key stakeholders is crucial to confirm budget alignment and facilitate smooth execution. A dedicated procurement team should then conduct a needs assessment, perform supplier evaluations, and carry out targeted market research in China. This process enables informed and responsible purchasing decisions, reducing risk and maximizing value.
Recommended Course for Sourcing Methodology
 |
Junior Procurement Management Course This course covers the fundamentals of procurement for non-profit organizations, including how to establish a structured and transparent sourcing methodology to optimize resources and align with the organization’s mission. |
 |
This course helps in developing a sustainable and mission-driven procurement strategy for non-profit organizations, ensuring cost efficiency, transparency, and long-term supplier partnerships. |
Step 2 – Market Research for Procurement from China
Market research is a crucial step in the procurement process for organizations sourcing goods from China. It helps identify reliable suppliers and cost-effective solutions while taking into account specific market factors and potential supply chain challenges. Before placing orders, procurement teams should assess existing supplier relationships, shipping timelines, budget feasibility, and potential alternatives in case of disruptions.
Key considerations include:
- Does the organization have a reliable Chinese supplier for the required goods or services?
- Are there alternative suppliers in China if the primary one becomes unavailable?
- Is the budget sufficient to cover product costs, shipping, and any additional fees?
- Are there any known or potential market shortages in China, and how might these affect costs and delivery timelines?
- Are there alternative sources if the preferred Chinese supplier cannot meet requirements?
During this phase, procurement specialists evaluate supplier reliability, product pricing, quality standards, and ethical sourcing practices. These insights guide informed decision-making, ensuring alignment with organizational goals and efficient use of resources.
Recommended Course for Market Research
 |
Risk Management in Procurement Course This course will teach you how to identify and manage procurement risks in non-profit organizations, including shortages, supplier reliability issues, and price fluctuations, ensuring sustainable and cost-effective sourcing. |
 |
Mini-MBA For Procurement Managers This course equips non-profit procurement managers with market research techniques, financial analysis, and supplier evaluation skills to ensure effective, transparent, and mission-driven procurement. |
Step 3 – Request for Information (RFI) from China
The Request for Information (RFI) is an essential step for organizations sourcing goods from China. It ensures transparency, cost efficiency, and adherence to both internal policies and international regulations. Gathering comprehensive data from potential Chinese suppliers before finalizing a purchase is crucial for aligning the procurement process with the organization’s objectives and budget constraints.
Key considerations include:
- What goods or services are required from China? (e.g., manufactured parts, electronics, textiles)
- What quantities and procurement frequency are needed? (one-time vs. recurring orders)
- What budget is allocated, including costs for shipping and potential customs fees?
- Are there reliable Chinese suppliers already in the network, or should new vendors be considered?
- Do potential suppliers meet quality, ethical, and sustainability standards?
After this data is gathered, an RFI is issued to suppliers in China to compare pricing, availability, and compliance with the organization’s procurement policies. Insights gained from this step inform budget approvals and negotiations for transparent, cost-effective supplier agreements that support the organization’s goals.
Recommended Course for Request For Information (RFI)
 |
ChatGPT & AI in Procurement Course This course explains how AI can automate and streamline the RFI process in non-profit procurement, making it easier to analyze supplier responses efficiently and enhance decision-making. |
 |
This course teaches how to use data-driven approaches in non-profit procurement to evaluate supplier responses and select the most cost-effective and mission-aligned sourcing options. |
Step 4 – Request for Quotation (RFQ) for Sourcing from China
The Request for Quotation (RFQ) is a critical stage in the procurement process for organizations sourcing from China. It ensures cost-effectiveness, transparency, and adherence to budget constraints. At this point, procurement teams formally request pricing and supply details from Chinese vendors to secure the best terms while maintaining quality and compliance with relevant regulations.
To create a thorough RFQ, procurement teams should gather the following details from suppliers:
- Availability of requested goods or services and storage capacity.
- Location of manufacturing or sourcing within China and projected distribution timelines.
- Estimated delivery times, including considerations for international shipping and customs clearance.
- Unit pricing, potential bulk discounts, and negotiation flexibility.
- Possible market shortages or seasonal variations in China that could affect procurement timelines.
- Minimum order quantities (MOQs) and adaptability for smaller orders
- Payment terms and credit options for organizations sourcing internationally.
Once supplier responses are received, procurement specialists analyze quotations, comparing prices, delivery conditions, and overall value. This phase ensures that organizations secure the best possible terms, maximizing the impact of allocated resources while maintaining ethical and sustainable sourcing practices.
Recommended Course for Request For Quotation (RFQ)
 |
This course covers how to review supplier terms and draft pricing agreements, essential for creating RFQs in non-profit procurement, ensuring cost transparency and compliance. |
|
This course will help you compare supplier quotes, analyze bulk discounts, and optimize sourcing costs to ensure efficient and cost-effective procurement for non-profit organizations. |
Step 5 – Negotiation Phase for Sourcing from China
The negotiation phase is a critical step for organizations sourcing from China, ensuring cost-effective purchasing while maintaining product quality and compliance with both local and international regulations. Beyond simply discussing price, negotiations should address aspects such as bulk discounts, flexible payment terms, shipping arrangements, and the potential for long-term partnerships.
Procurement teams must confirm that suppliers can meet quality and regulatory requirements while honoring delivery commitments. Well-prepared negotiations, supported by market research and RFQ data, help secure optimal value, make the most of budgets, and build trustworthy supplier relationships that align with organizational objectives.
Recommended Course for Negotiation Phase
 |
Negotiation Course for Procurement Professionals This course provides essential negotiation techniques for non-profit procurement, helping secure the best pricing, quality, and payment terms while ensuring transparency and alignment with the organization’s mission. |
 |
Cultural Impact on Negotiations Course This course is essential for non-profit procurement professionals working with international suppliers. You will learn how cultural differences impact procurement negotiations and how to navigate them effectively. |
Step 6 – Contracting Phase for Sourcing from China
During the contracting phase, organizations formalize agreements with Chinese suppliers to ensure transparency and accountability. These contracts should clearly define pricing, shipping schedules, quality standards, and payment terms—whether upfront, in installments, or post-delivery.
To prevent disputes, contracts must outline quality control measures and specify penalties for delays or non-compliance. Proper contract management—whether digital or manual—helps organizations track procurement history and maintain strong, efficient supplier relationships.
Recommended Course for Contracting Phase
|
This course provides a detailed approach to drafting, reviewing, and managing procurement contracts in non-profit organizations, ensuring transparent and efficient supplier agreements. |
|
Risk Management in Procurement Course This course will teach you how to mitigate risks in non-profit procurement, including contract failures, delayed deliveries, and compliance issues, ensuring transparency and operational efficiency. |
Step 7 – Supplier Relationship Management (SRM) for Sourcing from China
The final step in the procurement process is Supplier Relationship Management (SRM), ensuring long-term reliability and adaptability when working with Chinese suppliers. By maintaining strong connections with both primary and backup suppliers, organizations can better manage risks related to supply disruptions, market fluctuations, and potential regulatory changes.
Ongoing collaboration, regular communication, performance evaluations, and clear feedback channels enable suppliers to meet expectations in quality, delivery, and pricing. Establishing partnerships based on mutual trust—rather than purely transactional arrangements—often leads to more favorable pricing, priority service, and stable, long-term procurement that aligns with organizational objectives.
Recommended Course for Supplier Relationship Management (SRM)
 |
Soft Skills for Procurement Course This course will help you develop communication skills for resolving supplier issues, negotiating contract renewals, and maintaining effective collaboration in non-profit procurement. |
 |
Strategic Procurement Leadership Program This course will help you develop long-term supplier strategies and optimize sourcing relationships to ensure efficient and transparent procurement for non-profit organizations. |
Should you usea Sourcing Agent?
When you start to buy in China, the first thing that will come into your mind is, “Can I manage this myself?”
Of course, it is valid to be scared of sourcing in China as you do not have any idea how to start. But do not worry, we are here for you!
The table below are the advantages and disadvantages that can help you decide if you want to employ a sourcing agent from China:
Reasons Why You Should Consider Sourcing in China
Discover how and why sourcing in China is a strategic game-changer, offering high-quality products that defy misconceptions, a plethora of supplier options for optimal value, and the cost-effective allure of a labor-rich market.
1. High-quality of products
There is a myth about Chinese products being fragile enough that it does not last for a long time. This is the reason why many people think that Chinese products are not of good quality.
However, this is far from the truth. Many professionals have already found different suppliers in China that offer high-quality products. The suppliers will deliver the expected quality of materials to the organization at a reasonable price.
2. Wide supplier options
China is known for its wide array of factories and industries working in numerous different cities. It is one of the largest countries that have many manufacturers.
Due to this, you can choose from different suppliers that will give you the best value for your money. The same is true that you can select from different manufacturers if you are going to get your product manufactured.
3. Labor costs are low
Labor costs are one of the factors that determine the selling price of a product. As China has the biggest population in the world, it is common to find labor at a low cost.
When you source in China, you can find skilled laborers at low prices. Even if you are away, you do not have to worry about the money you have spent. The sourcing agent or agency that you employed will take care of everything for you.
Tips When Sourcingin China
To utilize and get the best of sourcing in China, ensuring the utmost benefits of it, here are some tips to be taken note of:
1. Look for the right suppliers
In every sourcing process, you must first find the right supplier. You need to look for the right suppliers who understand all your needs and requirements.
There is no good or bad supplier, it all comes down to your decision of which supplier is suitable for you.
2. Verify the Supplier
The last thing that an organization would like to incur is procurement fraud when finding suppliers. To avoid this, you must verify suppliers and the organization must ask for its credentials to check their reliability.
In addition, the organization must take note of the supplier’s experience in the manufacturing of products. The organization must look if the supplier can offer the proper range of products.
The organization can also ask the previous clients of the supplier to verify if it has done well with its responsibility.
3. Ask for Samples
Before the organization places its order, it must first ask for a sample of products. The samples that you will check will enable you to decide if you will order or not. The samples will tell you if it suits the quality and requirement that you expect.
4. Communicate always with your supplier
When sourcing in China, The organization must consider that there are language and cultural barriers to overcome. Even if the supplier can provide English-speaking customer services, many issues can be traced down due to communication errors.
Of course, communication errors are unintentional. However, the organization must take note of this to avoid delays and costly mistakes.
5. Quality control inspections
Even if you already have an agreement with the supplier, you must not be complacent. You will always need to conduct quality inspections to ensure that it meets your expectations.
Mistakes to AvoidWhen Sourcing in China
Being blinded by the benefits of sourcing in China is risky. To ensure that you get what you’re looking for, it’s vital to avoid these mistakes:
1. Failure to develop a good sourcing strategy
A good sourcing strategy is important when sourcing from China. Being able to know all the transactions will lessen the risk of delays and overspending.
Therefore, it is important to build defined goals and requirements for every transaction.
2. Not ordering product samples
We often hear that action speaks louder than words. The same is true that the organization should not believe that everything that they will deliver is perfect.
This allows the manufacturers to familiarize themselves with the requirements of the organization.
3. Focus only on pricing
Price should not always be the factor when sourcing in China. The emphasis on costs can take away the focus on building the products of the organization.
Of course, low-balling suppliers are not good if you intend to have a good relationship with the buyer. You must take into consideration that the low price should not affect the quality of the materials.
At the end of the day, the organization must remember that if the price is too good to be true, then it is.
4. Not hiring a sourcing agent
It is okay not to hire sourcing agents if you are familiar with how to source your materials in China. However, if you do not know where to start, then it is a must to hire one.
You should not try sourcing in China just because you think you can. You should know that it takes a level of experience and skills to successfully transact in China.
Conclusion
China Sourcing sheds light on the significance of Chinese product sourcing in the realm of procurement. China’s status as the world’s leading manufacturer, often referred to as the “world’s factory,” makes it a compelling choice for businesses aiming to acquire goods at competitive prices. The article also explored the concept of China sourcing, providing insights into its advantages, challenges, and the crucial decision of whether to use a sourcing agent. Readers are equipped with valuable tips on selecting the right suppliers, verifying credentials, and navigating potential pitfalls in the sourcing process.
This not only demystifies common misconceptions about Chinese product quality but also emphasizes the diverse supplier options, low labor costs, and the role of sourcing agents in facilitating successful transactions. By offering practical tips and highlighting mistakes to avoid, this empowers navigation of the complexities of China sourcing, fostering informed decision-making and successful business partnerships.
I have created a free-to-download editable culture and negotiations — Asia template. It’s a PowerPoint file that can help with your sourcing approach in Asian countries like China. I even made a video where I’ll explain how you can use this template.
Frequentlyasked questions
What is China Sourcing?
China sourcing refers to the act of searching for a supplier in China to acquire goods or services.
Why do professionals source in China?
People source in China due to the low costs of materials and labor. Additionally, professionals source in china due to multiple suppliers available.
What entities can help me source in China?
The entities that can help you in sourcing in China are the sourcing agencies and agents.
About the author
My name is Marijn Overvest, I’m the founder of Procurement Tactics. I have a deep passion for procurement, and I’ve upskilled over 200 procurement teams from all over the world. When I’m not working, I love running and cycling.
