Are you looking to source from China in an extremely easy way? A lot of people will give you suggestion of attending different fairs that take place around China at different times (for example Canton fair). But I say you do not want that hustle!

I suggest you go to a place that works pretty much all year round and that has millions of products to choose from. That magical land is called Yiwu Market. In the following article you will learn all the basics about the market, how can it be advantageous to you and simply how to get there to start your successful product sourcing from China.

Part 1 An Overview of The Market

1.1 What is Yiwu Market?

Yiwu Market is something extraordinary that was first historically mentioned in the 1600s. But that is going a bit too far for our needs. The market “scene” consists out of 3 major complexes:

  • Yiwu International Trade City: or otherwise known as Futian market. It covers an area of over 4 million square meters (43,055,641.67 square feet) and hosts 62,000 booths with over 100,000+ vendors who are trying to sell millions of products. It includes five districts/complexes that all specialise in different categories of products that are related to everyday common goods as well as home textiles and other home related products.

Hint: Keep on reading because all the details on product categories will be given to you later in this post.

  • Huangyuan market: it is a new addition to the world of trade in Yiwu. It covers an area of 420,000 square meters and has 5,000 booths. It focuses on garments of different types.
  • Binwang market: the market ceased to exit (April 11th, 2011) and was moved into District 5 of Yiwu International Mart. It originally consisted of 5 districts that had 9,000 booths that sold home textiles.

What are those markets these days?  The largest commodity wholesale markets in the world according to some prominent organisations like the UN, World Bank and Morgan Stanley (Belguidoum & Pliez, 2015). Basically, it is like Disneyland for people and companies, who want to source products from China, see those products first hand and come for a visit at any time (except Chinese national holidays).

So let us talk specifics. The following information applies to all the markets that were mentioned above and will be addressed together as Yiwu market. The important thing to understand is who are the vendors, and where are the production facilities located? This marketplace is a gathering of a large number of manufacturers, agents and trading companies. They each can rent a booth for a certain period (or as long as they want and can pay) and fill up this booth with products that they are trying to sell. Whatever you will see in the marketplace are samples. If you want to see the factory it is most probably located outside of Yiwu, if not thousands of kilometres away. For example, most of the consumer electronics manufacturers are located in the South of China, the city of Shenzhen.

1.2 Where is the market?

Yiwu market is located in the city of Yiwu, Zhejiang province, China. In general, one has to note that transportation in China is developed on a good scale, especially when that transportation is “delivering” 500,000 buyers on a yearly basis to an all year round wholesale commodity market.

Yiwu is strategically located hours away from several sea ports (Shanghai, Ningbo) which if you order let’s say a 20GP container that has to go by sea, will come in very handy. The city has its own airport, so if your shipment is smaller (e.g. for your Amazon business), the delivery can still be easily arranged.

1.3 How to get to there?

When you decided to venture out into China and visit the market, I suggest you look into international flights to Shanghai, Hangzhou or Ningbo. From there you will need to whether take another flight, high-speed train, bus or car to the city of Yiwu. Hotels are abundant in the city and can suit every taste. Some are even located next to a premium golf course.

Part 2 Purchasing in Yiwu

2.1 Who are the sellers?

As I have mentioned above, there are several types of vendors that you can face in Yiwu market. Those are the direct Yiwu trading companies, manufacturers and agents (individual businesses).

It is very hard to determine who are you communicating with because all the agents and trading companies will claim to be manufacturers. They claim to be as such because they have the belief that most of the buyers prefer to deal directly with the manufacturers. And some really do because if you have an order that “matches” factories MOQ, then you are better off sourcing directly from the factory, that way you will get a lower price without any agent fee and will have less trouble visiting the production line if you want. Agents and sourcing companies are not in the habit of showing where they produce products for you based on the fear that the buyer will buy directly from the factory in the future.

In reality, you can buy from any of them as long as the terms they offer satisfy you. Just remember before signing any contracts make sure you properly “research” your potential partner. That research would include the following, which you can do when you are back in your hotel room in Yiwu:

  • Use Google and Bing in order to find information regarding the company. Type in the name in English in the search bar;
  • Check their status on Alibaba (if they are there);
  • Check forums for buyers where people share experiences relating to sourcing (search terms to use can be “factory name + scam” or “factory name + bad supplier”);
  • When in the booth, look through different types of products (not only the ones that you are truly interested in). Those other products might have different brand names on them which can be indicators for what other brands does your potential supplier produce for, which in turn can give you more confidence when placing an order.

2.2 What products can you source?

The variety of products is humongous. Your product line can be as standard or as unorthodox as you want. You can find categories being crossed here and there between the markets, but that also allows you for a wider choice of potential products to source and more competitive prices. Here is a list for you of what is sold where.

Yiwu International Trade City (Futian market) includes five districts:

  • District 1: artificial flowers, toys, flower accessories, hair ornaments, jewellery & ornament, ornament accessories, frames, ceramics & crystal, festival crafts, decorative crafts.
  • District 2: rainwear, suitcases & bags, umbrellas, electrical products, hardware & tools, locks, kitchen & sanitary ware, small home appliances, telecommunications, electronic appliances & photographic equipment, batteries & lamps, flashlights, clocks & watches.
  • District 3 & 4: daily necessities knitted & cotton articles (such as underwear, scarves, gloves, hats and cotton fabrics), footwear, belts, neckties, towels, wool items, lace items and other textile products.
  • District 5:  imported commodities (including an African imports emporium), bedding, and textiles, knitting materials, auto products and assorted accessories.

Huangyuan market:

It has a specific clothing focus for your sourcing needs:  jeans, men’s clothing, women’s clothing, sportswear, woollen sweaters, children’s clothing.

If you are working in a very specific industry like coal or mining or oil and gas, then the market is not for you. Purchasing some small machinery still might be possible but almost unachievable there. If however, you are looking for commodities that are more common (and there are millions of those), Yiwu market is a must visit.

2.3 Quality of products at Yiwu market.

The quality of the products at the market depends on the supplier you are dealing with. If you have a supplier with whom all the details of your future products were discussed, all the potential changes noted, and quality issues addressed then you have nothing to worry about.

A lot of buyers will purchase ready-made products at the market, let us say 300-500 pcs. They will have factory packaging, no customization, but they will most probably get a lower price. It might be excess stock from other buyers, or it might be rejected damaged goods by yet another buyer. Here is where quality issues might come in. In this case, make sure to check the stock before it is shipped. Do a quality control yourself.

How many pcs should you check? It all depends on your item and how many pcs are you trying to source. My general rule is to check 3% of your total order, meaning if you ordered 500 pcs you need to randomly check 15 pcs. If you find a lot of defects, then you need to continue and check further.

Part 3 Yiwu market: pros & cons

3.1 Perspectives for small and large businesses.

In general businesses and big chains always get a better deal. Think for yourself, would you rather deal with a client who buys product x for USD 10/pcs and the total order is USD 50,000? Or would you prefer to help out a business that buys the same product but only 500 pcs and of course at a more high price, let us say USD 12/pcs. Meaning total value of the 2nd order is USD 6,000.

The answer is simple for the Chinese suppliers; they will take both orders! And if they have enough resources you will end up with a good quality product. Unfortunately, that is not always the case, buyers of smaller quantities are often neglected.  Larger businesses have more bargaining power at the Market than the smaller ones.

3.2 Shipping your product.

As was mentioned above, Yiwu is located next to several ports like Shanghai and Ningbo. Additionally, the high-speed railway and air transportation are very developed. Some suppliers have a warehouse in and around Yiwu. You can directly check the products you purchased (if they have it in stock) and have them shipped in a matter of days and sometimes hours.

If you placed an order, but it first needs to be produced 3,000 km away from Yiwu all the shipments can also be easily arranged. As the saying goes “cash is king”, so anything can be arranged for as long as you pay.

3.3 How to communicate with the sellers?

The first thing you need to remember is that the person you are talking to in the booth can be just a middle man placed there to answer the basic questions and identify if you have a genuine interest in purchasing the product. So when things start to get more serious, they usually pull their phones out and start calling the real negotiator.

Second, if you speak English try to see what level of English does the seller possess and adjust accordingly (speak slower, use simpler words, etc.). Sometimes when the sellers don’t understand what you are saying they will just say “no, no, no” wave their hands and walk away. Yeap, a lot of them lose sales like this because they are afraid to lose face, something that is deeply embedded in Chinese culture.

Be respectful but also do not be afraid to push this is a marketplace after all. Do not use any culturally offensive words if you were somewhat offended by the Chinese suppliers. Please be aware not to call Chinese suppliers liars (that is if you still want to remedy the situation and cooperate with them in the future) it really pushes them over the edge and might provoke not only verbal but physical violence.

Conclusion

Yiwu market can be an adventure of a lifetime for your business. Instead of spending a countless month over the Internet trying to source 2-3 products you can go to China for a week, visit the market and can be set with ten new products for the upcoming year.

With its large variety of products, thousands of competitive sellers you might be able to get low good prices for low MOQ’s meaning great advantages for your business.

I hope to help further you achieve more success in your business through writing more helpful posts. For me to do that I need to see what does the audience want and need. So please like this post, share it and comment. All your input is very much appreciated!

Kevin Lee

Kevin Lee is the Co-founder of Asianconn. He writes about global sourcing trends and advise on Asianconn Blog. Kevin lives in Hong Kong and Nanjing, China since 2003. For further questions, you can contact him on Twitter and Linkedin.

This Post Has 5 Comments
  1. Thank you for that 3% rule – I thought checking 1 or 2% at most would be ok but it seems not. I want to visit this market this year but I’m trying to familiarize myself with it and with what needs to be done when buying from Yiwu. I don’t think I’ll buy more than 300 pieces of anything so I will need to check around 10 of them to make sure things are in order. But how many defects are too much? I mean, when do you decide it’s just too many of them and abort the whole thing?

  2. “Larger businesses have more bargaining power” – why am I not surprised to hear this? Would it be better to find a few other people that want to buy the same products or from the same seller and form an alliance so that we have a better chance of negotiating a cheaper price? Instead of asking for 300 pcs, we could ask for 1500 pcs which should bring the price down.

  3. Well no one likes to be called a liar but I didn’t know Chinese sellers can get physical because of this. I guess it’s mostly because there may be a lack of communication between someone that speaks Chinese and someone that doesn’t or just knows a few words. That’s why you need a translator with you; it should avoid any misunderstandings. I would never go into a market such as Yiwu without someone that speaks the language well and can help me communicate with sellers and make sure I don’t say something stupid.

  4. Great post as always, Kevin! I didn’t know about this huge market but I’m now very keen of visiting it and maybe find some good manufacturers here. The problem is how do I make sure I am talking to someone in charge? How do I know he’s not the middle man? I know you’ve offered a few ways to check but that doesn’t seem enough especially when you can’t really find much online on the company you’re searching for.

  5. WOW! This sounds like such a huge place! I think you need at least a 7 days to visit everything and get to see every smaller market within it. I can’t wait to go there but Chinese is not my forte so I should find someone who can speak it well.

Leave a Reply

Your email address will not be published. Required fields are marked *