Yiwu market is the world largest wholesale market for small commodities. Cheap price made it famous but crap quality made it notorious in the past.
How to buy from this “huge” Yiwu market is a challenge for many of its visitors.
Here is one example: G from Singapore, who represents a large company and plans to source some products from Yiwu. Before she came, she thought that Yiwu market is something like a fair or trade exhibition. She can easily import directly by speaking to the sellers there.
She was greatly disappointed to found out that 95% of the people in the market are not ready to export directly. They don't have export licenses, don't know anything about FOB price, and most of them even don’t speak English!
Factories (or sheer agents) have their shops/showrooms set up inside the market. They sell the products they produce/ represent.
Usually two people are working inside the shops. One is “boss”, the other is “assistant”. In most cases, the “boss” is the factory owner’s wife, daughter, or close relatives, someone the factory owner can completely trust. The “assistant” is usually a girl they employed, who can speak some English and know how to use a computer.
“Boss” usually don’t speak any English and knows little about foreign trade. Their job is to keep everything under control. To keep the overall cost down, the “shop assistant” is usually high school graduates or college graduates. They don’t have much knowledge about foreign trade either.
So the shops here just put whatever available inside, and sell. That’s it. They are happy with this. To export directly to overseas buyers is not something they’re happy to do, or able to do. So here comes the question:
In most cases, you have to use an agent to assist you with all the sourcing activities. They can arrange your visit, accompany you to the market to browse, then collect orders, do inspection, and finally ship out your products.
Of course, agents will usually charge a commission from 3% - 10% of your total purchase value, according what you buy and how much you buy. You may also find some agents claim that they only charge a 1% commission and provide dozens of FREE service. Sounds like miracles.
As someone “inside” this industry, I know fairly enough that for all agents, 1% commission is even not enough to survive. If you find someone did “kept their promises” and offered you a 1% commission. They must have some “clever” ways to make money.
*The good things about using an agent:
Obvious enough, an agent can make things much easier for you. Sourcing from Yiwu without an agent is nearly a “Mission Impossible”. You have no warehouse to collect your orders, no title to ship out your containers, and no one do inspection.
And agents can also help you get cheaper prices sometimes because they have connections with suppliers. They buy a lot from suppliers and suppliers are also willing to offer a discount because agents help them sell.
*The bad things about using an agent:
This only comes when you stay with a “bad” agent. You may find that almost every agent's site promises MIRACLES. In fact, the reality is quite different. Most agents are inexperienced, incapable, have no connections, have no warehouses, tell lies, make mistakes, create additional costs, waste time, and choose slow cheap container lines....
(I’ll try to write another article about how to select a good agent according to my humble experiences later.)
Personally, I would recommend each buyer come to Yiwu for a visit to see things by themselves first. Then go with an agent to confirm order details.
Firstly, buyers know their market far better than their agents. They can select the right products at a right price. If they stay with an agent, there can be lots of mis-communications and time waste.
Buyers can also discover new opportunities. Agents just don’t have the buyer’s eyes. And I don’t think agents can show all the opportunities of this huge market, just by emails, phones talks and live chat.
Secondly, buyers can know the fact at some extent. They can excess to information like price (without going with any agents to translate). They can explain exactly what they want and show the agents/factories how to do in the future. They can also make quicker decisions.
Thirdly, information online or you get from somewhere else usually turn to be junks. You spend lots of time and energy, but without any positive results in the end.
Do you have a question / story about Yiwu market? Ask / Share today!
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May.30: Duanwu holiday; Market opens, stores 50% close/half-close. Visiting not suggested.