How to start a business with China – 5 easy steps
In the Chinese market there are many goods with good quality, but no one excludes the possibility that you can stumble upon scams. To avoid this unpleasant event, you should follow a few simple steps for a business with one of the leading links in the global economy.
Choosing a business model with China
There are several business models:
- Dropshipping. The essence of this model is that the organization of a business goes without investment. Those. money is taken from the client for the goods, an application is sent to the manufacturer in China, which, in turn, sends the goods to the client. In fact, the business is organized through mediation between the end customer and the supplier.
- Wholesale sale. The scheme of work is similar to dropshipping. The difference is that the goal is to find a buyer with an established business, conclude an agreement on the provision of services, take an advance payment and arrange the delivery of goods. As a result of the transaction, the intermediary receives his dividends for mediation.
- Organization of an online store. This business model can be started by creating a group in social networks, if there are additional funds, then the site can be launched. Although now the creation of the site is not an urgent need. After analyzing the product market, making interesting offers for potential buyers, you can begin to implement a pre-compiled business plan.
- Joint purchases. Now the aforementioned business model is gaining momentum in connection with an increase in the state duty for imported goods. By following this business model, you can save on shipping and wholesale purchases.
Initial capital. If you don’t have the initial investment, then it will be true to start a business with dropshipping. No investments, but to think over a business plan is important for any business model. If you have certain finances, you can immediately try to fly up to the podium of heavyweights, and organize an online store by purchasing goods with personal money.
Niche selection. There are many product niches, but it is better to start with one that is in demand. But you should not choose a competitive product either. The golden mean is the perfect solution.
Choosing a Chinese partner. On the Internet, you can find many sites of Chinese goods, it is best to start with proven, for example, Aliexpress or Alibaba.
Settlement with the supplier. The final step will be settlement with the supplier, but you need to make sure that it is reliable. If you plan to carry out major transactions, you need to register as a legal entity and open a bank account. What form to choose when registering – IP or LLC, you need to proceed what goals the entrepreneur pursues and what advantages he wants to have.
Working with Chinese partners will give the entrepreneur significant advantages:
- High profitability in comparison with Russian suppliers. If working with a Russian supplier, the entrepreneur’s wrap is an average of 20-50%, then working with Chinese partners, the profitability can range from 100 to 1000%.
- Assortment. The Chinese market boasts its diversity and assortment of decent quality.
- Competition. It seems, why would suddenly “competition” become a plus. It is a plus for the entrepreneur, since it is in the Chinese market that there is high competition and due to dumping, each supplier tries to stay afloat.
- Proven algorithm. No need to reinvent the wheel. All have long been invented, just select the appropriate scheme for working with Chinese partners.
Having worked through each described step, you can gain a foothold in the market and develop a business with mathematical progression. China is a leader in every sense of the word, so a well-organized process and the selection of a reliable supplier will help organize a business from scratch.