Every year, thousands of European businesses start importing from Asia for the first time. Many succeed — and significantly improve their margins. Many others make expensive mistakes that could have been avoided with better preparation.
This guide covers everything you need to know before placing your first order with an Asian manufacturer. It applies equally whether you're sourcing from China, Vietnam, South Korea, or India.
Why Source from Asia?
The answer is usually cost. Manufacturing costs across most of Asia — particularly China and Vietnam — are significantly lower than in Europe. For many product categories, the landed cost (including shipping and duties) of goods sourced from Asia is still 30–60% lower than European production.
But cost isn't the only reason. Asia also offers:
- Scale — manufacturers capable of producing tens of thousands of units in a single run
- Range — virtually every product category is manufactured somewhere in Asia
- Speed of production — many factories can turn around orders in 2–4 weeks
- Private label capability — most factories offer OEM/ODM services for branded products
Step 1: Define Your Requirements Precisely
Before you contact a single supplier, write a detailed specification document. This should include:
- Product name and category
- Technical specifications (dimensions, weight, materials, components)
- Required certifications (CE, RoHS, FCC, etc.)
- Target quantity per order
- Target price per unit (your maximum landed cost)
- Packaging requirements
- Delivery timeline
The more specific your requirements, the more accurate the quotes you receive — and the fewer misunderstandings during production.
A vague enquiry gets a vague quote. Be specific from the start and you'll save weeks of back-and-forth.
Step 2: Find Qualified Suppliers
There are several ways to find manufacturers in Asia:
- B2B platforms — Alibaba, Global Sources, and Made-in-China list millions of suppliers. They're a starting point, but require thorough vetting (more on that below).
- Trade fairs — Canton Fair (Guangzhou), Hong Kong Electronics Fair, and sector-specific trade shows are excellent for meeting manufacturers in person.
- Industry directories — some sectors maintain specific supplier directories with pre-vetted manufacturers.
- Sourcing agents — a professional sourcing agent like Royal Baltica has an existing network of verified suppliers and handles the legwork on your behalf.
Step 3: Vet Your Suppliers
Never place an order without vetting a supplier first. At a minimum, verify:
- Business registration — request a copy of their business licence and verify it independently
- Factory audit — either visit the factory yourself or hire a third-party audit service
- Certifications — ask for copies of any ISO, CE, or other certifications they claim to hold, and verify they are current
- Export history — ask for references from Western clients, or check their trade data on platforms like ImportGenius
- Samples — always request a physical sample before committing to a production order
Step 4: Negotiate Terms
Price is only one part of the negotiation. Equally important are:
- Payment terms — standard terms are 30% deposit upfront, 70% before shipment. For large orders, consider a letter of credit (L/C).
- Lead time — get the production timeline in writing, including start date and completion date
- Minimum order quantity (MOQ) — most factories have MOQs; negotiate these down for first orders where possible
- Incoterms — agree on who is responsible for shipping, insurance, and customs clearance (see below)
Step 5: Understand Incoterms
Incoterms (International Commercial Terms) define the responsibilities of buyer and seller in a transaction. The most common for Asia-Europe trade:
- EXW (Ex Works) — you collect from the factory. Maximum control, maximum responsibility.
- FOB (Free on Board) — supplier delivers to the port and loads onto the vessel. You pay freight and insurance from there.
- CIF (Cost, Insurance, Freight) — supplier pays freight and insurance to your destination port. You handle customs and inland delivery.
- DDP (Delivered Duty Paid) — supplier delivers to your door with all duties paid. Maximum convenience, but you lose control over logistics costs.
For first-time importers, FOB is generally recommended — it gives you control over the freight leg while keeping costs transparent.
Step 6: Arrange Quality Control
Never skip quality control on your first few orders with a new supplier. Options include:
- Pre-shipment inspection (PSI) — a third-party inspector visits the factory and checks finished goods before shipment. Typically costs $200–400 and takes 1–2 days.
- During production inspection (DPI) — inspector visits mid-production to catch issues early.
- Supplier self-certification — cheaper, but you rely entirely on the supplier's honesty. Only use this with established, trusted suppliers.
The cost of a failed quality inspection is a fraction of the cost of receiving a container of defective goods.
Step 7: Handle Customs and Import Duties
Importing goods into the EU requires customs clearance, correct HS code classification, and payment of import duties and VAT. Key points:
- Every product has an HS code — a standardised classification number that determines the applicable duty rate
- EU import duties vary by product and country of origin — typically 0–25%
- Import VAT is payable at the point of entry (this is reclaimable for VAT-registered businesses)
- You'll need a customs broker or freight forwarder to handle the documentation
- Ensure your supplier provides correct commercial invoices, packing lists, and bills of lading
Common Mistakes to Avoid
- Paying 100% upfront — never pay the full order value before shipment
- Skipping samples — always test the physical product before committing to production
- Ignoring compliance requirements — CE marking, product safety standards, and labelling requirements are legal obligations in the EU
- Choosing the cheapest supplier — the lowest price often means the lowest quality. Check references and audit factories
- Under-insuring shipments — always insure your cargo for full replacement value
When to Use a Sourcing Agent
A professional sourcing agent becomes worthwhile when:
- You don't have the time to research and vet suppliers yourself
- You're unfamiliar with the language, culture, or business norms
- You want someone on the ground in Asia to manage quality and logistics
- Your order volumes aren't large enough to justify setting up your own procurement team
Royal Baltica acts as your procurement desk in Asia — handling everything from sourcing to quality control to logistics coordination, transparently, with a clear margin structure.
Summary
Sourcing from Asia is one of the most effective ways to improve your margins — but it requires preparation, due diligence, and ongoing supplier management. The businesses that succeed are those that treat it as a professional procurement exercise, not a one-off transaction.
If you'd like to explore sourcing a specific product, send us your requirements and we'll come back with a proposal within 24 hours.