A few days ago, I had the chance to catch up with an old friend I hadn’t seen in years. We met up in Brooklyn since we both happened to be in town for separate business trips—him from the West Coast, me from DC.
We’ve kept in touch over the years, mostly through email, but our exchanges have always been focused on work. Rarely did we dive into anything personal.
This time, though, I made it a point to change that. I did my best to steer the conversation away from business and made sure we focused on life updates instead.
We ended up talking about all sorts of things—our families, our latest vacations, and just about everything in between. One story he shared really stood out. It was about his housekeepers and something hilariously unexpected.
He told me that one evening, he came home to the sound of uncontrollable laughter coming from their room. Curious, he decided to check what was going on. Apparently, one of them had ordered a pair of sneakers online from a suspicious Chinese website known for selling knockoff goods.
The shoes arrived looking fine—except for one glaring detail. The brand name, which was supposed to say “Nike,” was instead misspelled as “Mike.” It had them rolling with laughter, and as he recounted the story, I couldn’t help but crack up too.
But then, as our laughter faded, we found ourselves pausing to reflect on something deeper. As online business owners, the story hit a little too close to home. It was a stark reminder of just how prevalent products from China have become in the U.S. market.
Beyond the tax loopholes, the allure of massive savings fuels the influx of knockoffs and counterfeit goods into the country. Many sellers on major e-commerce platforms depend heavily on imported products from China to stock their inventory.
According to the Observatory of Economic Complexity (OEC), China is the world’s largest exporter, with its exports accounting for roughly $3.59 trillion in 2022. That’s a staggering 13% of global exports.
Why Sellers Love Sourcing from China
Now, I’m not saying everything coming from China is low-quality or fake. In fact, many Chinese manufacturers produce high-quality goods that rival or even surpass global standards.
But let’s be honest. The allure of cheaper, low-quality products is too strong to resist. Why? Because lower costs mean bigger profit margins.
China earned its reputation as the “world’s factory” for good reasons. First, the cost of production in China is considerably lower than in most Western countries. Labor costs are cheaper, factories operate at enormous scales, and supply chains are highly efficient.
This combination makes it easy for sellers to maintain healthy profit margins while offering competitive prices.
Take Alibaba and AliExpress, for instance. These platforms have become synonymous with sourcing affordable goods. We all love the variety they offer, from electronics to fashion to home décor. If you’re just starting, sourcing from China is often the fastest way to test product ideas without breaking the bank.
A great example is Shein, the fast-fashion e-commerce giant. While not an online marketplace in the traditional sense, Shein sources a large percentage of its inventory from Chinese manufacturers. This has allowed them to dominate the fashion market with ultra-low prices and a never-ending stream of trendy products.
Similarly, brands like Anker, which specializes in consumer electronics, rely heavily on Chinese manufacturing for their operations. Anker’s competitive pricing and consistent quality are directly tied to its partnerships with factories in Shenzhen—a global tech hub.
The Shift to Local Sourcing
While sourcing from China remains popular, a noticeable trend is emerging: many online sellers are starting to source locally.
According to a report by the U.S. Chamber of Commerce, 57% of small businesses are actively exploring local suppliers to reduce their dependence on international manufacturing. Why? Several reasons are driving this shift.
First, the pandemic exposed vulnerabilities in global supply chains. Shipping delays, rising freight costs, and unpredictable disruptions forced many sellers to rethink their strategies.
For example, in 2021, container shipping costs skyrocketed by over 300%, leaving sellers scrambling to fulfill orders.
Second, consumer preferences are evolving. Millennials and Gen Z—the two generations that dominate online shopping—are increasingly willing to pay more for locally sourced, ethically produced products.
According to a 2023 report by NielsenIQ, 55% of Millennials and 49% of Gen Z consumers say they prioritize sustainability when making purchasing decisions.
This shift has led to the rise of successful local e-commerce brands. Take Allbirds, for example. The footwear brand prides itself on using sustainable, locally sourced materials like Merino wool.
They’ve carved out a loyal customer base willing to pay a premium for shoes that are not only stylish but also eco-friendly. Similarly, the skincare brand Herbivore Botanicals sources many of its ingredients locally and emphasizes ethical production, resonating with conscious consumers.
Customers Want Value—and They’re Willing to Pay for It
The economic narrative is changing. While inflation and rising living costs are real concerns, they’ve also created a “value for money” mindset among consumers.
A 2024 survey by McKinsey revealed that 68% of consumers are willing to spend more on products that offer better quality or align with their values—be it sustainability, local production, or fair labor practices.
This willingness to spend more is particularly true among Millennials and Gen Z, who now command significant disposable income.
A 2023 study by Deloitte found that the average disposable income of Millennials grew by 11% year-over-year, while Gen Z’s disposable income surged by 15%. These generations aren’t just buying products; they’re buying into stories, values, and experiences.
Competing with Cheaper Products from China
So, how can an online seller like you compete if you choose to go local and your competitors stick with cheaper products from China? The answer lies in differentiation and storytelling.
First, focus on quality and value. Highlight the durability, craftsmanship, or unique features of your products. For example, a handmade ceramic mug from a local artisan may cost more than a mass-produced one from overseas, but its story and quality can justify the price.
Second, lean into your brand’s story. Consumers love authenticity. If your products are locally made, share the behind-the-scenes process. Showcase the people who craft your items, the materials they use, and the communities they support.
Third, emphasize speed and reliability. Local sourcing often means faster shipping times, fewer delays, and better customer service. Use this as a selling point to win over impatient shoppers.
Finally, consider niche marketing. Target customers who are specifically looking for local or sustainable products. Platforms like Etsy and Faire are excellent for sellers focused on artisanal, locally made goods.
The Verdict: China or Local?
Sourcing from China is still a viable option for many online sellers, especially those prioritizing low costs and scalability.
However, as consumer preferences shift and global supply chains face ongoing challenges, local sourcing is becoming an attractive alternative—and in some cases, a competitive advantage.
Ultimately, the decision depends on your brand’s values, target audience, and long-term goals. If you’re willing to invest in quality, storytelling, and sustainability, going local could set you apart in an increasingly crowded marketplace.
But if affordability and variety are your top priorities, China’s manufacturing ecosystem remains unmatched.