In China, the wages for skilled workers are still quite low in the global perspective, this is probably the most important parameter which makes China the factory of the world. Sourcing products from China can prove quite advantageous for struggling western businesses. But sourcing products from any developing country is not free of risk. There are a great number of parameters that you need to consider before jumping in with your investments.

1). What Are Main Challenges Faced by Business Owners Who Intend to Source Products from China?

A. Communication– First of all, Chinese people do not generally have a good command over the English language. Hence, initial talks and negotiations require Chinese speaking skills. Many western business owners are therefore clueless and ineffective in communicating with potential suppliers.

B. Varied Business Culture– It is a known that most countries in the world have some differences in their business culture. But regionally, the differences are not as pronounced as they are with markets like China. Hence, sourcing products from China can get a little complicated if you lack a good understanding. You should only proceed with a thorough understanding.

C. Supplier Performance– Monitoring supplier performance is one aspect of sourcing which many businesses fail with. It requires on-ground presence on your part, constant communication and monitoring activities. If you cannot manage to effectively monitor suppliers, how will you recommend improvements? This is another major problem with China sourcing.

D. Quality Concerns– Quality of products manufactured is quite important for any successful sourcing process. So, if Chinese suppliers offer substandard products, your investment goes down the drain. That is why any business owner should take steps to monitor quality at the step of production. A single batch of low-quality products can ruin your brand’s reputation.

2). Why a Professional China Sourcing Agency is Needed?

Identifying Key Suppliers – A sourcing agency with experience in the Chinese marketplace usually has core knowledge regarding the country’s top suppliers. Depending on your industry domain and particular requirements, agents can shortlist the most relevant suppliers. Most businesses are unaware that sourcing agencies actually put in a lot of work during the pre-selection and finalizing of suppliers.

A. Achieving Profitable Contracts– The contract is the most important agreement that determines what type of profits you can expect by sourcing products from China. With powerful communication skills, agencies can effectively convey your needs to choose suppliers. They can negotiate sourcing contracts that focus on helping you conserve costs and meet deadlines.

B. Maintain Process Efficiency– Professionals from sourcing agencies proactively take measures to monitor supplier activities and performance. They are quick to suggest improvements with your interests in mind. Any problems that arise during the raw material sourcing and production processes are swiftly addressed. The result of such efforts is consistent efficiency.

C. Quality Control and Logistics– A sourcing agency will take full responsibility for performing quality checks and factory audits. Steps can be taken to ensure that suppliers adhere to the specified standards of quality. Agency professionals are also equipped with suitable logistical options for global sourcing clients. There is usually zero hassle involved in receiving products that meet your expectations.

This was a peripheral insight into the key challenges of China sourcing and how a sourcing agency can be of help. Get in touch with a reputed sourcing company to get the best possible profitability for your business.

China Sourcing Agent

Elksourcing：Why a Sourcing Agent is Necessary for Your Importing Business?

Apr 12, 2021 Elksourcing, sourcing agent by 露露

With advanced manufacturing techniques and large-scale production, it is necessary to seek the global market for finished goods. Along with the increased movement of goods, the services sector has also flourished across nations. Nowadays, more and more importers have learned that a good sourcing agent is necessary for their importing business.

Here are some benefits of using a sourcing agent:

(1) A sourcing agent represents the buyer and not the supplier so that you will have a local representative for your business.

(2) Sourcing agents help you in finding out trustworthy suppliers and factories with expertise in specific products.

(3) They help in finding out the products at affordable price and will save you from wasting money on hidden costs.

(4) They can easily communicate in the native language, thus making it easier for you to deliver your message to the supplier and other local authorities.

(5) They manage all the tasks of your company or business on your behalf. Sourcing agents perform the regular quality check.

(6) Most of the sourcing agents in China work on commission basis and will pay the suppliers on your behalf.

(7) Good buying agents take quotations and do the price negotiations on your behalf.

With the help of a good sourcing agent, what shall you do to find the good suppliers? The following are some steps:

1. Conduct an initial research

This is the first stage where you decide what your primary activities are, what are the needs of your clients and who your competitors are. These steps help you to determine your business goals and your position in the market. You and your sourcing partner need to design a business plan to determine the performance measurement system and primary work strategy.

2. Evaluate supplier and market

Your sourcing partner, which offers global sourcing service helps you to make a supplier selection benchmark. When you have the list of criteria, you can make further changes in the sourcing strategy and determine the final cost. Given the fact that you already have information regarding clients and prospective markets, you can identify the economic and operational benefits of the project and decide, if you at all want to source from a foreign base.

3. Select suppliers

You can create an inquiry and send it to your selected suppliers. After you get back the quotations, you can compare the price and quality make a final list of suppliers. You can then conduct a price negotiation depending on the final supplier list and determine how much you can save.

4. Implement decisions

In this stage, you have to create a performance analysis schedule. Your sourcing partner is going to be a part of the implementation team where you will have to decide resources, shared supply and logistical arrangements. You should keep an account of the performance of every supplier in case of more than one supplier.

5. Monitor supplier performance and take necessary measures.

You must make sure that you, along with the company offering global sourcing service carries out regular performance check and reports it. This will assist you in realizing whether the suppliers are sending products as per your requirements or not. You will also get to know if the suppliers are following your criteria of quality and safety or not.

Shopify Tutorial

Elksourcing：Important Notes for Global Procurement Process

Apr 12, 2021 Elksourcing, procurement by 露露

Any business that wants to reap the benefits of low-cost global markets needs to make a move towards procurement services. But there is a problem to start with. The problem faced by thousands of business owners is a lack of insight. In this article, I’d like to bring some important notes for global procurement process.

1. Suitable Procurement Location

One of the most fundamental decisions of procurement is the location/marketplace/country. Taking this key decision becomes easy with intelligent insights from a procurement service provider. Procurement agency professionals use advanced analytical mechanisms to study potential target markets. The market offering the best conditions and benefits is selected.

2. Manufacturing (or buy-in)

Are you sure that investing in a low-cost market will actually help you make considerable gains? What if better management and some tweaks can make manufacturing more profitable? Once again, this is a decision that should be taken with the help of intelligence consultants. They can conduct an analysis regarding both internal and external factors to direct your investments in the right direction.

3. Key Procurement Market Suppliers

Once a market is identified, the next step is to look at potential suppliers within it. Procurement intelligence professionals play an active role in this regard. They use their knowledge and expertise to identify, shortlist and evaluate the most relevant local suppliers. This step is necessary to ascertain that a supplier can actually meet your procurement requirements without difficulty. Leading procurement service companies are already associated with a vast pool of suppliers in key marketplaces.

4. Current Market Trends

Most businesses operate in a world where supply market volatility has to be factored in. Business owners should realize that a market deemed as profitable in the recent past might actually be impractical today. Changing trade policies, regulations, geopolitical factors, local strife etc., are some of the factors responsible for influencing market trends. Being in-the-know is essential to avoid unwanted outcomes. This is another aspect where intelligence solutions can help.

5. Key Supply Risks

No procurement marketplace is completely devoid of risks and that is very much a reality. Even the most successful procurement process can come to a screeching halt if adequate measures are not taken beforehand. A procurement service provider can conduct a financial assessment of suppliers, identify potential issues by creating should cost models, and implement risk management strategies to protect from external factors. Any risks, right from the initial stages of a process till products reaching you, can be predicted and avoided through intelligence.

6. Supplier Ethics

Suppliers should commit to more than just facilitating profitability for their clients. Abiding by international and industry standards, practicing ethical labor and safety norms and measuring up to CSR requirements are crucial. In an age where social media has made everything transparent, any leaks regarding malpractices can put your procurement operations in jeopardy. Business owners should depend on procurement companies to find out information regarding potential suppliers.

7. The criteria to find a procurement agency for your business are

a. Make sure that an agency offers solutions for businesses within your industry domain.

b. The agency should specialize in providing procurement-related intelligence solutions.

c. Your chosen agency should have good connections in terms of global supplier partners.

d. Get in touch with a reputed procurement company and make the most of your investments.

China Sourcing Agent

Elksourcing：How Can a Sourcing Agent Help Your Product Sourcing?

Apr 12, 2021 Elksourcing, sourcing agent by 露露

China is the most prominent place for sourcing of products. With the country’s economy growing stronger, the procurement and sourcing infrastructure is advancing to an even better state. It isn’t hard to find proficient low-cost Chinese suppliers. In order to get it done appropriately, a business needs to create association with the global sourcing companies.

Agents from such companies are well-versed regarding the Chinese market, and its latest business model. They are capable of seeking out appropriate suppliers, and negotiating your agreements, as per your requirements. If you still hold second thoughts regarding China sourcing agent, the below mentioned reasons may clear it out.

1. Benefits of Chinese Product Sourcing

1). Quicker Production: We all know that time is of essence. It is even more significant in a business, as it influences the total success of a business and its activities. With the increase in demand, supply should not fall behind, or the business will not last. Sourcing Chinese products can assist you reach your production requirements faster. You can find products that suit your quality framing, faster.

2). Lower Wage Rates: Let’s admit it: wage rates in China has increased in the past few years, but it is still pretty far away from reaching the currency value of the Western countries. That is why, in spite of the rising wages, the costs are way lesser than the first world countries. This makes the Chinese marketplace, abundant in opportunities.

3). Great Production Infrastructure: China’s recent economic boost has upgraded its infrastructure. That being said, the Chinese suppliers are famous for being able to produce a large volume of products. Now that the new technologies and machinery have been incorporated in the system, product suppliers have taken it a few good steps higher in terms of both volume and quality. The inclusion of an enhanced infrastructure, and modern research and development techs have significantly lowered disputes over products.

4). Safe Sourcing: You are likely to face some unwanted situations if you are buying products without the assistance of an arbiter. This situation can be avoided when you make your investment via professional sourcing companies. Ground agents taking care of your interests can be crucial. Sourcing agencies move forward to improve production, resolve important problems, and evade risks and output loss.

2. Why Should You Hire a Sourcing Agent for Your Business?

1). Many businesspersons do not have a clear idea about supplier pools in the top low-cost markets, moving forward without expert guidance can be unwise. The best idea is to hire from a list of the best professional sourcing services, and supplying your requirements to them. The experts are capable of calculating your needs, and connect with the appropriate suppliers in cost-effective markets. In simple terms, the better the sourcing agent, the better the suppliers you connect with.

2). A supplier is also a business company, so, you need to be sure that they are trustworthy. Verifying a supplier’s identity papers is highly important. The sourcing agency you hire will take care of this task efficiently. The supplier’s certifications, license plates, and registration details are checked. You also hold the authority to inquire about their year of foundation, capital, and quality standards.

3). Another method of verifying an inexpensive abroad supplier’s ability is to visit their factory. This is also a task you can assign to your sourcing service provider. The agents can visit the factory, converse with the representatives of the supplier, and ensure if they’re legitimate. Such visits can help you discover the infrastructure of the factory, and clear your views regarding the product development, skills, manufacturing, subcontracting etc. If you have your doubts, you can directly interact with the supplier through video sessions.

Now that you know the benefits about hiring a China sourcing agent, you can get your business to make the best possible profit, while delivering quality products to your customers.

Shopify Tutorial

Elksourcing：Common Practices to Make a Prototype

Apr 12, 2021 Elksourcing, prototyping by 露露

So, you have a recurring dream about an innovative new product, or a persistent feeling there is a large need for the product you want to invent and get to market, you want to make it to real.

What are the common practices to turn a new product idea to a marketable product? You’ve got to get it made as a prototype for starters. And what are the necessary steps that must be taken to get you started in the prototyping process?

Step 1: Draw your Design

The first step in creating your initial product prototype is to create a sketch of your design both as a complete unit and separately, with the individual components. It is likely that you will end up with an entire sketch book of designs as your creative energies flow out onto paper. Being as detailed as possible will make the next steps in the process easier for you and the design and manufacturing professionals you may work with down the road. And, those details will also assist with the patent process once it is time to move forward with that plan prior to manufacturing your product.

Step 2: Visualize your Idea Virtually

The next step in the prototyping process is to create a 3-D computer-generated version of your idea. In doing so, you’ll avoid costly mistakes in the engineering and production phases. Virtual prototypes can reveal possible clearance issues in moving parts or identify those not made to spec for various industries. There are several 3-D modeling software programs that can be used to make this process easier, including products from Autodesk, Solidworks, ProE and more, all moving you toward the goal of turning your original idea into reality.

Step 3: Make a Physical Model

Upon completing the virtual images of your product idea, you are ready to move to the next step of prototype generation. Now is the time to unleash your full creative potential! Using whatever materials are available to you, create a Physical Model of your product using the rendered drawings. To save on costs, start with inexpensive materials as you will probably need to make several attempts at an acceptable model for patenting and production. This is where trial and error comes in and you can learn more about potential flaws in the design and necessary modifications. If you lack the experience and knowledge to build your model – and need to keep costs down – seek out a design student and/or retired engineer to help you with your task.

Step 4: Partner with a Manufacturer

Once you are satisfied with the physical model you have developed and feel ready to move forward, it’s time to locate a manufacturer best suited to mass produce your type of product. You’ll want to find a company that can not only produce your product at a price per item that will make you profitable, you’ll also want to make sure they have an industry-proven track record for producing quality goods delivered in a timely manner. Factories across the globe are numerous and often excel at producing one type of product over another. That’s why you may want to connect with a sourcing company that can help manage the entire production process from beginning to end.

Shopify Tutorial

Elksourcing：Quality Audits Help to Reduce Supplier Chain Risks

Apr 12, 2021 Elksourcing, Supplier Chain by 露露

As a buyer, you’re likely under pressure to find the best price for goods without sacrificing quality. And understanding a supplier’s capabilities before working with them is key to this objective.

Many experienced buyers choose to rely on a dependable third-party QC partner as their “feet on the street” for supplier evaluations. These partners can perform a quality audit on your behalf and provide detailed results, including production capabilities and potential quality issues.

Here are a few risks an audit can help you avoid before you place an order with a supplier:

Production and shipping delays due to disorganization

All buyers worry about delivery dates. A bargain price or high product quality may be little consolation to customers that don’t receive their good on time.

Shipment delays threaten your reputation as a reliable supplier. A late delivery can cause a customer to end their business relationship with you or consider alternative vendors. To make matters worse, you might not receive full payment for an order if your customer charges back for late delivery.

Even if your supplier is responsible for a delay, your end customer is still likely to blame you for a missed delivery date.

Quality issues due to limited factory QC checks

Quality issues pose a different level of risk, depending on your product type and the defect severity. While some mishaps are inevitable as you iron out the production process, you never want to let quality issues through to your customers.

This is especially true for purchasers who sell on platforms like Amazon. Just one defective shipment can result in a suspended Amazon seller account.

Some questions an auditor might ask during a supplier audit to verify internal QC processes include:

a. Does the factory conduct incoming inspection according to defined standards and requirements? Are the results of incoming inspections recorded?

b. Is the status of raw materials clearly identified after being inspected (e.g. “approved”, “rejected”, “pending”, etc.)? Is rejected material recorded and quarantined?

c. Do personnel responsible for product quality have the authority to stop production to correct quality problems?

d. Does the factory conduct pre-shipment inspection and testing based on the defined inspection requirements? Are the results of inspection and testing recorded?

Conclusion

Quality audits are an effective tool purchaser can us to evaluate new suppliers and manage supplier risk. They can also be a tool for continuous improvement, since you can use audit results to benchmark established suppliers and compare them to others. Together, these offer a robust analysis of supplier risks and help you determine the best fit for your supply chain.

Shopify Tutorial

Elksourcing：Step-by-step Approach to Supplier Chain Management

Apr 12, 2021 Elksourcing, supplier by 露露

Supplier chain is an integral factor in the success of your importing business. They can work like a well-oiled machine, where confidence levels are high, and the quality and delivery of products and services from your suppliers exceeds your expectations.

Or they can become a burden to bear, swallow up precious resources and cost your business thousands of dollars in administration and performance management. Like most importers, you probably find yourself in a situation somewhere between these two extremes.

But there’s hope when it comes to finding and developing great supplier relationships. Stick to this step-by-step approach, you’ll be reaping the rewards of supplier chain management.

1). Supplier selection

Choosing suppliers is crucial to your business. And categorizing your supply base is also vital to making the most of your available resources when managing those suppliers.

Importers often consider various criteria for evaluating potential suppliers when beginning their search, such as:

A. Minimum order quantity (MOQ): smaller purchasers or those with a limited budget, in particular, will be sensitive to the minimum order size a supplier requires.

B. Payment terms: importers large and small may consider payment terms an important factor in choosing a supplier.

C. Certifications: common certifications like ISO 9001 may be valuable to you. But remember that certifications may not always be legitimate and are best verified through an on-site audit.

D. Production capabilities and capacity: an obvious point but one that many importers don’t know how to verify. Requesting and approving a pre-production sample and performing an on-site audit are among the most reliable ways.

2). Developing an approved suppliers list

We often find that a company’s supply base invariably expands over time. Indeed, taking advantage of the “risk management” option of a “second source supply” is a very prudent business strategy.

However, it is occasionally a good practice to review your supply base and consolidate the number of suppliers you have to manage, which is an expense in itself.

3). Auditing suppliers

As with most audits, supplier audits represent a snapshot in time. Lots of information can be collected by this method, and it is indeed a mandatory requirement for most quality management systems. There are two main types of supplier audits:

A. Questionnaire-type supplier audits

B. On-site supplier audits

Performing your own informal audit during a supplier visit. One way is to audit your supplier informally while you’re visiting their facility. You can get a lot of valuable insight just from having a look around the production area, warehouse and other grounds.

4). Measuring supplier performance

You can easily measure supplier performance if your systems support making the data readily available. And KPIs will become a very powerful tool if used correctly. Supplier KPIs are a good measure of overall supplier performance, such as: on-time delivery rate, defect rate, response time, etc.

5). Supplier chain management

Once the development stage has matured to an acceptable level, it’s time to tailor on-going management to the needs of each supplier.

Conclusion

Sourcing to find the right suppliers is one of the most important functions of manufacturing. Your suppliers have a direct impact on the quality of your product or service. “Fighting fires” later in the process is costly, wasteful and invariably leads to customer dissatisfaction—in one form or another—and loss of revenue.

Begin by choosing the suppliers that best match your criteria. Compile your suppliers into a categorized list for ease of organization. Audit each supplier, either by phoning them and asking important questions, or better still, visiting them in person to perform a more comprehensive audit on site.

Measure the performance of your suppliers, and evaluate each objectively, by looking at their KPIs. Work with your suppliers directly to cultivate a strong relationship and improve quality. By taking all of the steps above, you can make informed decisions about which makes the cut and which needs further development.

Invest the time in your suppliers, maintain good lines of communication, speak to the right people and avoid confusion. Suppliers are an essential key to your success. And the ones you choose to work with can either make or break you.

Shopify Tutorial

Elksourcing：China Remains a Major Sourcing Destination

Apr 12, 2021 Elksourcing by 露露

There have been countless articles about China’s reign as factory of the world coming to an end. While it is true that wage increases are making some of China’s lower-end industries, such as textiles, out to low-cost countries such as Viet Nam and Bangladesh, China remains one of the top procurement sources for mid- to high-tier products. Even as some of the lower-end industries move out, there is more to a country’s competitive supply chain than labor costs. China maintains a set of key factors that will continue to make it a competitive exporter even as the economic landscape shifts.

1. High-quality Infrastructure (Especially Export-related Infrastructure):

China’s rail and road infrastructure, particularly along the coastal cities, are among the most developed globally. With a history of double-digit investment rate every year in infrastructure, China’s ports complement the rail/road infrastructure. Shanghai long surpassed Singapore as the world’s busiest port and it will be a while before key competing countries can match China’s current (and continuously developing) infrastructure.

2. Increasing Qualified Labor Force:

China produces hundreds of thousands of graduate engineers and scientists each year to be absorbed into the local industries. Moreover, China now has the world’s largest student population studying overseas with a sizeable number returning upon completion of their studies. Although there has been renewed attention to quality rather than quantity in the number of graduates, the increasing education level will boost China’s competitiveness vs some of the other low-cost sourcing destinations.

3. Growing Research and Development Expenditure Leading to Higher Innovation Capacity:

Despite the reputation for copying, China’s innovation has continued to pick up pace. A report by McKinsey & Company highlights innovation in areas such as renewable energy, consumer electronics, instant messaging and mobile technology. As internal and external competition increases, China is also focusing on price reduction, adaptation of business models and supply chain development. This will lead to the elimination of less efficient firms, both domestically and those focused on the export market.

4. Lower Costs Comparing to Industrialized Countries:

Despite double-digit growth in both wages and currency appreciation during the past decade, China’s minimum wage still stands far below that of industrialized countries. Rising wages are correlated with increasing productivity. Therefore, countries competing with China for lower costs will have to also compete with increased productivity and vice versa.

5. Specialization, Not Only at Sector Level, But Also at Product Level:

China’s specialization in various products remains unparalleled globally. There are entire towns dedicated to producing a single product. For instance, Pearl River Delta is known for electronics industries, whereas Shenzhen has become the IT hub of China. Moreover, the product range available in these agglomerations is diverse, catering for low- to high-end products, resulting in differentiation as a key competitive factor.

6. Pro-export Policies:

It is true that the Chinese authorities have decided to alter the export-led growth model to one focused on domestic consumption. However, the country’s “going out” policy continues to have explicit support (via export rebates or subsidies) or tacit support, especially at local level. This support will continue to boost Chinese exports’ competitiveness -at least in the short term.

Elksourcing：How a Sourcing Agency can Help Your Sourcing from China?