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Elksourcing：Important Things for Sourcing Products from China

Apr 20, 2021 , by 露露

Sourcing Products from China tends to be cheaper than local, and often local manufacturers may not even exist for your products. Here are some of the most important things you need to know if you’re trying to source products from China.

1) Define Your Specifications 

There’s nothing more aggravating for the factory you’re working than either unspecified or constantly changing specifications.

Changing a material partway through the manufacturing process can be costly, time-consuming, and in the worst case may even necessitate moving to a different factory. Before you even begin to search manufacturers, you need to have a clearly-defined idea of what you’re working towards.

There are quite a few specifications you should have at least mostly nailed down before you open your web browser to go hunting. These include, but are not limited to:

Logo/ Materials/ Colors/ Dimensions/ Order QTY

Be specific and detailed. For example, if you were creating a handbag, you’d want dimensions for inside and outside, the strap, any buckles … don’t leave things out. The last thing you want to do is get far down the road with a manufacturer and then find out that they don’t have the capabilities for what you’re trying to make.

Something else to be aware of is that sticking close to standard sizing for your product can make it easier and cheaper to produce, as the factories may already have molds or patterns that work.

If the factory is doing a reasonable amount of business, it may have processed orders for other companies that want to produce similar goods. Take advantage of being second.

2) Use Sourcing Resources Wisely

Once your specifications are clear, you’re ready to start looking for a supplier.

This can be something of a daunting task.

Sites like Global Sources and Alibaba specialize in helping you find sourcing, but by and large they serve as bare bones brokers: you don’t necessarily know how well a company has been vetted, or even if they’re a manufacturer at all. Many trading companies represent themselves as manufacturers on sites like Alibaba.

There are other excellent tools out there that can help with both sourcing a manufacturer and dealing with logistics on shipping. Whichever option you go with, you’ll probably want to pare down to several options that you can send requests for quotes to.

3) Vet Your Supplier

So, you’ve reached the point where you’re reaching out exploratory feelers to your list of suppliers. But who actually are they? How much can you trust them? Is there a way to find out?

There are a few things you can check:

a. The easiest one by far: what’s the email address they’re using? Is it a company domain, or is it a Gmail or other free webmail address? Go to the domain. What does it say? 

b. Some platforms, such as Alibaba, have rating systems and reviews or testimonies for each listing. These can give you an idea of whether or not the factory does good work, but probably won’t tell you if they’re a middleman or not.

c. If you’re dealing with China, ask to see a business license. You might have to get a Chinese speaker to help decipher it for you, but it will tell you the scope of the business’s operations and what they’re allowed to do.

d. Check that country’s business index. Most of these are available online. It might take a little bit of web searching to do this, but you’ll probably be glad you did.

e. Ask for references. A reputable supplier that’s been around for a while will be happy to accommodate.

4) Communicate Clearly

This applies even in English, but it’s hyper-important when you’re dealing with companies based in non-English-speaking countries. Avoid long words or unnecessary jargon, especially things that might trip up machine translation. Not every office will have good English speakers, so they might be relying on software like Google Translate to pick up the slack.

Be concise and to the point, and use lists or extra line breaks where possible. It’s harder for the person on the other end to miss something important.

Don’t just rely on email, either. Email is the most common form of business communication for a reason, but having other avenues of contact can be helpful if email alone isn’t doing the trick.

5) Check a Sample

Everything may look great on paper but translating your specifications to an actual manufactured product (especially if there’s a language barrier) can be a challenge. You may have forgotten something in the specifications, or the manufacturing process might make it look different.

When you receive your prototype, put it through its paces. Use your senses. Does it look right? Feel right? Are the details correct? How does it hold up to wear and tear?

Iron everything out at this stage, while you don’t have a full production run going, and you’ll save yourself a lot of headaches down the line.

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Elksourcing：Factors to Consider While Sourcing Products Globally

Apr 20, 2021 , by 露露

Organizations need to consider pros and cons before engaging themselves in global sourcing activities. Conducting sourcing activities in a different destination is undoubtedly a tough task for marketers. Organizations can gain from their sourcing operations, but it is not free from challenges. The following factors should be considered while sourcing products globally:

1) Landed Cost

Most people focus on the lowest unit cost. However, the unit cost is just one piece of the total cost equation. Besides landed costs, marketers also need to focus on transportation, insurance, duties, brokerage services, etc. If you run an organization, you also need to consider costs relating to unforeseen circumstances. Instances may arise when customs officers decide to assess the freight. For this purpose, you also need to include the examination and local coordination charges. Another factor you can’t afford to neglect is the transparency in the supply chain. Delays in the supply chain would lead to expedited freight charges to meet the target delivery date.

2) Product Quality

In this age of cut-throat market competition, every organization is trying to manufacture quality products that would address the fluctuating preferences of consumers. Modern-day businesses are customer-centric in their approach. There is no doubt about this aspect. Quality plays a crucial role in any sourcing business.

If your customers are unhappy with the product quality, your organization will get a bad reputation. No marketer would want this to happen as it will loosen their gripping’s on the market. Quality issues are bound to arise when you address a vendor through cultures, time zones, and geography. Poor quality stirs customer dissatisfaction and affects everything downstream. In such cases, you may have to sell a defective item at discounted rates without expecting a profit.

3) Logistics 

This is another factor you need to consider when engaging in sourcing activities in a different destination. All the great products and quality would be useless if you cannot bring the goods to the market. For this reason, most organizations prefer to conduct sourcing operations in destinations with good infrastructure and excellent transportation options. It reduces the lead times to a great extent. The finished goods reach the marketers within a short period. This is particularly helpful in times of increasing consumer demands.

However, while considering the logistics capability of a country, you also need to take account of the seasonal fluctuations and weather conditions. Take suggestions from strategic sourcing companies to implement your procurement plan effectively. Professional sourcing agencies will also make you acquainted with the economic and political scenario of the sourcing destination. It is recommended to have alternate sourcing plans in case the primary plan does not go right. This back-up plan will also be of great help if organizations cannot avail of the transportation lane.

4) Location

Organizations choose sourcing destinations that are near to them. This indeed has an added advantage for marketers. One cannot deny the several benefits associated with the location proximity of a country when it comes to procuring goods and services. Mostly, you do not have to deal with different cultures if you select a nearby sourcing destination. You will also get various similarities in the sourcing destination with your native country. Added to this, working in different time zones will not be a headache for you.

5) Regulations

Organizations prefer to conduct sourcing operations in a destination with fewer trade regulations. This is a major factor why Western marketer are going with countries like China. The governments of these countries have undertaken various reforms that are accelerating the trading scenario of these countries. No doubt, it is proving to be a great boon for marketers. Before making any sourcing decisions, you need to probe into all trade incentives or restrictions relating to the sourcing destination. If you are not aware of the trade regulations, seek guidance from professional sourcing companies. The procurement experts will educate you regarding the legal requirements of international trade.

Making a global sourcing decision is not an easy task for organizations of all sizes. You should take into account the above-mentioned factors before coming to a final decision. Considering all sides before initiating your organization’s sourcing operations can open the floodgates of success. The strategic sourcing companies have a great role to play in this regard. With their advice, making calculative decisions will not be difficult for you. Prioritize the above-mentioned aspects before putting your hands in sourcing operations.

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Elksourcing：How to Ensure Quality of Products Sourced from China?

Apr 19, 2021 , by 露露

China has become the most popular sourcing destination now; many western companies are keen to import Chinese products given its low cost and high quality. However, it is a challenging task for business beginners given the demographic and cultural differences, especially because it is difficult to ensure quality of the imported products.

1. Understand the value of your products

When you plan to source products from China, you need to have a full understanding of the products. With the product value in mind, you are allowed to figure out the quotes from suppliers which may help you settle on the market. You have to figure out the raw material, basic process, functions, and even the design.

The most important thing you have to understand is about product quality. You have to know the price range of the product at a certain level of quality. Normally, you will find different prices on the market for similar products because of different quality standards. As such, you have to understand the value of the product.

The full understanding of your products will definitely help you to specify the quality standards in detail in the contract when you cooperate with manufacturers.  

2. Cooperate with a good supplier

Remember to always cooperate with good suppliers when you start souring from China. You can find these suppliers on B2B websites, trade shows, and social media.

How do you know the supplier is good? Firstly, you can do background check online. Secondly, you can arrange a visit to the supplier by yourself, or by a sourcing agent on behalf of you. 

3. Pay attention to quality control 

When it comes to quality control, there is a wide variety of work to do on the list. It covers all aspects from the beginning of the production and the ending of shipment. We divide it into three periods:

Pre-production Inspection

The first comes to the pre-production inspection. At this period, you can check the raw material and components. Generally, manufacturers are inclined to source the cheapest material and components, and they are not aware of the raw material restrictions of your country. You can randomly draw a few samples for lab testing. 

In-process Inspection

Then it should be the in-process inspection. This means the inspection during mass production. During this period, you can check the quality of a few products that are just manufactured, if any problems are spotted, the manufacturer can take immediate actions. You should never check it too early or late given its turnover of the product manufacturing.

Pre-shipment inspection

Literally, pre-shipment inspection means the product inspection prior to the shipping. Pre-shipment inspection is normally carried out once 100% of the order is produced, and at least 80% packed, some clients may even wait until all orders get packed. This is to identify possible faults and errors in the batch orders before you ship the items. This is the last chance for the supplier to rectify an issue.

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Elksourcing：Good Practices in Finding a China Manufacturer

Apr 19, 2021 , by 露露

When most buyers plan on identifying a new supplier, they are usually tempted to focus on the best price. However, concentrating only on low costs can hurt you in the long term. That’s because shaving a few cents off the price of a product is no help if the quality is below standard and the component or material does not arrive when you need it.

In this article, I’d like to share my experience of good practices in finding a manufacturer in China.

1. Decide what you want to produce – This is where a business plan comes into play? Here is a sample clothing line business plan template you can use. The first step is to decide on the type of items you want to manufacture.

This would give you an idea of the type of manufacturers you should look out for. If you want to manufacture denims for instance, you have to look out for a manufacturer that has the required equipment to produce denims.

2. Determine order quantity – Now that you know how much you can spare for production per piece, it’s time to figure out how many pieces you want. Manufacturers in China usually have minimum order quantity so you have to know if you would be able to afford the minimum quantity required.

3. Search suitable manufacturers – There are two ways to do this, you can either search online or offline. To search online, you can visit major B2B websites such as Alibaba, Global Sources, Made-in-China. You will find hundreds of suppliers who claim capable to produce your products.

To search offline, you can visit China, or choose to use a professional agent who would carry out a research on your behalf and link you with a suitable manufacturer based on needs. When selecting an agent, it is advisable to use someone that is very experienced, trusted and reliable. You can ask people that are already in the business to recommend someone that they trust.

4. Screen selected manufacturers – When you have chosen some manufacturers that you wish to work with, don’t just jump into making decisions, you should find out as much information as you can about them before you make your decision. Ask as many questions as you feel would be useful in helping you make your decision.

5. Get references and check them out – While this may seem simple enough, following this rule will help you eliminate about 90% of the potential trading partners you may find on sites like Alibaba or Global Sources. Ask the person whom you’re emailing with to provide you references of others in USA or Europe that they have done business with directly, who you can contact for a reference. It’s understandable if the supplier replies that they cannot tell you all of their clients’ names or brands they are making, but they should definitely be able to provide at least one or two references. When you check them out, set up a phone call instead of just a casual email. You’ll learn very quickly with whom you’re dealing. If the supplier cannot provide you with one genuine reference…a red flag.

6. Send a 3rd party to perform China supplier verification – These days there are a whole list of professional QC companies in China who can provide you a detailed report by sending someone firsthand to visit your potential supplier. You can usually get this done for around $200 and let me tell you…it could end up saving you a fortune!

7. Request product documentation – Ask your supplier if they can provide you some documents related to their quality control, or product safety standards, and see what they come back with. You may ask for things such as a “quality control checklist” for the product in question, or for testing reports showing that the materials being used in the product are safe and legal for your market. If the supplier avoids this request, or has no clue what you’re talking about, don’t go any further. A professional factory or sourcing company will be highly familiar and responsive to such requests.

8. Qualify the manufacturers them – Now, you should be able to qualify the manufacturers to choose the final one. You can choose based on quality level, supplier verification, capability, capacity and the communications, and what you find from the reference.

9. Go with your gut – You don’t need to be an expert in buying from China to know when you have a “bad feeling” about something. Feel strange that the supplier is asking you to make money transfers by Western Union? Is the name on their bank account different from the company name? Does the supplier seem to avoid your simple and direct questions? All of these are signs of a bad partner. Don’t rationalize an obvious lapse in professionalism because you feel you’re “locked-in” to one supplier.

10. Ask for samples – Next, you should ask for samples to be made and sent to you so that you can actually see what the products would look like. You would be able to look at the texture and quality of the fabric as well as the way the dresses are sewn.

11. Pay attention to quality – When you receive samples, what is your opinion of the quality? Does the item seem “just alright,” flimsy, cheap or have some other malfunction? If a supplier is willing to send out a sample that has quality issues, then you will definitely not get what you are expecting when you place an order. NEVER accept the excuse that “Oh, the sample is just like this, but the mass production will be better”. That is a joke in business world.

12. Negotiate terms and sign contract – When you are satisfied and convinced that you want to work with a particular manufacturer, you can now negotiate terms and when you have come to an agreement, you can sign a contract with them. A contract is very necessary so that you can protect yourself and so that the terms of the agreement can be strictly adhered to.

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Elksourcing：Procedure of a Quality Inspection

Apr 19, 2021 , by 露露

For the importers who source from China, more and more realize that it is essential to arrange quality inspection for the products before they leave China. In most cases, the importers choose a third-party QC company to do pre-shipment quality inspection. In this article, I’d like to tell you the basic procedure of a quality inspection.

1) Communication of Requirements

The purchaser describes his products: specifications, dimensions, function, appearance, labeling, packaging… More precise information is provided, the more you can utilize the inspection. If possible, an approved sample can be sent for the inspector’s reference.

2) An inspector goes to the factory

After all products are finished and at least 80% packed, an inspector (or several inspectors if necessary, in most cases, one inspector is enough) goes to the factory.

3) Quantity verification

The cartons are counted, to check if the whole quantity is presented. Then the inspector randomly selects a few cartons, opens them, and checks their content.

4) Random selection of samples

Some samples are taken from each of these cartons, totally randomly. The inspector follows industry-standard statistical rules to ensure his findings are valid.

5) Cosmetic and workmanship check

These samples are checked thoroughly for visual defects. A defect is an imperfection on the product or its packaging. The statistical rules provide a maximum number for each type of defect. If there are too many defects, inspection result is failed.

6) Conformity verification

The inspector also checks if the goods presented by the factory correspond to the purchaser’s requirements. For example, the products might be too small, in the wrong color, incorrectly labeled, or insufficiently protected. If necessary, some tests are performed with the factory’s equipment. Tests vary according to the nature of the products, it’s mandatory for electrical products.

7) Function check

The inspector performs function check based on instruction manual and normal usage situations, to judge if the products conform to what are described on instruction manual, and what are expected for normal usage.

8) Reporting

The inspector issues a report that describes the situation and illustrates it with photos. It documents the findings about presented quantity, visual defects, conformity to requirements, and on-site tests. Also, a PASS / FAIL result will be shown on report.

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Elksourcing：Four Quality Checks You Should Know

Apr 17, 2021 , by 露露

In China sourcing practices, there are four key quality checks, each corresponds to a particular step in the production process. I recommend you keeping them in mind, when it comes to doing business with Chinese suppliers.

1. Initial Production Check

An Initial Production Check is the inspector’s visiting when all materials and components come in the factory. Factories are often suspected of lowering their costs by purchasing substandard materials, and this can be disastrous for the buyer. The Initial production check can also focus on the processes followed as production starts.

Sometimes this can also be critical, as Chinese factories very often cut corners and do not respect the buyer’s blueprints. 

2. During Production Check

A During Production Check allows the buyer to have an idea of average product quality, early in the production cycle. It is a useful and under-rated tool at the disposal of importers, who often only rely on final inspections. It usually takes place once some finished products have come out of the lines. If quality issues are found, what is already produced might be re-workable, and corrective actions can be taken for the rest of the job. It gives buyers the time to plan ahead and try to avoid delays.

3. Final Random Inspection

The Final Random Inspection is by far the most common type of quality check. It takes place once 100% of shipment quantity is finished and at least 80% is packed. So, it can be a real random inspection and suppliers cannot play games. It puts pressure on suppliers and gives power to buyers. Its objective is to confirm a shipment’s quality, rather than catching issues early.

Therefore, we usually suggest our clients to arrange both final random inspections and during production check, to avoid catching big problems at the last minute. 

4. Container Loading Check

It can be a worthwhile option in the case when the shipment requires special container loading. It can also ensure that the right kind of products are shipped out in the right quantity, or when several suppliers bring their products for consolidation.

Only the most sensitive projects require all types of inspection. Generally, only one or two of these tools are used, depending on the risks identified by the buyer.

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Elksourcing：How to Find Reliable Chinese Suppliers?

Apr 17, 2021 by 露露

The process of designing and developing a product idea into a finished product may seem daunting, but it can be achieved by partnering up with reliable suppliers. The followings are some tips about how to find reliable Chinese suppliers.

1). Connect with Manufacturers through Online Platforms

There are various established online platforms dedicated to bring together renowned and reliable Chinese manufacturers under one roof, for your convenience. The platforms allow you to filter your search and locate manufacturers and suppliers specializing in producing the product of your choice. You will get contact information of the manufacturers on such platforms, where you can directly talk and discuss your exact product requirements. It will be good to try and connect to more than one supplier, so that you can compare the quality of the products and the price offered. Also, prioritize your search on the basis of the quantity you require and the standards of production that you wish to be maintained by the manufacturer.

2). Attend Trade Shows

Trade shows are an excellent way to locate and connect, with Chinese suppliers. You might attend local trade shows in your own country or fly to China to attend any Chinese trade show and fair, where there are a large number of exhibitors displaying their products or services. This will give you an idea about the quality that you can expect and give you a chance to meet a number of suppliers, within a very short span of time. Although, if you are looking for bespoke manufacturing, trade shows will not help you much. Trade shows are a platform for suppliers to showcase their finished goods and sell those products to interested parties.

3). Engage the Services of a Sourcing Company

Locating and connecting, with Chinese manufacturers and suppliers can be a daunting task, especially if you have no connections and networks, whatsoever. By engaging a sourcing agent to conduct a thorough research on Chinese suppliers on your behalf, you can certainly ensure less burden and peace of mind. Procurement companies offer a fee-based service eliminating your need to personally fly down to China and save you a lot of hassle, time and money.

Sourcing companies usually have offices located in key sourcing destinations and China being one of the top low-cost country sourcing destinations, boasts professional sourcing agents to represent you. These professionals will help you find the most appropriate manufacturers and suppliers matching your specific product requirements, including quality, quantity, customization, price and delivery. The experts will even negotiate the terms of payment and other clauses, on the behalf of your company. Also, they will ensure that your products are dispatched and shipped, within the agreed upon time. Sourcing agents will be your ears and eyes in China and, therefore, considerably bring down the risks of sourcing from an oversea manufacturer.

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Elksourcing：Important Notes for Global Procurement Process

Apr 12, 2021 , 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.