Elksourcing

Sourcing experts are strongly emphasizing the need for even the most experienced buyers to ensure effective evaluation measures when selecting suppliers in China—particularly when sourcing online. This follows the abrupt departure of Alibaba’s top two executives after their disclosure that the company’s sales staff “intentionally or negligently” allowed fraudsters to set up more than 2,300 verified storefronts. Let’s face it, we are all still going to be looking online for new suppliers. So, what can you do to protect yourself if you cannot fly to China to investigate every potential supplier that you come in contact with? The online sourcing experience should look something like this: Search only for suppliers that have been verified by a third party outside of the website that hosts their information. Pay for background information and document confirmation for any potential supplier before you make any commitments or pay a deposit. Include in contracts with your supplier…

From time to time, some small importers find me, tell me the story that unacceptable Chinese products are received, and ask me how they can force a Chinese supplier to refund an order. My response is usually “forget it, and do things right on your next order (make sure you read about best practices).” There are four important things to keep in mind when you buy from China: 1. Preproduction samples are not indicative of average quality Your supplier might show you nice samples, and pretend that they come from a past production of that factory. Do not think that’s what you will receive. Even if that’s true, who knows if they were the nicest pieces out of a batch that counted 90% defectives? Don’t forget, most assembly and finishing operations are done by hand in low-labor-cost countries. 2. After you have paid, you have no more leverage with your supplier What will…

When sourcing from China, one of the most important things you as a buyer need to do is to make sure you are working with the right supplier. So, where do you start? Define your ideal supplier. This is unique to each buyer and depends on a number of factors, including price, quality and lead time. Define your location. Where factories are based should also play a role in supplier evaluation. While factories in China’s northern and western provinces have lower manufacturing costs, the quality is often lower. Those located along the coast and in the southern region have higher production outlay but the quality is generally better. Note as well that the farther inland you go, the more expensive your logistics costs will be. Look in the right places. B2B websites can help buyers find suppliers, but it’s highly recommended meeting suppliers face to face. Further, always do your due diligence and verify…

So, you have narrowed down your list of potential suppliers, done your due diligence and decided on one factory to manufacture your product. But before you sign that contract, you would most probably need to negotiate quality, price and payment terms. The first thing you need to make sure is you are talking to the decision maker. Quality and production concerns, for instance, should be discussed with engineers, managers and QC personnel, not salespeople. It is also better that you have your own translator, one whom you have briefed in advance about terminology and what to expect. Before you start negotiating terms with the supplier, be aware of the following: Face to face meetings are always the best way to communicate. Most factory representatives will not tell you “no.” There will always be problems-you just will not know about all of them. Do not confuse being polite or even “yes”…

Regular, consistent and independent quality control is possibly the most important part of the buying-from-China experience. Some key points: Write it, confirm it, repeat it, and confirm it again with someone in authority. Get things repeated back to you from the people responsible for each step. Get things signed. Determine what is essential, what should happen, and what would be nice to have. But do not tell your supplier anything is less than mandatory. Safety, industry and customs standards are mandatory. Product features are crucial. Specific attributes that are not defined by law or function are important. QC essentials In-house QC is not independent. It is profit insurance for the supplier. Either do QC yourself or pay a third party to do it for you. But do it no matter what. Check incoming materials/components, semi-finished goods, packaging and finished goods. Unless you can wait for a complete product re-do with no financial penalties,…

China industrial sourcing has many challenges. Most of them are a result of the Chinese business environment and the fast pace of the country. But some problems are self-inflicted by buyers and are not related to suppliers. The three main traps I have seen buyers fall into are: Buyer improvises a project and launches ill-prepared sourcing missions because they cannot secure the right expertise; Buyer gets the first steps right but then hesitates for a long time because of the complexity of the project or because of internal conflicts; Buyer has been waiting for a long time and suddenly gets impatient and makes hurried decisions. This is how these three sourcing traps play out. I am sure you will be able to relate at least to one of them, even if the cases below are a little of a caricature. 1. Improvise Someone decides that it is time to source goods…

Sourcing From China can be a daunting task, especially for small businesses and first-timers who might not have the means and global resources to establish full-scale overseas operations the way big businesses do. That’s where other sourcing tools come into play. Here is a step-by-step guide that can help businesses like yours get an idea about the various options available out there in the market, and zero-in on the right suppliers to meet your sourcing needs. 1) Look for suppliers Use various sourcing tools to get an overview of the options available in the market. An internet search on sites like Alibaba, Google, etc. can generate great sourcing leads on reliable suppliers. Sourcing magazines & trade shows are also vast sources of information on wholesale distributors, manufacturers and suppliers of products. While social media cannot be used in isolation to identify suppliers or for product sourcing, it can be very useful to…

Cost down your product sourcing in China is half success of your importing business. As a first-time importer, you need to test your market first with smallest capital at beginning, and put your investment in more important things: marketing & sales. Below is a cost down guide summarized from my experiences of China sourcing business. #1 Start with sourcing one product at a time You can easily find many successfully proven cases that just start with one or handful products, and per the response of the market to decide the next step afterwards. Expanding a product line needs a single product to be proven at the beginning. If you plan to start with a plenty of products, it will be required a lot of time and money to invest. That’s a hard and difficult path to go as a first-time importer or startup. Investing in one product is a good option to…