sourcing

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…

Sourcing From China is more and more popular for online sellers, however, it’s daunting many new importers. Below are 5 basic steps I have learned from my 20-year experience in sourcing industry: 1. Conducts 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,…

Successful sourcing from China is the result of a systematic approach and hard work. Shortcuts may seem smart, but most often, they result in delays or failure. I am always surprised by how often, even large organization, will be tempted by these shortcuts. Per our experience, below 7-step approach is required to succeed in sourcing products from China.  1. Initial preparation Many China sourcing initiatives run into trouble because of decisions made or not made at the outset. Unclear targets, unrealistic expectations, lack of resources and many similar aspects, if overlook, will cause project delays and waste of energy. Successful companies have thoroughly prepared their project. For example, they dedicate initial time in order to: Define specific ranges of products for sourcing, based on an analysis of volume, labor content, technical complexity and other technical, logistics and commercial aspects. Spell out clear objectives in terms of cost target, volume ramp-up, sourcing project budget and supplier…

Sourcing your products from China becomes a key challenge, as China can be difficult to navigate, especially for new importers. Mistakes in the early stages of importing can drastically impact the future potential of your business. The best way to mitigate the risks of improper procurement is working with a sourcing agent. What are the options for procurement, and why is a sourcing agent your strongest opportunity for growth? There are four major options for procurement: direct purchasing, commissioned agent, trader, and sourcing agent. 1. Direct Purchasing Purchasing direct from a manufacturer means that you handle all interactions with the supplier yourself. You find the supplier, choose the products, negotiate price, draw up contracts, handle claims and disagreements, perform quality inspections, build relationships, request samples, and more. A number of new sellers mistakenly think this is the best avenue because they can maintain full control of their supply and aren’t charged…

The best defense against quality defects is prevention. And the most crucial time to prevent product defects is when beginning your sourcing journey, as you filter potential suppliers. Let’s look at the various steps you can take at the start of your relationship with a new supplier to limit your chances of finding unacceptable quality defects later. 1. How to prevent product defects when negotiating with suppliers? Nearly every importer has had to deal with product defects in their shipments at one time or another. Defects are an inescapable reality of manufacturing—no factory is perfect of the time. But that doesn’t mean you should resign yourself to poor quality products from your suppliers. Preventing a quality defect when first beginning the supplier relationship is almost always far easier and cheaper than trying to correct it after it appears. When it comes to factories’ production capabilities in Asia, not all factories are…

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…

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…