Sourcing products has been the practice for many online businesses in recent years. Most sellers, if not all, get their products in China mainly because they have the most number of suppliers and manufacturers you can choose from. Not only that, they have low production costs which is a plus for many sellers.
But if you think it’s easy to source products in China, you might want to rethink that. There are a lot of elements involved that you must consider carefully because these will determine the success of your business.
What is involved in sourcing?
Understanding and planning your product. Before anything else, you must understand the product you are going to sell on your platform. It’s easier to narrow down potential suppliers when you have a particular product in mind. If you already have an idea, you can get down on the details such as the material you want to use, its function, and even the colors. Prepare a precise list of your expected results beforehand so you will be ready when you get to talk with a supplier or manufacturer.
Searching and evaluating suppliers. Probably the most important aspect of sourcing in China is finding a reliable supplier to produce your products. China has a huge base of suppliers and manufacturers because they have a massive labor force. You will have a wider selection but it also means that you need to spend more time evaluating potential candidates.
Simply searching on the Internet will not cut out when looking for a supplier or manufacturer. You have to find someone who will follow your requirements and be able to produce great quality products at an agreed timeframe. It’s also important to check whether they are a legitimate business or not so check their license to verify. A factory audit would also be important when checking the supplier and inspecting whether they comply with local and international standards. You want to avoid those who have poor working conditions because it reflects poor management as well.
- Calculating costs. It’s undeniable that sourcing products in China will save you money but that will only be true if you have calculated the costs you might incur correctly. The quality of the product would largely affect the costs since using a higher quality material means a higher price as well. When it comes to China-made products, you will get what you pay for. Don’t expect to get great quality products for a ridiculously low price.
Aside from production costs, you should also set aside money for unexpected costs. It’s not guaranteed that every production would go seamlessly so it’s better to have an emergency fund for this.
- Negotiating the price. If you are new to sourcing, you have to research the prices so that you have an idea of what to present to your supplier or manufacturer. You and the manufacturer would most likely not agree to an initial quotation which is why you have to negotiate the price that both of you can benefit from. In some instances, they would try to increase the price especially if they notice that it’s your first time.
To avoid rip-offs and creating a non-ideal situation for your business, it pays off to be knowledgeable about sourcing prices before you talk to them. Be alert if the supplier tries to increase the price suddenly without justifying it. If you think that you are getting scammed, don’t be afraid to walk away from the negotiation.
- Quality control and pre-shipment inspection. Before the actual production, you might want to ask for a product sample to see if the supplier understood the specifications. With a sample, you can make changes to your product if you are not satisfied. During actual production, quality control is an integral part of the process. You can hire a company that does quality control to ensure that the supplier followed your specifications correctly.
Third-party companies that provide quality control services also do pre-shipment inspections. If they find defective products before they are shipped or put into the warehouse, they can send them back to the factory to have them replaced. This way, delays can be avoided.
Guaranteeing your money’s worth
Sourcing is not an easy task for online sellers who are diving into importing products from China for the first time. It’s actually a complicated and complex process that will undoubtedly take a lot of your time since you will be dealing with a foreign entity with different laws and a different language. There’s definitely a learning curve but you have to be patient and wise when it comes to decision-making.
Looking for a supplier or manufacturer alone could take several days or even weeks because you have to verify their legitimacy. When you have a shortlist, you also have to impress them as well to get the support you need. Building a relationship with a supplier or a manufacturer is an important aspect of production. If you have a good working relationship, you can work together in creating a product that follows your vision. You can also get great discounts if you order often and in large quantities. Trust goes both ways in sourcing so you need to show your capability as a business owner.
If you feel overwhelmed with all the information about sourcing, there are actually two ways to do it: you can do it all on your own or hire an expert to do it for you. Not ready to commit to a large MOQ yet? Get a trading company to source for you. But if you can meet the required MOQ of the supplier and want a more streamlined supply chain, then you definitely need a sourcing agent.
A sourcing agent or company usually has an office in China which makes the whole sourcing process easier. As agents, their job is to bridge the gap between you and the supplier and keep your supply chain management running smoothly. Lansil Global has all that you need in a sourcing agent.