You need to know what you are after and how to go about it. Here are some tips for setting your China sourcing strategy.
China has emerged as a leading manufacturing hub of the world. From electronic goods to plastic products- the country has it all. It should come as no surprise that more and more companies are now sourcing products from China. When it comes to variety, quality, and pricing, very few countries can compete with China.
Whether you are a business owner or a purchasing manager, one of your primary goals is to source high-quality products at the best price. Getting quality products at low prices enhances the cost-effectiveness and profit margins of your business.
If you are new at sourcing products from overseas, you must be wondering if sourcing from China is a viable option for you. You may be wondering if it is worth the risks. When done right, the benefits of sourcing from China far outweigh the risks. However, to achieve these benefits you should institute a well thought out strategy to ensure you get the best quality products with minimal risks.
Here are seven helpful tips for you for setting up your China sourcing strategy:
A sourcing agent performs the outsourcing activities on your behalf. Instead of hiring someone else, you may be tempted to do it yourself. You might think that all you need to do is visit China yourself and speak to a few suppliers. Sounds straightforward enough but have you considered the following hurdles? Do you speak the local language? Are you aware of local business practices? Do you know the licensing, certification, and other legal requirements?
Choose an experienced sourcing agent that not only has a domestic office but also a well-staffed office in China. Such a sourcing agent would know the local language and dialects and be well-versed with the business practices. With several years of experience, the sourcing agent would help you connect with reliable manufacturers or suppliers specializing in the product you need.
Take your time in choosing the right sourcing agent for your business. The right sourcing agent can take away all your outsourcing worries letting you spend your precious time on other critical business activities.
As important as it is to hire a sourcing agent for your business, it is equally important to verify your sourcing agent’s credentials. Don’t select the first name that pops up on your Internet search. Do take the time to research the sourcing agent and verify their credentials and track record; it is a vital step that should not be skipped.
When choosing a sourcing agent, consider the following:
Hiring the right sourcing agent is a crucial step to successfully sourcing products from China. Ask the right questions to ensure that you partner with the right agent that can help grow your business.
For the sourcing process to be successful, you must provide your agent and the manufacturers a detailed specification of the materials or products that you want. Be very clear about what you want in the product or raw material. Do not assume anything is implied because doing business in China can be quite different than doing business in the West.
Failing to provide detailed specifications may lead to confusion and you could end up with something different than what you had ordered. You will end up wasting a lot of time and money getting the right products.
Provide detailed drawings if possible. If you are currently manufacturing your products, you may want to send them a sample piece. If changes are needed, make sure you provide detailed written specifications.
If you are ordering raw materials like aluminum or steel, specify the grade that you want. You may also want to specify what raw materials are to be used, to minimize the risks of getting the wrong products.
For colored goods, specify the color codes. Make sure you specify the exact raw materials you want your products to be manufactured with. Send photographs whenever possible.
There is always a chance that the products you receive may not be to your specifications despite providing detailed instructions. To avoid such situations, insist on a sample before you place an order.
The first sample you receive may or may not be to your specifications. If the product does not match per specifications, note down the issues clearly and let your manufacturer know. Your feedback will help the manufacturer make changes to the product, and then they can proceed with production accordingly.
You must also give a fair idea of the number of goods that you will need. The manufacturer is more likely to pay close attention if you seem to be a valuable business source. If they feel that you may only place a small order, they may not be as responsive.
Your sourcing agent can also help in such situations. They can help you find reliable manufacturers who pay attention to detail. They will work to ensure that the manufacturer understands your specifications exactly. The sourcing agent's responsibility is to provide you with a sample product and fine-tune it exactly as per your design and specifications.
When you receive a sample product from the manufacturer, take the time to test it out. The products must work correctly and meet the requirements of your customers. You may want to show the sample to the pertinent employees in your organization so that you can get some feedback from them as well.
The safest way to source products from China is to take control of quality. If it's your first time, you may want to visit the factory personally to check the products' quality. When that's not possible, hiring an independent quality inspector is also a good idea. Your sourcing agent should help you find a reliable quality inspector, another advantage of hiring a sourcing agent.
It is crucial that the quality inspector gives you an independent report on the quality of the products. Always be careful of who you hire. Don’t hire someone without verifying their credentials thoroughly.
Hiring a quality inspector may be a good idea; however, you can’t continuously keep doing it for every order. What you need is to establish a well-structured quality control plan.
You must have a quality management plan managed by you and your sourcing agent. You may also need to make periodic visits to China's factories to ensure that your quality control plan is running as expected. Run sample inspections and never miss verifying your supplier’s quality documents. If something seems off, you may want to hire a quality control inspector again.
It is primarily your sourcing agent’s responsibility to monitor the quality of the products. However, understanding the quality controls yourself can also be a big advantage.
Understanding the following can be helpful as a client:
Affordability is one of the major charms of sourcing from China. Indeed, the low rates that you can get in China can’t be found domestically. However, you must remember that you will get what you pay for.
Cheap labor and technological advancements help Chinese manufacturers provide affordable goods. But when it comes to the cheapest goods, it is best to avoid them. Manufacturers may cut corners to give you cheap products. The quality of such products may be far from desirable.
Also, the Chinese manufacturing market is booming. New manufacturers and factories are cropping up every day. The new entrants may agree to manufacture your goods at dirt-cheap rates, but they will somehow compromise on the quality. The established factories will provide goods with much better quality; this quality comes at a higher price tag. When putting together a China sourcing strategy, you must keep pricing in mind. However, that should not be the only deciding factor.
Your sourcing agent will provide you several quotes from different manufacturers. Don’t focus only on the lowest price. Instead, opt for established factories that prioritize quality and have a proven track record of serving other companies like yours.
If you want your business to grow and the number of loyal customers to increase, you have to deliver high-quality products. You must partner only with those suppliers that provide competitive products without compromising on quality. Yes, they may cost a few dollars more, but it is well worth it.
Sourcing products from China can increase the cost-effectiveness of your business by a great deal. You can get great quality products manufactured exactly to your specifications at very affordable rates. More and more businesses are now interested in sourcing from China to gain a competitive edge and increase their profit margins.
Advantageous as it may be, sourcing from China also requires a great deal of care. Done right, it may do wonders for your business. However, if things go wrong, it can prove very costly for your business.
You must take all preventive measures to ensure that you minimize the risks of sourcing from China. Working with a trustworthy and established sourcing agent is an important step. The right sourcing agent can help you get acquainted with the ways Chinese businesses operate. You will also gain valuable insight into the different licenses and certifications you need to check before ordering products from China. Make sure that you do your due diligence before hiring a sourcing agent for your business. Finding and utilizing the right sourcing agent will quickly prove that the benefits of sourcing from China far outweigh the risks.
Sourcing Allies is a team of expert China sourcing agents that has helped western customers manufacture and source products from low-cost regions since 2006.
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