Over the last few years, China has become an attractive destination for small, medium, and even large companies to source quality products. 28.7% of the global manufacturing output comes from China alone. Sourcing from China can be an excellent way to boost profits, reduce labor costs, and ensure an uninterrupted supply of high-quality goods throughout the year.
Sadly, you will also see a few not-so-great stories about sourcing from China. For people who want to explore the Chinese market, these stories often act as a deterrent. If you want to make your China sourcing process smooth and seamless, you need the help of a sourcing consultant.
Strategic sourcing consultants can help you create an efficient strategic sourcing plan that can boost business growth. Most importantly, they can help you avoid mistakes that could turn your sourcing journey into a nightmare.
Let’s look at a few mistakes your sourcing consultant can help you avoid.
China is a manufacturing superpower and produces goods for several industries across the world. However, sourcing the right products is extremely important if you want your business to benefit. Market research is essential to ensure that there is indeed a demand for the products that you want to source from China.
Another common mistake when sourcing from China is finding complex products. If you wish to import jewelry made out of precious metals, maintaining the same level of quality could be a challenge. Choosing to import products that are labor-intensive means that you end up paying high labor costs. If that’s the case, getting products at an affordable rate could be difficult, which beats the purpose of sourcing.
If you wish to import custom products from China, then it is important to ensure that the product you want to make is feasible. The right sourcing consultant would have their own team of experts who could brainstorm to let you know the feasibility of your product. These experts would also help create the prototype sketches and convert them into engineering drawings. They can also help you find the right manufacturer with the right capabilities to manufacture the product.
When you partner with the right consultant, you can rest assured that you source the right products from China that can boost your business bottom line.
One of the biggest risks of China sourcing is unreliable suppliers. If you want to import OEM or custom products, choosing the wrong manufacturer could prove to be a costly mistake.
If you want to source products on your own, how do you start? On the internet, of course! Cybercrime is on the rise, and there have been multiple cases of impersonations and stolen identities. If you do not come across someone posing as a Chinese manufacturer, chances are you may come across someone exaggerating their business capabilities.
So, how do you ensure that the manufacturer has the capabilities that they are boasting of? One, you could inspect their manufacturing plant in person. That will help you see their manufacturing conditions by yourself, the materials they use, and also their quality control measures. It sounds easy if you live in China. However, if you live in another country, hopping on a flight to China may not be the most feasible option for you.
A sourcing consultant will help you find the right manufacturer for your product. The manufacturers they connect you to would have the right technological know-how to mass produce your product. Partnering with a sourcing consultant who has been in the industry for several years means that they have extensive strategic sourcing international experience. They have a wide network of reliable manufacturers who could get the job done for you, giving you the highest quality products. Working with the right manufacturer is important if you want sourcing to benefit your business.
Simply assuming that your manufacturer understands you could be a mistake, one that could prove very costly. The sales representative of the Chinese factory may speak English, but you need to remember that it is their second language. If they are not sure of your request, they may not raise a question directly for fear of looking unprofessional or, worse, losing your order. Where does that leave you? When specifications are not clear, it is quite obvious that your product will not be manufactured according to your expectations.
Besides product specifications, you may have several other requirements, such as specific raw materials or a certain level of quality. If your manufacturer does not get them right, you lose a lot of time and money.
Your sourcing consultant will ensure that the Chinese factory understands each and every product specification. Strategic sourcing consultants speak both English and various dialects of Chinese fluently. Since there is no language barrier, there is no misunderstanding regarding product specifications, the level of quality expected, or anything else.
Bargaining is quite the norm in China, and no Chinese manufacturer expects you to agree to the first price they quote. However, bargaining should be a win-win situation for both you and the manufacturer.
First of all, if you bargain too hard, some manufacturers may not even be interested in working with you. If your offer is barely profitable, you cannot expect to work with good-quality suppliers. After all, even the Chinese manufacturer is running a business like you.
Say you negotiated hard and managed to get a very low price. Do you really think that is a good deal you got? If you quote a very low price, chances are the factory will cut corners to ensure they are able to get some profit out of the deal. That means that you will not be getting the quality you were hoping for. What happens if the product you receive does not meet the safety requirements in your country? That is a giant waste of investment.
Sourcing consultants are also extremely skilled at negotiations. They ensure that you get a profitable deal without compromising on the safety or quality requirements. Since the manufacturer also profits from the deal, you would be considered a high-value customer. You may end up creating a long-term partnership with them, which could prove advantageous for your business in the future.
It is important to inspect the manufacturing facilities to understand the internal quality control procedures. However, if you cannot inspect the factory physically, how do you evaluate the quality controls? You may have found a great manufacturer, but what if their quality control measures do not meet your requirements. Their production capabilities do not match your order, and you may end up getting lower quality than the samples you initially received.
Partnering with a sourcing consultant is like having your own team in China. Sourcing consultants will have their own team of quality professionals who conduct periodic audits on the factory. This ensures that the products manufactured are up to your quality expectations. A good sourcing consultant will not wait till the end of production to do a quality audit. They will do several random audits during the manufacturing process to ensure that everything goes on smoothly. If they detect a quality issue, production is stalled temporarily till the issue is fixed.
Importers usually prefer to work with manufacturers who have several years of experience. They automatically assume that because the manufacturer has been exporting for many years, they will use the right packaging for their goods. However, that is not always the case. It is extremely important to confirm packing information, especially if you run an e-commerce business.
Your products could be shipped to you through air or sea. In both cases, it is important to pack your goods right, regardless of whether your products are fragile or not. One of the mistakes that importers make is not confirming the packaging with the manufacturer.
The responsibility of your sourcing consultant covers your entire sourcing journey, from finding the right manufacturer to shipping your goods. Your sourcing consultant will ensure that you not only find the right supplier but also receive your goods safely.
Email and instant chats are, without a doubt, incredibly convenient. With smartphones and internet access available on the go, more and more business owners prefer to use online modes of communication. However, online communication is often cold. Humans use their body language and facial expressions as well to communicate besides words. In-person meetings and video calls can help you familiarize yourself with the manufacturer, which is important to build a strong relationship. But, what do you do about the language barrier? That’s where the sourcing consultant steps in.
Since your sourcing consultant is fluent in both English and Chinese, they can be the link between you and your manufacturer. Effective communication is essential for building strong business relationships. The language barrier need not come in the way of that.
The process of sourcing can be complex, and there are several things to be taken care of. Product specifications, quality standards, packaging requirements, service terms, and numerous other things come into the picture. You have found a supplier who is professional, reliable and provides high-quality work. Yet, there could be an instance when the supplier overlooks some process, or the product outcome is not what you expected. What do you do then?
For these reasons, it is essential to document all your terms and conditions. Having a well-drafted contract is an absolute must when sourcing from China. Your contract should include all important aspects such as manufacturing time and quality control expectations. Missing out on even one crucial aspect could leave you open to legal problems.
The right sourcing consultant not only helps you in creating the right strategic sourcing plan but also the necessary documentation. That means that they will ensure that the contract contains all important details, right from the raw materials to be used to shipping terms. There’s more. Your sourcing consultant will negotiate not only the price but also the terms and conditions of the contract. When you work with a sourcing consultant, you get not only the best price but also the best terms.
Assuming the wrong shipping costs is yet another mistake that many importers make. Airfreight is definitely costlier than sea freight. However, just because your products are being shipped by the sea does not mean you will pay a substantially low price. In most cases, when you ship by sea, you pay for the container. If your container is entirely packed, you may end up saving costs. However, if your product quantity is less, you will still need to pay for the entire container. Plus, you should not forget to factor in the customs fees.
Yet another shipping mistake that many importers make is incorrect paperwork that could end up delaying your shipment. The shipping of products could be delayed for several reasons, such as the pandemic or natural calamities. That’s not in our control. However, the right paperwork is. An incorrect customs declaration or incorrect paperwork is one of the many reasons why shipments get delayed. A simple error such as the wrong product description could cause your cargo to get stuck in customs clearance.
Your sourcing agent does all the necessary paperwork for you, and that includes all the paperwork related to shipping too. Since they handle paperwork almost every day, the chances of error are greatly reduced. When you work with a sourcing consultant, you can avoid paperwork-related delays and also save on unnecessary costs, such as late warehouse charges.
When you source from China, you are basically carrying out an international transaction. Like any other transaction, it carries its fair share of financial and legal risks. Strategic sourcing consultants can ensure that the entire sourcing process from China goes off without a hitch. Your sourcing consult can help you develop a robust sourcing strategy, vet manufacturers, evaluate samples, handle negotiations, paperwork, and so much more.
Importing from China can be extremely profitable. The right sourcing consultant can help you avoid costly mistakes, allowing you to scale your business seamlessly.