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Important Steps Involved in Global Sourcing from China

2023-12-25
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Important Steps Involved in Global Sourcing from China

In this increasingly competitive world, business owners are seeking ways to not just be creative with their products and service lines, but to also procure the highest quality products from China at the lowest cost possible.

Although buyers and sellers work on different dynamics and both need to invest time, focus, and commitment in the process, global sourcing is an efficient way to reduce cost and establish an operation chain that functions effortlessly. China is considered as one of the best destinations for sourcing products as per global quality standards.

The entire process of sourcing products from China involves below main steps:

1. Determine the products that you want to sell

Choosing the products your store will sell is the first stage in the global sourcing process. The market indications and the perception of your brand will eventually determine this choice.

You must have a strong understanding of your brand before you can start selecting products for your shelves. This will help you when you are sourcing products and building a unified storefront.

The next step is to assess the market and investigate your competitors to learn more about consumer demand and the best products for your store.

2. Analyze the products that need to be sourced

You should collaborate with people from all departments to analyze the need of sourcing the products. This should include the volume of goods required, whether they require raw materials, a component, or a finished good, and its packaging requirements.

The team also needs to analyze the logistics requirements and custom clearance permits, licenses, and regulations of both the countries involved.

3. Plan how you will get your products

It is time to start considering the product procurement once you have made steps to identify your target market and industry trends. How you are going to get your merchandise is the first thing to think about.

You have a wide range of options for retail providers, and they all function differently. The key to choosing a supplier who will economically engage with your business is having a clear vision of how you want to obtain your items.

4. Vet and select suppliers

It is important to begin reducing down your list of potential suppliers and developing partnerships once you have found a few that fit your requirements.

It is a good idea to choose various providers for each of your items while you conduct your supplier research, including a primary source and backup sources. It will enable you to compare prices and choose the seller who offers you the best bargain along with acceptable quality.

You will compare each supplier in terms of their production capabilities, costs they offer, and quality standards they can maintain.

If you are not choosing a sourcing agent, you will also have to carry to factory visits and look at the supplier’s customer reviews. Verification of the license and registration details of the supplier needs to be done with due diligence to lower the risks as much as possible.

5. Nurture good relationships with your suppliers

Once you have identified the top suppliers for your company, you are prepared to place orders and pursue supplier partnerships. After your initial purchase, as a retailer, your connection with your suppliers is likely to continue.

It is advantageous to continue working with your current partners rather than seeking elsewhere every time you need to place an order because product sourcing requires time, effort, and resources.

Additionally, as your connections with your suppliers develop, you will be in a stronger position to bargain for discounts, modifications, and credit lines.

6. Handle ordering process and quality control

Once you have selected the supplier, you will list down negotiation terms that must include purchase volume, discounts available, costs of transportation, and payment terms.

After both the parties agree to these terms, communicate the quality parameters clearly to the supplier.

In the next step, you can ask the supplier to produce and send a sample for verification.

Once the sample is verified, the final contract is made and signed by both parties, and the order is processed. You should hire someone on the ground to follow up the manufacturing process, and conduct quality inspections.

Even though there are many hurdles to global sourcing, it is getting easier with technological advancements and is still very beneficial for the expansion of the business. We can easily use global sourcing to our advantage by overcoming some of these hurdles with the following practices:

  1. Use the internet to your advantage and perform thorough research to analyze the opportunities present in the source country, shortlist the suppliers, and do a background check on them.

  2. Planning well ahead in time regarding any in-field factory visits to ensure that the production line is in sync with your quality parameters could save you a lot of money.

  3. You can take help from a professional sourcing company that is proficient in handling all the challenges listed above in their local markets.

  4. Establish a clear communication line during the entire operational cycle and pay particular attention to the scrutiny process before signing a contract.

For those who do not have an established international base for their business and are just new in the field, procurement and sourcing of products made in China can prove to be a very daunting task. The language and cultural barriers, legal and custom barriers, geographical barriers, and risks associated with the absence of a thorough understanding of the local market, could make it almost impossible for them to handle the operational chain.

Here is where a sourcing company can be of great help. They will have networks with established companies for manufacturing, sourcing, and supply chain. They connect qualified producers with international companies and ensure that the entire process is carried out through a transparent channel.

Sourcing agents make the entire experience hassle-free. They are reliable and licensed to work as the middlemen between the foreign company and the destination from where goods or raw materials are sourced. In the absence of sourcing agents, sourcing outdoor products from China or any other source country would be very difficult.

They have adequate personnel to perform major functions in the operational chain such as:

  1. They identify local suppliers who can meet the global quality standards in their services and goods.

  2. Their presence in the local markets is such that they can easily facilitate negotiations in bulk pricing.

  3. They arrange for sourcing of the samples and once approved, final drafting of the contract is initiated by them.

  4. Once the manufacturing process begins, they carry out factory visits, coordinate with logistics for packing and transportation, and perform quality checks at all levels.

  5. They do the entire paperwork that is needed for customs clearance.

In short, they take over the entire operation chain.

Indeed, sourcing agents are important in performing above mentioned activities, but one should be careful to do a thorough check about their experience in the niche market, their licenses and registrations, and reviews. You must also make sure that they have staff that can easily communicate with you in the English language and has an excellent presence and contacts in the local markets.

There is an overwhelmingly long list of producers in China, but unless you know the market in and out, it is very difficult to choose the right ones. China based sourcing company can carry out all this work for you with much ease. They will have quality inspectors who carry out quality checks during the entire production process.

Sourcing companies help their international clients procure products from China at the lowest price possible, while maintaining quality standards and timely delivery. They hire bilingual support staff and facilitate efficient communication at all stages of the operation chain. There will not be any language barriers.

Conclusion

Many companies are now relying on global sourcing as it is coming up as the cheapest procurement option. The best way to handle global sourcing successfully is by gaining some expertise in the field and by identifying the complexities involved in the production line. Come up with ways to overcome the challenges that you will face while sourcing products made in China.

Formulate the right strategy that can allow you to carry out the same operational line again and again without causing any major delays. Effective communication and focus on quality are the keys to finding success with global sourcing.

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