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elksourcing · 5 years ago
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Elksourcing: China sourcing agent 
 Today’s Procurement Product Case: Bathtub Shelves
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elksourcing · 5 years ago
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Elksourcing: China sourcing agent
 Today's procurement product case: European and American fast fashion women's clothing
  #Amazon  #shopifyDropshipping #china_sourcing_agent
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elksourcing · 5 years ago
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Elksourcing:Common Mistakes to Avoid for Sourcing from China
China economy presents lucrative business opportunities for entrepreneurs in United States and other foreign markets. While there are some risks to sourcing goods from China, you can manage and reduce these risks with a smart and methodical approach. Below are the common mistakes to avoid for sourcing from China:
1. Failing to define a sourcing strategy.
When sourcing goods from China, you must have a well-defined sourcing strategy, this includes conducting proper due diligence about who you are dealing with, including intermediaries and manufacturers. You need to know what types of products you need, how much you can sell those products, how much you can afford to spend on those products, and by what date you need the products. You should also have a plan in place for quality control.
An experienced China sourcing agent can help you put together a strategy for sourcing goods in China.
2. Failing to define quality standards for suppliers.
Before you search for suppliers, you must have a general idea of the quality standards your company expects a supplier to meet. The better you define these standards, the easier it will be to determine whether your sourcing efforts are successful.
Once you have identified and defined your expectations of suppliers, you should only seriously consider those suppliers who are able to meet your needs. An experienced China sourcing agent will have existing relationships with suppliers and can help you determine whether certain suppliers are right for your company.
3. Treating international vendors like domestic vendors.
Many clients forget that sourcing from China isn’t like buying from a local supplier. You must plan ahead, take into consideration for production time, and the time it takes to ship your products by sea, which can take another 4-5 weeks, depending on your location.
4. Not getting things in written.
All negotiations between you and your supplier should be in written. Your contract should include important information such as the parties involved, QTY and price, definitions of product quality, production ready date, delivery expectations, and payment terms. It’s especially important to get all of the product specifications in written up front, including dimensions, tolerances, material requirements, and packaging.
An experienced China sourcing agent will be able to help you with all of this.
5. Language barriers.
It is very important to have someone on your China sourcing team who speaks Chinese. In cross-border transactions, you cannot depend on shoddy translation. Language barriers often result in failed business deals!
Find someone you can trust to communicate with suppliers on your behalf in Chinese, preferably a native speaker. A China sourcing agent who has proven experiences can help you overcome language barriers.
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elksourcing · 5 years ago
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Elksourcing:China Remains a Major Sourcing Destination
There have been countless articles about China’s reign as factory of the world coming to an end. While it is true that wage increases are making some of China’s lower-end industries, such as textiles, out to low-cost countries such as Viet Nam and Bangladesh, China remains one of the top procurement sources for mid- to high-tier products. Even as some of the lower-end industries move out, there is more to a country’s competitive supply chain than labor costs. China maintains a set of key factors that will continue to make it a competitive exporter even as the economic landscape shifts.
High-quality Infrastructure(Especially Export-related Infrastructure):
China’s rail and road infrastructure, particularly along the coastal cities, are among the most developed globally. With a history of double-digit investment rate every year in infrastructure, China’s ports complement the rail/road infrastructure. Shanghai long surpassed Singapore as the world’s busiest port and it will be a while before key competing countries can match China’s current (and continuously developing) infrastructure.
Increasing Qualified Labor Force:
China produces hundreds of thousands of graduate engineers and scientists each year to be absorbed into the local industries. Moreover, China now has the world’s largest student population studying overseas with a sizeable number returning upon completion of their studies. Although there has been renewed attention to quality rather than quantity in the number of graduates, the increasing education level will boost China’s competitiveness vs some of the other low-cost sourcing destinations.
Growing Research and Development Expenditure Leading to Higher Innovation Capacity:
Despite the reputation for copying, China’s innovation has continued to pick up pace. A report by McKinsey & Company highlights innovation in areas such as renewable energy, consumer electronics, instant messaging and mobile technology. As internal and external competition increases, China is also focusing on price reduction, adaptation of business models and supply chain development. This will lead to the elimination of less efficient firms, both domestically and those focused on the export market.
Lower Costs Comparing to Industrialized Countries:
Despite double-digit growth in both wages and currency appreciation during the past decade, China’s minimum wage still stands far below that of industrialized countries. Rising wages are correlated with increasing productivity. Therefore, countries competing with China for lower costs will have to also compete with increased productivity and vice versa.
Specialization, Not Only at Sector Level, But Also at Product Level:
China’s specialization in various products remains unparalleled globally. There are entire towns dedicated to producing a single product. For instance, Pearl River Delta is known for electronics industries, whereas Shenzhen has become the IT hub of China. Moreover, the product range available in these agglomerations is diverse, catering for low- to high-end products, resulting in differentiation as a key competitive factor.
Pro-export Policies:
It is true that the Chinese authorities have decided to alter the export-led growth model to one focused on domestic consumption. However, the country’s “going out” policy continues to have explicit support (via export rebates or subsidies) or tacit support, especially at local level. This support will continue to boost Chinese exports’ competitiveness –at least in the short term.
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elksourcing · 5 years ago
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Factory, Trader, Sourcing Company: Which is Better?
There are many commonly held beliefs in the west about getting a factory to manufacture your goods in China. It is true that you can vastly reduce your production costs, even when you have to ship products halfway around the world.
But it isn’t true that dealing directly with factories is always the best way forward. Let me tell you the pros and cons of factory, trading company and sourcing company, so you may know which is right for you.
Factories are often seen as the best and only source for your goods. You can communicate your needs directly with them and, if they are the right factory for you, they will have a high level of expertise in the manufacturing process and you should be able to rely on this from order to delivery.
Factories will make your goods to your specifications and within the tolerances you demand. The factory you choose will have probably been making similar goods for some time – you wouldn’t want a smart phone case factory to build the smart phone itself!
Finally, cost is frequently the main reason people go to factories direct as it is often thought that you will get the best price by that route (this isn’t always the case, as will be discussed when we look at trading and sourcing companies below).
Where you have decided to go to a factory, you must be aware that in China it is quite common for trading companies to try to masquerade as manufacturers, and they often will try very hard to fake for as long as possible. Though there are good reasons to go for a trading company, particularly if they are upfront about being one, if you specifically want a manufacturer here are either ways to smoke them out:
Ask them outright if they are a trading company or a manufacturer. Often trading companies, particularly the ones you may wish to work with, will come out and say that they are immediately.
If they do say they are a factory, tell them you’d like to pay them a visit. Manufacturers will leap at the chance to show off their factory and try to set up a date to meet, where someone with something to hide may be evasive and not be too willing to let you pay them a visit.
Look at their product range. Manufacturers will tend to specialize in a much narrower range of goods according to their tooling and expertise. Trading companies will have a network of contacts so will have a far greater range of products on offer. Rather than investing their resources heavily in new lines, they can just pick up the phone to a specialist factory and get them to make the product.
Is their listed mailing address on the outskirts of a city or is it an office in the central business district? As with western cities, manufacturing areas tend to be on the outskirts where the land value is lower. A trading company however only needs an office and could well be in a central location of the city.
How much do they know about the production process? A factory boss will know his lines intimately and be able to give good answers to good questions. A trading company will give much vaguer answers. A very detailed knowledge of the product on your part will go some way to persuading them that you are a serious buyer as well.
Ask for a third-party factory audit. There are specialist auditors in China who will examine the contact’s claims and research the factory, as well as any certification they have, before you sign anything with them. A trading company might be evasive about this, as they would be reluctant to disclose their sources.
Trading Companies
Trading companies are sometimes seen as an expensive and unreliable way of getting your product made. This is not always the case, and despite what you may have heard the trading company route may be the right one for you if your circumstances are a good fit.
One of the important differences between sourcing companies and trading companies is that trading companies will have a high level of expertise in a specific field. With multiple importers wanting similar goods, and a number of factories that make those goods, the trading company may well have a level of expertise that is close to that of the factory themselves. They may be able to advise you as to how to customize your product and improve its salability, which again could boost your bottom line when it comes to selling the product.
They will act as middle men. The good ones will have a number of contacts with factories in their region, and may well be able to get your product at a lower price per unit than going direct to a manufacturer because they will be able to achieve economies of scale as they can bolt your order on to an existing line of very similar goods. This is one of the strengths of going to a trading company – they can get a far lower price per unit than you might be able to at the scales you want to order.
One of the issues to look out for is that unlike sourcing companies, trading companies should be considered as being on the side of the factory should any dispute arise. They will be your point of contact at the factory – not the factory itself. They will often seek to protect their manufacturer’s interests; the lines of communication will be longer and disputes harder to resolve.
Sourcing Companies
Sourcing companies, work on your behalf to source a manufacturer and deal with the issues that arise in China. Unlike trading companies their loyalty will be to you rather than the factory, so when a dispute arises they will represent your interests.
As with trading companies the sourcing company will have a number of existing relationships with factories. Though their position is more on your side of the line, they will deal with the same factories on a regular basis and like trading companies, will often be able to drive some economies of scale into the final cost per unit.
One of the main advantages the sourcing companies should have is their grip on quality control processes that can be applied to a great range of products. This should include contracts in Chinese, inspections, follow-up and putting together a QC system in place. They can ensure that your product matches the specifications you have set and tackle any disputes on your behalf.
Sourcing companies specialize in the supply chain (logistics) as much as the production process & understand international logistics as well as compliance requirements better in most cases. A good sourcing company should be able to take over your entire sourcing process, right from finding the factory, to Chinese contracts, inspections compliance and logistics to your door. This would allow you to focus on your sales & marketing operations through the significant time savings achieved. A trading company might be better at reducing the factory price per unit, but a sourcing company might be able to drive greater savings in your supply chain overall.
Which Type is Right for You?
So how do you decide whether you should be working with a factory, a trading company or a sourcing company?
This decision is unique to each importer and is based on several factors, such as:
Experience importing from China,
Knowledge of import regulations & processes,
Size of your order (Total order value, as well as order value per product and per supplier),
Resources available to manage the import process.
If you are a large buyer that can comfortably meet the factory’s MOQ, have a good knowledge of the import processes & compliance requirements and have the time & resources required to manage the back & forth communication and order follow-up with the supplier, including order follow-up, you may consider a factory.
If you have larger orders and can meet MOQ, but are short on experience, you can go to factory direct and still work with a sourcing company as your nominated representative on the ground to manage the operational process as well as your risk and quality requirements.
If you are looking to buy a wide range of “related products” within the same industry but your quantities are not large, a trading company can be a good option for you. Trading company’s specializing in a given industry would often develop a wide product range with their products being manufactured at several different factories, thereby giving you the choice to carry multiple products in the same niche and at the same time being able to import smaller quantities per product.
As above, you can also use a sourcing & QC company to manage your risks, due-diligence, project management, quality control and logistics requirements when working with a trading company.
Finally, you can use a sourcing company in most of the scenarios mentioned above, especially if your order QTY is not large and related to wide range of products. Sourcing companies are in a better position to find direct manufacturers and skip trading companies which often dominate B2B portals.
As sourcing, quality control & project management process is highly time-consuming and often requires presence on the ground (for example factory audits, inspections, manufacturing control, container loading, etc.), importers of all sizes often use a sourcing company to work on the entire sourcing process so they can focus on their sales & marketing endeavors.
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elksourcing · 5 years ago
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Why do China suppliers need MOQ, we help you solve this problem
Minimum Order Quantity (MOQ) requirement specifies the lowest quantity of a certain product that a supplier is willing to sell. If the importer cannot reach the MOQ requirement, then the supplier is not willing to enter production. Suppliers in China tend to have fairly high MOQ requirements. Why Chinese Suppliers Require MOQ? What can you do about it?
Reason 1 – Low Profit Margins Require Large Volumes
Chinese suppliers tend to have very low profit margins, as low as 2-3% is common. Price competition is fierce and Chinese businesses in general tend to be focused on keeping a low price rather than improving product quality and service level. Low profit margins require the supplier to produce a large quantity of products in order to break even.
Reason 2 – Material Suppliers also Require MOQ
I’m sure most Chinese suppliers would be happy to do business with smaller buyers if they could. In fact, I know that many of them dislike the fact that a high MOQ requirement forces the suppliers to rely on a smaller number of large companies that could walk away with their business without notice. The problem is that the MOQ is not decided by the supplier alone, but also by its subcontractors. Every supplier need to purchase materials and components from local subcontractors, and every subcontractor requires the supplier to purchase a certain quantity. The supplier’s MOQ requirement is thus a reflection of the MOQ requirements imposed by its subcontractors.  
Reason 3 – China Suppliers Rarely Keep Stock
A common misunderstanding is that Chinese suppliers have warehouses filled with export quality products ready to be shipped to the next buyer. It’s not true. In fact, most Chinese suppliers don’t even purchase materials and components until an order has been placed. Below I explain why:
Storage is not free and keeping a large stock would force the supplier to increase the prices. Empty shelves helps the suppliers to keep costs down and stay competitive. European and American product standards (i.e. CE, RoHS and FCC) don’t apply in the other parts of the world. While many Chinese suppliers are manufacturing products that are in compliance with Western product standards, they are certainly not mass-producing them before they receive an order from an American or European buyer. Product standard compliance comes at a cost (more expensive material and components) and it would leave the supplier at a disadvantage if they mass-produced products that are compliant with Western standards.
How can you lower MOQ?
The MOQ requirement cannot simply be negotiated away or vanish. While some suppliers may accept a slightly lowered MOQ, requesting it to be removed completely is the same as asking your supplier to lose money for the sake of your business. Many importers try to play the “my orders will be larger in the future” card, but most suppliers hear this on an almost daily basis and only a fraction of their buyers can back up the claim in the end.
However, there are ways that can satisfy the supplier at the same time as you can order a smaller quantity:
Use components, materials and colors on several products. This way the supplier can limit the number of subcontractors involved. Coordinate your orders with those of other buyers. Import products that are not regulated in your country and/or market. This way you can purchase products that are originally produced for the Chinese market.
Give it to a purchasing agent to help you find a manufacturer that does not have a minimum order quantity
This is the advantage of purchasing agents. elksourcing procurement agents have more than 10 cooperative and stable manufacturing plants. Every day there are purchase orders from manufacturers in different countries/regions. Therefore, the manufacturer has no minimum requirements for increased orders. Therefore, 1688ToWorld can help sellers who have just started business to start your business with the lowest order quantity and open the trading market smoothly.
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elksourcing · 5 years ago
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Steps to Get Your Own Products Made in China
China is always the first place you need to consider, if you have an amazing idea for a product that you believe will do well on the market. However, it is not easy to make an idea to reality, if you do not follow the right practices, you may suffer in loss of money and time. In this article, we share you the right steps to get your own products made in China.
1) Getting Drawings and a Prototype
You need to get this idea made into engineer designs and a prototype. It is crucial you get both done; it can be difficult to manufacture a product without an engineer drawing that has tolerances, bill of materials, and technical requirements. You need a prototype, so you know your product is functional and looks good. You can do this in China, but it is not easy. Communicating with an engineer in China over different time zones can be difficult enough, but when there is a language barrier, the challenge is compounded as difficult ideas and concepts can be hard to translate. Progress is much slower because of this. It is recommended that you get your design and prototype completed in America. We can help you get started on this process if you need help finding an engineering company.
2) Finding a Supplier
Okay, so now you have a good prototype with clear and exact engineer drawings. The next thing you need to do is find a factory in China that can produce your products. You basically have two options, find one yourself, or get a sourcing company to find one for you.
You may think that getting one yourself may be the cheaper solution, because you don’t have to pay a commission. In actuality, it is often more expensive. If you choose to get one yourself, you must learn the culture, fly to China, and start building business relationships over time. You would need to look for factories that have the capability to manufacture your product and keep your level of quality. You would need to visit their actual location. Just googling Chinese factories doesn’t work because many “factories” have websites but are really just a front some scammer setup out of his apartment hoping to con westerners out of their money. They could also be a real factory but may steal your product and sell a knockoff version. After a lot of flying around China while paying for a translator, you will be out a large chunk of money, with no guarantee of success.
Using sourcing agents can simplify things as you no longer have to deal with cultural differences, language barriers, time zones, the risk of getting burned by a fraudulent factory, and a whole lot of jet lag.
What makes a qualified sourcing company? Well, for one thing, the biggest isn’t always the best. Alibaba has had a number of issues over the past few years as published in many articles. A good sourcing company will have skilled people in China who either are Chinese or know the culture and language fluently. They have a longstanding history of protecting intellectual properties and know how to find qualified factories. They are responsive, pay attention to detail, and will ask a lot of questions about your situation to get a clear picture. They will help you through the import process and have a replacement policy for defective products. Sourcing agents should be upfront about fees and will work to fix any issues that occur.
3) Getting a Quote
When you find a sourcing company you like, you will need to provide them with your engineer drawings and other information such as: your shipping location, quantities to quote, packaging and labeling instructions, so they can tell you how much it will cost to produce and ship your product. Also, make sure you provide the company with any additional requirements you need your product to pass such as U.S. consumer certifications. It is a good idea to get exact quotes and not shop around for ballpark figures, so you have reliable numbers. It is important to note that cost, while important, should not be your main reason to pick one quote over another. Choosing a company that is responsive, reliable, and reputable will save you more money over the long run.
4) Purchase Order
Now you have a quote that includes sample, production, and shipping charges, along with estimated production times, you should be ready to place a purchase order. Some companies offer a third-party inspection service which may be a good investment if this is a first order or you are buying a large order. At this point, you should have been provided information about marking your product as “Made in China”, various import fees and paperwork you should expect, and you should either have your own customs broker, or have had one referred to you. Make sure the factory will make and send a sample to you before you move to production so that you will know the level of quality you will be receiving. You should also review their replacement policy.
5) Receiving Shipment
After you have signed a purchase order, you should receive a sample for approval. If there is something wrong with the sample, bring it up with your sourcing agent and have a corrected sample sent over. When you approve the sample, you should expect to pay a portion of the production order up front, and the balance when the order is ready to ship. You should expect to have to file some paperwork. Many companies will ship your products to the port you chose, and you may be responsible from shipping it from there to your door. Make sure you inspect your shipment, and the right quantities were received.
After following these steps, you should have an awesome product ready to hit the market that you can be proud of and can enjoy the success in business.
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elksourcing · 5 years ago
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Advantages of Hiring a Sourcing Agent
Are you interested in sourcing products from China? If that’s the case, you have two options – you can either take the trouble of handling all the sourcing activities, or you can hire a sourcing agent China. Calling the suppliers, verifying authenticity of suppliers, negotiating prices, conducting paperwork, and making a deal are not easy. It is a tedious and time-consuming work for business owners. But, if you hire a sourcing agent, you can give attention to important aspects of your business. The followings are the benefits of hiring a sourcing agent for procuring from China.
Passes on knowledge about local suppliers
By approaching a sourcing agency with offices in China, you can learn about different suppliers and their fields of expertise. The agency experts can speak in the local language and can easily communicate with the suppliers. Sourcing agents are linked with major players in the suppliers’ market and can verify suppliers’ credentials. Their knowledge assists you to choose the most reliable and efficient supplier in China.
Helps reduce expenses
You may think that by handling sourcing activities on your own, you can save the money. However, visiting China repeatedly to address different purposes can lead to huge expenditure. Moreover, your lack of knowledge about the suppliers’ market in China can make you an easy target of exploitation.
A sourcing agency with offices in China performs all the necessary tasks related to your sourcing needs. A sourcing agent China closes your deal at the best price. Ultimately, you can save money and use it for further development of your business.
Ensures quality supply
Chinese sourcing agents can speak the local language. Therefore, they can communicate clearly with suppliers. Proper communication convinces the supplier that the agents are locals and thus, cannot be taken advantage of. They visit the supplier’s warehouse to check the quality of products at their disposal. The agents make sure that the products reach you in sound state and not in broken condition.
Reaches solutions to on-floor warehouse problems
It is natural to face problems in an overseas sourcing transaction. You cannot keep stalling important business meetings or other essential work to visit China every time the supplier needs you. Sourcing agencies make sure that the issues are solved in time, so that you don’t have to travel to China repeatedly. They send representatives to the supplier’s warehouse to address issues and offer you efficient service.
You might have to pay a certain amount to the sourcing agent as remuneration. However, you are saved from incurring hidden costs that are involved in directly dealing with factories. Dealing with a good sourcing agent is time-saving and cost-efficient. Also, you don’t have to involve yourself in lengthy sourcing activities.
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elksourcing · 5 years ago
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Elksourcing:Inspection by Yourself vs. a Professional Inspector
There’s perhaps no better way to avoid receiving substandard goods than by inspecting them before they leave the factory. Inspection gives you the opportunity to find any problems and have them fixed before you receive the order. And there are a few different ways you can conduct inspection. One way is to personally travel to the factory manufacturing your product and inspect by yourself.
Inspecting on your own can work well for some importers in certain circumstances. But most importers don’t conduct product inspection themselves. Let’s look into the main reasons why inspecting on your own may or may not be your best method of ensuring your product meets your standards.
Why some importers prefer to inspect on their own
There might be several reasons why you’d choose to take it upon yourself to inspect your own product, such as:
You feel since you’re an expert in your product, you’re the best person to inspect it;
You think hiring a professional inspector to visit your supplier’s factory and inspect on your behalf will be too expensive; and
You don’t know what other options you have for checking the goods before shipping.
But as well see later on, these aren’t actually great reasons to perform inspection yourself. There are, however, a couple common advantages of personally going to the factory to inspect:
Inspecting the first order from a new supplier
Some importers find it beneficial to visit a factory to inspect the first order from a new supplier. This gives you the opportunity to meet with contacts at the factory and discuss any product inspection concerns or requirements in person. Some importers, especially those with a lot of experience with their product, will find they can more easily suggest solutions to quality problems by seeing them firsthand in the factory.
Training QC staff on special inspection procedures
Another valid reason for participating in product inspection yourself is to train inspection staff. Whether you’re relying on factory QC staff or hiring third-party inspectors, it can be helpful to observe the inspection process and provide feedback on-site. For example, you may want the inspector to use a testing procedure or standard other than the one they might typically use. And although not always necessary, it may help to explain the procedure to them directly.
Why most importers choose to hire someone locally to perform inspection
You may be tempted to visit your supplier’s factory to inspect each order before it ships. But most importers don’t conduct product inspection themselves. Instead they often prefer to hire someone else to inspect locally on their behalf. In doing so, they typically benefit from three main advantages:
1) Cost & time savings
Costs can add up quickly when traveling to a foreign country to visit a factory. Transportation, hotels, meals, gifts and translators are all potential expenses you’re likely to incur when traveling to inspect on your own. Inspections performed inefficiently can raise costs as well.
Aside from financial costs, time spent traveling and checking the product is another factor to consider for inspection. For example, an importer traveling from New York to Shenzhen, China would likely board a 13 or 14-hour flight to Hong Kong. Then they’d need to cross the border to Shenzhen and arrange transportation to the factory. Add in the time needed to inspect and return home and you’ll basically be occupied for a few days to a week.
Hiring a professional inspector to visit the factory for you reduces these costs significantly because the inspector is typically locally-based or at least resides in the same country where the factory is located. You might spend one or two thousand dollars traveling to and returning from China. But you’d spend much less time and money by hiring someone in China to visit the factory and inspect your goods. You’d simply arrange the inspection and wait for their report.
2) Professional experience with product QC
Some importers think that being an expert in a product makes them the best person to inspect that product. But unless they have a strong background in product quality control, it usually doesn’t make sense for importers to personally inspect their products every time.
Properly inspecting a product requires knowledge that someone only familiar with the product design or requirements may lack. For example, importers often don’t know how to effectively pull random samples or use an acceptable quality level (AQL) that yields the most transparency. They may also be unfamiliar with the types of on-site testing recommended or required for their product.
But experienced product inspectors generally do have the relevant knowledge. And importers can often hire inspectors with experience in their specific product type, such as electronics products, cutlery or electrical appliances.
3) Improved communication with suppliers
The last issue with inspecting on your own is sometimes overlooked but quickly realized –communication challenges. Communication can be difficult even when you speak the same language as your supplier and their factory personnel. There are a few potential reasons for this:
Sales staff often lack technical knowledge
You might find it difficult to communicate with a supplier if you’re talking to a salesperson with limited technical knowledge.
The salesperson is often responsible for relaying vital information to the production manager in the factory. Important product details, such as dimensions, tolerances, requirements for parts & materials and others could be lost in communication. The problem could be more complicated if your supplier is a trading company located in one city, while the factory actually making your product is in another.
By hiring someone locally to visit the factory for inspection, you can typically rely on that person to communicate issues with factory staff. They can help you clarify product requirements and other misunderstandings that often arise between importers and their overseas suppliers.
Misunderstandings caused by cultural differences
It may seem that cultural differences can only lead to harmless missteps in etiquette. But a lot of importers find cultural differences to be a real challenge to their success.
In East Asia, one of the main issues you’re likely to encounter with suppliers is their reluctance to deliver bad news. Suppliers here often want to avoid confrontation or disappointing a customer. So instead of telling an importer directly that their order will be delayed, for example, they often wait until the importer discovers this on their own.
Another example of cultural differences that can lead to problems is the concept of saving “face”, which can make some people reluctant to admit when they don’t fully understand something. A fear of seeming incompetent can keep some suppliers from asking important questions or asking you to clarify aspects of your order. Hiring a local inspector to visit the factory can help limit this and other communication problems.
Conclusion
Every importer is different. What works well for one might not work for another. Across the variety of importers, some may feel personally inspecting is the best way to handle their product QC. And it can be, particularly when dealing with a new supplier.
But generally, importers don’t conduct product inspection themselves. They realize the value of hiring professionals to handle most of their inspections. Not only is it more convenient, but it usually saves money and time when compared to personally inspecting each order. It also takes away the hassle of travel and eliminates any chance you’ll miss any defects for lack of inspection experience.
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elksourcing · 5 years ago
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Elksourcing:4 Tips to Keep Product Costs Down
As a Startup, with limited resources, time and money are working against you. In order to succeed, you must go the most out of the small funds you have. Below 4 tips will help you to keep your product costs down when importing from Asia.
1. Focus on one or two products.
Don’t try to start off by launching an entire collection of products – especially if these are so different that they require separate manufacturers.
Every product is an investment, in terms of time and money. Finding the right manufacturers, drafting specifications sheet and buying samples, take a ton of time and quite a bit of money.
If you spread too thin before you even have something to put on the market, chances are that you’ll never get there in the end.
As a Startup or small business in general, your only strength is your expertise. You must be focused on one product if possible.
2. Keep your design simple
It’s typical that Startups, be in software or e-commerce, run out of money as they try to perfect their product into infinity. As you launch a product, you cannot afford to get hung up on features that don’t really matter.
I’ve seen time and time again, how importers set design and functional requirements, that are either very expensive to reach – or even impossible.
In most cases, this is due to a lack of experience. There are physical limits to what can be done in manufacturing.
Also, too many design details or functions increase the risk of severe delays, or even failure to produce a single product sample.
Indeed, you should not compromise on design requirements and functions that are core to your business model. That said, keep things as lean as possible – and further develop your product once it’s proven on the market.
3. Don’t spend too much on new tooling
Every custom designed piece of metal or plastic requires an injection mold. The more custom designed pieces of metal and plastic needed to assemble your product, the more money you’ll end up spending on tooling.
If you want to keep costs low, you should try to use existing tooling to the extent possible. For example, you could put off a new product packaging design until the next order.
4. Start out with just one target market
The United States and the European Union have different sets of regulations. So does Korea, Japan, Russia, Singapore, Nigeria and India.
For every market you attempt to enter, you need to provide a new set of compliance documents and test reports.
This takes time and costs money. Third-party laboratory testing is not cheap. In fact, it’s a major expense on many importers’ balance sheet.
Testing costs are charged based on the number of products, or materials, and the number of different regulations (to which a product shall be checked).
In short, you’ll save yourself a lot of time and money if you decide to focus on one market to begin with.
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elksourcing · 5 years ago
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Elksourcing:Procurement Professionals Have 5 Attributes in Common
During my work in China sourcing industry for about 20 years, I’ve met many procurement professionals. I noticed that qualified procurement professionals have 5 attributes in common.
1. Excellent communication skills
The procurement department often finds itself at the crossroads between multiple stakeholders: suppliers, customers, management, sales, etc. (If you need help identifying your company’s stakeholders, check out this article.) Excellent communication is essential. A procurement professional must be able to express him or herself clearly in writing and in conversation. Of course, a good communicator must also be able to listen in order to better understand the needs and perspectives of colleagues and suppliers.
2. Savvy negotiation skills
This skill goes hand in hand with communication skills. The ability to negotiate doesn’t just refer to the ability to get something at the cheapest possible price; negotiations usually involve conversations about quality, delivery date, future relations, and more. A good negotiator knows how to get the best value from a supplier while still maintaining a positive business relationship. Also, knowing when to take negotiations out of the boardroom and onto the golf course or into a more relaxed, social environment can be a key attribute as well.
3. Ability to prioritize
A great procurement professional knows how to prioritize. In a busy office, there will often be many fires that need to be put out all at once, so to speak. While the ability to multitask may come in handy, it’s absolutely useless if you don’t understand what tasks are more important than others. This skill can be honed with experience, but it may be difficult to teach. Being able to prioritize successfully means being able to efficiently analyze potential worse case scenarios and quickly rank which tasks need to be dealt with immediately and which can be put off until later.
4. Integrity
Integrity is important to many professions, but it is especially important in procurement. Integrity means doing what you say and saying what you mean. Integrity helps professionals become leaders within the company and well respected by those they deal with outside the company. Integrity also implies a sense of reliability; if they say they will get the job done, they’ll do it.
5. A positive attitude
A positive, can-do attitude may be the most important attribute of all since it can’t be taught. Look for someone who approaches problems as exciting challenges rather than tedious tasks and views procurement as an essential component of the company rather than a necessary evil. If they don’t see their job as important, how will they convince colleagues in other departments to follow through with the procurement process?
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elksourcing · 5 years ago
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Elksourcing:12 Common Mistakes of Importing from China
During the daily practice of importing from China, I’ve learned 12 common mistakes from various clients I dealt with. Here are the details:
1. Looking for the lowest price
If you purchase something below market price, you are taking very high risks. Either quality will not be up to your standard, or you are about to get scammed.
2. Letting the supplier ship without checking product quality
Once a production batch is on a boat, it’s too late. Verify quality yourself, or pay for quality inspection services. And do it systematically, at least for the first 5 shipments (after that, you can do random skip-lot QC).
3. Failing to realize that pre-production samples are selling tools
Many buyers who are surprised that samples are not representative of bulk production. But getting an order and a cash deposit is one thing, and manufacturing the goods is another thing! Your job is to check whether production is up to the pre-production sample.
4. Displaying obvious distrust towards one’s suppliers
One of my clients does this. Her suppliers hate her, and they often get into arguments. You need your suppliers (1) to have a good image of you, and (2) to know that you care about them. If not, nobody will look after your production in the factory.
5. Not keeping two weeks of padding in the shipment schedule
There will be delays, with a certainty comprised between 30% and 90%. So plan for it. Bonus: even worse than failing to plan for delays, is pushing the factory to reduce production time.
6. Paying everything in full while one still needs leverage
Some purchasers get a really good feeling about a supplier, and agree to wire 100% of the order amount in advance. Then the manufacturer has no incentive to hurry up or to produce up to the standard. If quality issues are uncovered (and that’s only if they allow for an inspection), the factory might refuse to rework the goods.
7. Accepting to be left in the dark regarding your own supply chain
Do not rely on a middleman, upon which your whole company’s success rests. Qualify the factory, if possible get to know/approve the sub-suppliers. You will make it up many times in the long run. It is so basic, but so many people get this wrong.
8. Forgetting to describe an essential product attribute, or even the entire packaging
If you don’t specify your expectations in detail, a factory technician will take the decision for you, based (most probably) on cost savings. And you will not even be able to protest when you notice it.
9. Hoping that an unsatisfactory manufacturer will get better over time
Per my experiences, it is a bad idea to give a second order to a factory that just produced substandard quality. Rather than rolling the dice (when the odds are 90% against you), nurture a backup manufacturer.
10. Not registering one’s trademark when buying from China
Do you want a competitor to force your manufacturer to stop production? Do you want a supplier to sell your goods on the local market? If not, pls register your IP.
11. Not having a contract
A contract that can be enforced locally is important. There are various strategies to adopt in “non-cooperative” situations, and you can adopt them. For example: “take little steps” (issue small orders at beginning), “verify constantly” (quality inspections) and “use a third-party” (for example, to use a verified sourcing company to monitor your suppliers).
12. Trying to manufacture small quantities in China
It will usually push you in the arms of small trading firms that deal with small workshops. The result in 90% of cases: quality disasters and/or long delays. But there is a solution, if you can purchase non-customized items: produce them in coordination with a non-competing importer. Hard to pull off, I admit, but worth giving a shot!
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elksourcing · 5 years ago
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Elksourcing:What Make a China Sourcing Agent Outstanding?
Many importers know the importance of using a China sourcing agent but feel frustrated to find the right one. In this article, I want to share you the key factors which good sourcing agents commonly possess.
1) Local Office in China
Sourcing agents are expected to be your representatives in China – your boots on the ground and the reason you don’t need to fly to China regularly or spend time and money setting up an office there. An agent with a local presence will be able to quickly find you a reliable supplier. Their local staff will also negotiate prices with the local factory owners, resulting in better pricing.
China-based sourcing agents bring several other advantages. They will be able to steer you away from unreliable suppliers or scams. Once they help you finalize a supplier, they will take care of the documentation, draw up payment terms beneficial to you, help you assess and approve samples, conduct in-process quality checks and resolve problems that happen during production, do pre-shipment quality inspections. Again, to do all of this reliably and efficiently, they have to be present on the ground in China.
2) Excellent Communication Skills
Many stories have been posted on internet about the communication challenges western businesses face in China. These are not just related to the fact that China lies in a different time zone or that its people speak a different language, but also to its cultural quirks. A good sourcing agent will not only be familiar with Chinese, but also be acquainted with the country’s cultural differences, allowing them to guide you through the minefield that these differences can be for importers.
A good sourcing agent will anticipate that this may happen and spell out all your requirements to the supplier to ensure that they have completely understood your requirements.
3) Experience in China Sourcing
Experience is especially valuable in sourcing because of the risks involved. If you are a small to medium enterprise, sourcing from a country halfway across the world from you is a risk – with both your money and your reputation on the line. If your consignment is delayed, for instance, it will not only affect your inventory but also upset your customers, hurting your revenue and reputation in the long run.
Hiring an experienced sourcing agent – one who has been in the business for at least 10 years – will protect you against these risks. These agents have several advantages:
They will usually have a bank of reliable suppliers they have worked with before, allowing them to quickly identify a supplier who can give you exactly what you need when you want it.
They will be aware of the strengths and weaknesses of these suppliers. They will know, for instance, which supplier to pick in case your product needs further development, or which one to pick if it is imperative that your product has a super smooth finish.
They will know what you need to do to protect your IP rights in China.
They will be able to anticipate what can go wrong with lead times. They add extra days or weeks to lead times, for instance, because of local disruptions caused by festivals such as Chinese New Year.
They will know what HS codes to put on your consignment, protecting you from expensive and frustrating delays that incorrect shipping codes cause.
Such agents will also be able to tell you if your expectations, say, with regard to quality, are too high, or whether your design is too ambitious to fulfill technically. This knowledge will save you time and effort.
4) Know the Products You Want to Manufacture
There are millions of products you can source from China. It will be difficult if not impossible to find a sourcing agent who is an expert in all of these industries. But what you can do is find a sourcing agent who is an expert in the process used to manufacture your products.
For example, if you want to manufacture outdoor ovens, look for agents who specialize in these manufacturing processes and is familiar with stainless steel, aluminium and plastic materials. Also, the agents should have clear understanding about packaging regulations, if you are based in Europe, they should try to decrease the usage of non-recyclable plastic and use eco-friendly materials. These experts know the ins and outs of all related processes and be able to steer you away from potential problems.
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elksourcing · 5 years ago
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China SourcingAgent:How to find the best sourcing agent in 2020
China SourcingAgent:How to find the best sourcing agent in 2020
Whenever there’s a need to start a new business, there’s a question of locating the primary sources needed for it.
Either you try finding those by yourself or you hire a sourcing agent. But the question that remains is that; what is a sourcing agent?
What Is Sourcing Agent?
A sourcing agent is the one that locates the product suppliers for your agent.
They speak the language of the suppliers that you want to buy from, thus giving you the edge of finding affordable products.
Since China is the biggest producer of the goods as cheaply priced goods can be attained from its market, you can hire a sourcing agent from China to help you in locating suppliers for your business needs.
What Does A Sourcing Agent Do?
As highlighted earlier, sources agents help you locate the products or the supplier you need for the products from your chosen market. If you’ve planned to buy any product, you need to narrate your requirements to the sourcing agent.
The agent will search the market of your desired location for manufacturers that can cater to your needs.
When they locate such a manufacturer or manufacturers, they will contact you so that you may choose any one that fits your requirements.
After the selection is made, the sourcing agent will help you negotiate in terms of the primary elements of the supply.
It can be working hours, quality, pricing, etc. The sourcing agent can also assist in ensuring the safe delivery of the prepared product by all standards.
Their primary services can include:
·        Communicating and negotiating with suppliers
·        Overseeing the production
·        Updating you with the proceedings
·        Arranging storage and shipping options in and from your preferred location
·        Helping perform quality inspections
It is to remember that you don’t need to tell pay them for quality inspections if they’re working on commission. The sourcing agent will lose its commission if the product quality fails.
3 Types Of Sourcing Agents
Here are the different types of sourcing agents that exist in the market:
Single Sourcing Agents Who Work Independently
These types of sourcing agents work completely on their own. One cannot find any history of their performance in advance.
Moreover, they usually have a small network too. You are most likely to be dependent entirely on them when you hire those for your sourcing needs.
Another drawback is that without knowledge of how they work, you cannot expect complete quality. Moreover, they can simply disappear in comparison to other big sourcing companies working in the market. There is a great chance of scamming.
Sourcing Agencies
You can call these as the agency that has multiple sourcing agents for themselves. These agencies keep several sourcing agents, each with their expertise at their disposal.
Depending on the clients’ demands they can opt for a sourcing agent that works in sourcing consumer electronics, beauty products, furniture, etc.
They have a stronger network and are experienced in finding the products you need to find for your business. However, they charge more for their services in comparison to independent sourcing agents.
Full Service Sourcing & Logistics Companies
These are the most expensive yet versatile types of sourcing agents. They provide a huge network of sourcing services, finding your suppliers from different markets.
In addition, they are also responsible for quality inspections, logistics, shipping, etc.
You can expect a competitive in-house communication as well as choose to hand over them the responsibility for the entire process.
This can include finding the product, having it manufactured, and delivering it to Shopify Warehouse on time.
However, you’re strongly dependent on them.
Why Should You Use A Sourcing Agency?
There are several reasons that you can be needing a sourcing agency. Since Shopify sellers need products from different places, a sourcing agent can help you get familiar with your targeted market.
Time
The primary reason for hiring a sourcing agent is that you need to get things done on time. A sourcing agent helps you get started with the suppliers right away.
You don’t need to go through the hassle of finding one or negotiating them with specifications on your own. The sourcing agent does that for you.
Briefings
Language does not become a barrier for you. When the time comes for negotiation, the sourcing agent helps in briefing the specifications for the product to your chosen supplier.
They also ensure that every important element regarding specifications is included in the brief.
Negotiations
Another most important element that sourcing agents help you with is negotiation. They help you negotiate in terms of the specifications, making sure to maintain quality at the minimal pricing.
Here, a sourcing agent is the most needed since they are aware of the market, and know the common practices more fluently.
Verifying Certificates
Inspecting certificates and licenses from your chosen supplier is highly important, and that is what sourcing agents also help with. They inspect the language in which the licenses are issued, making sure that the supplier is working legally.
In doing so, the sourcing agents help you avoid scammers that may come up with fake names or agency licenses.
Thus, with the help of a sourcing agent, the risk of getting scammed by manufacturers is reduced significantly.
Experience & Network
You get to access to a wider pool of network when you hire a sourcing company. They have worked with several manufacturers that may be the best fit for the goods you’re needing.
In such a way, they can help find a perfect supplier for your needs using their market experience.
What Makes A Good Sourcing Agent?
Keeping the above reasons to hire a sourcing agent in mind, here are some competitive elements that make a good sourcing agent:
Business License
The first thing for a good sourcing agent is their license. Like every business, you need to find a sourcing agent that is licensed. It means they have the legal jurisdiction to work as a sourcing company.
It also helps you in keeping a solid track of the agent as well by assessing their legal precedence. In case anything happens, you can use the license number to track them.
Experience & Specialization
Having an experienced licensed agent is also important. The more experienced they are, the faster and more secure the processes can proceed.
Moreover, finding a sourcing agent that specializes in your domain is also important.
Since they will be working your selected product domain, you can expect timely services, high quality, and benefitting negotiations.
Testimonials
Previous projects, partnerships, and recommendations are important elements too. Similar to finding any contractor, you can also search for a sourcing company based on their recommendations. This will allow you to find the ones that are functioning superbly in terms of client collaboration.
Language
A sourcing agent works as a medium of combination between you and your supplier. Therefore, you must find the ones that are fluent in the language of your chosen market.
Location & Flexibility
You would want to have your sourcing company be located in the location of your preference. It would help you save traveling costs.
Moreover, in such a manner, the sourcing company will be able to keep you updated since they won’t need to arrange heft traveling programs.
Supplier Network
The point of connecting with a sourcing agent is to gain access to a higher pool of market networks. The sourcing agent you’re hiring should have an effective communication network.
They should be accessible at all times and should help you find several suppliers from your preferred location.
Transparency
Transparency is also important especially when you’re hiring a sourcing agent. You don’t want to have miscommunication in any aspect of the business. Whether it is the costs, production or any element.
Any sourcing agent must be of utmost transparency with their clients. If you face someone that avoids communication now and then, it’s definitely not a reliable source.
Who Are Bad Sourcing Agents?
You should avoid bad sourcing agents or Red Flags while finding ones for your business.
The Sourcing Agent Is Paid By The Factory
If a sourcing agent contacts you with a reference from a factory, say no immediately. Since the factory is paying them for finding buyers, it is most likely that they will direct you towards the company that is paying them.
The catch here?
The supplier that is paying them may be producing inferior quality products. The sourcing agent will guide you to buy from them, ultimately taking their commission from both ends, and you’ll end up with poor products.
The Sourcing Agent Offers Quality Inspections But Work On Commission
If the sourcing agent is working on commission and asks you to let them do quality inspections, it’s a red flag. Consider the scenario, the sourcing agents only get the commission when the final product is delivered to the buyer.
So if there’s a defect in the product, the buyer won’t accept it, and the sourcing agent won’t get their commission.
So why would a sourcing agent find defects in the products to lose their commission?
That is why it is recommended to avoid such sourcing companies.
Don’t Have A Business License
A license is important. As highlighted earlier that every company needs a license to operate in the domain. That is why it is important to hire a sourcing agent that is licensed for the services they are offering.
Take Long Time To Find A Supplier
You don’t need to hire a sourcing agent that takes a lot of time to find a supplier. That is important since your business has needs and everything should be carried out swiftly. The entire business is stagnant if the sourcing agent doesn’t find a supplier for you.
Moreover, if the sourcing agent is skilled and experienced, they will be able to locate suppliers for you instantly.
Since they have a wide network and been working in the domain for years, it should not take time for them to locate suppliers. If it takes, then it’s a red flag.
Poor Language Skills
As highlighted earlier, a sourcing agent is a communication medium between you and the supplier. The primary motive of hiring a sourcing agent is to avoid miscommunication and have swift communication.
That is why if your sourcing agent has poor communication skills, it is better to go look for someone else.
Moreover, you need to find someone present in your desired location. If they are, then it’s a good indicator that they will be fluent in the language of your desired location.
How Much Does A Sourcing Agent Cost?
With all the business costs, you need to strategize for the costs of your sourcing agent too. Here’s what you can expect to include:
Commission
Most of the sourcing agents work on commission. This commission isn’t fixed for everyone and depends on the quantity and the frequency of the order.
However, it usually lies in 2-10% (6% mostly). The commission fee will be higher for smaller orders.
For example, if you’re hiring an order of $1000, you’ll have to pay 10% ($100) for the commission. However, if you’re ordering for $50,000, you’ll have to pay $5000 (10%) for the commission or even less.
The commission is agreed upon as soon as the primary elements of the proceedings are completed. These include finding a supplier, relaying them your specifications, negotiating pricing and quality, etc.
One element to keep in mind while finding a sourcing agent is that they will work more if you pay more. They will find suppliers where they will get more commission. Hence, it’s better to negotiate beforehand.
Hourly Rate
Some of the sourcing companies often work on hourly rates. This type of model allows you to pay the sourcing agent based on the hours they’ve worked, irrespective of the deal with the supplier.
However, there come two major drawbacks in this model. One, the sourcing agent may take more time depending upon the search they need to make for finding a supplier. Second, they can charge for extra hours even though if they are not needed.
This is the primary reason why finding an hourly rate sourcing agent isn’t beneficial. You will not have any means to assess how long does it take for the agent to deal with their work. Using this, you can end up paying more for what its worth.
Flat Fee
This is a simple way of negotiating the cost; the fee is decided at the beginning of the project. When the fee is decided, the sourcing company will do their research to find suitable suppliers for your needs.
The catch? They get paid even if you don’t choose any supplier provided by them. This means that there’s a chance that the sourcing agent won’t put maximum effort into finding a reliable supplier for you since they know that they will get paid either way.
Mixed Payment Structure
Another payment method that you can adopt in this matter is the mixed payment method. This model comprises of the perks from the previous models. The buyer, which is you, will pay a flat rate fee until a certain amount.
When the order exceeds the threshold value, you can charge a commission on it. The use of the mixed payment method allows you to test the quality of the product that is offered by the supplier.
You can ask for a small amount, pay a little, and get the products made to see how good the supplier is.
Moreover, you can also use this method to see how well the sourcing agent is collaborating and communicating with you and the supplier.
How To Find The Best Sourcing Agent For Your Business
You can follow the following seven steps for finding a viable sourcing agent for your business:
Step 1: Define What You Need
The first and most important of all the actions is to find out what you need. This is important since you cannot dive into the market without any knowledge or strategizing about what you need.
This is also necessary since you will only be able to find a viably sourcing agent when you’ll know what you need.
This assessment will give insights on the product market to focus on, the location to concentrate, the target segment to connect with, etc.
All these elements are necessary to be defined since your sourcing agent can only be recruited when you’re able to relay these insights.
Step 2: Set Your Budget
Setting your budget is another important element that you need to assess before you go diving into the market for a sourcing agent. As highlighted earlier that there are several types of sourcing companies that are working in the market.
Each company and firm have its perks, cons, and costs. You need to make sure that when you strategize your budget, you keep aside some amount for adverse circumstances.
Moreover, ensure that you get the services first before handing over the entire payment.
But before you hire one, you need to ensure that efficient negotiation is done regarding the specification that has been discussed with the agents
Step 3: Choose A Type Of Sourcing Company
When you go deep in the market, you can come across several firms that will be offering sourcing services in your preferred domain. However, it’s hard to find someone that can fit all your requirements. But it’s not impossible.
You can easily put yourself and your resources to use to know what kind of sourcing agents are available in the market.
Moreover, keep a close eye on assessing their workability since a small ignorance can result in poor choice, which would affect the overall proceedings.
Step 4: Research & Compare
As aforementioned, you need to put your resources to use to find yourself a reliable sourcing company. While doing this, you can simply adopt the methods of comparing multiple brands or services providers.
As we tend to have preferences for brands and evaluate them based on their performances, you can do the same for sourcing agents. Select your domain of the product you want, and constructing your requirements.
This will allow you to relay the information to different sourcing agents. You can then pick their details for comparison and choose the one that is offering services the most according to your needs.
Having a comparison will allow you to know what kind of sourcing agents are working in the market. It will also help in saving yourself from scammers since you’ll be comparing them with real sourcing companies. The difference in the services will show.
Step 5: Get Different Offers & Ask For Business Licenses
During the selection process, you can get different offers from the chosen sourcing companies too. This will allow you to know what offer works the best for you, and what can you do to negotiate the price with the sourcing agents.
In addition, you can also choose to check for licenses of the chosen sourcing companies. One of the primary advantages of asking for licenses is that any scamming company will mitigate their communication, and you can also find out about them from their license number.
It will help save your time and resources needed for the assessment phase and will enable quick selection.
Step 6: Negotiate Payments
When you’ve compiled up a list of the most suitable candidates as sourcing agents, its’ time that you negotiate in terms of money.
This is another important element since you need to assess and select what kind of payment method will the sourcing agent agrees to.
Moreover, you also need to assess the overall payment strategy, keeping in the mind the overall budget you’ve set for your needs.
Price negotiation will not take time, and you can get clear answers from the sourcing agents too. Moreover, you can also negotiate in terms of increasing or decreasing the commission in case you re-order.
Step 7: Write Down Everything That Was Agreed On
Last but not the least, you need to have everything in the contract. This is another crucial element because this will allow you to get everything streamlined.
When you get everything in a written contract, the sourcing agents won’t be able to back out from the elements that have been written in the contract.
In such a way you can secure your end from any adverse circumstance such as payment issues, the difference in the quality, etc.
Choosing these methods will allow you to select a competent sourcing agent for yourself. You can put your maximum effort to select the best choice, and ensure that every necessary step is taken for the selection phase.
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