Sourcing products from all over the world can seem like an impossible task, especially if you’re just starting out in the business. However, having a global sourcing strategy and understanding the different stages of this process can help you run your business more effectively and keep you on track to get what you need when you need it, without sacrificing quality or increasing costs unnecessarily. If you have specific questions about any stage of the process or would like help with any stage of your sourcing process, please don’t hesitate to comment.
1) Where To Start
Unless you’re planning to manufacture in your home or hire out production for a very small-scale project, your sourcing strategy is going to have to start with product development. That might be sketching on paper, rapid prototyping, 3D printing, or another method—just remember that it’s important to not skip any steps along the way and to keep in mind where each step takes you. When researching your idea, consider talking with local and online suppliers who can help develop and prototype ideas as you move along (especially if you don’t want to invest too much money upfront). They’ll know what you need when it comes time for them to fulfill orders—and they may also know how long it could take.
2) Assessing Your Current Product Mix
What does your current product mix look like? Is it properly distributed around the world? As you begin to explore potential expansion, you’ll want to understand where you stand and what gaps exist in your global presence. How many products do you currently have available in each region? If a customer were to search for products made by your company, how many would they find within their home country? These questions will help identify gaps in distribution that need to be filled by new SKUs or international partners. For example, if customers in Australia only see two out of ten SKUs that are actually available, then not only is there room for growth but also an opportunity to improve customer experience by making more products visible.
3) Leveraging Key Partners in China
When it comes to global sourcing companies, leveraging key partners in China is key. But not all Chinese business partners are created equal. In fact, finding one who offers competitive prices and stellar customer service can be difficult—but it’s absolutely essential to sourcing success. Here are three steps you can take to ensure you’re partnering with a great Chinese supplier: 1) Get multiple quotes from multiple companies; 2) Ask questions regarding each quote; 3) Research clients they’ve done business with and get references. Follow these three steps and you’ll likely have found yourself a winner!
4) Starting Up in China
The first stage in sourcing globally is to set up shop in China. To do so, you’ll need to pick a Chinese partner who can help you navigate market entry and do business on your behalf; these partners are called trading companies, or trading agencies. A full-service trade company helps foreign buyers negotiate and place orders with the help of China sourcing agents for goods like raw materials, equipment, parts, and finished products. You don’t need to be fluent in Mandarin or Cantonese to succeed here—these firms will manage your search for manufacturers while you focus on managing those products once they’re made. From there, your products go through final inspection (for both shipping quality and product content) before arriving at their destination.
5) Dealing with Issues
All cross-border deals involve some level of risk, so it’s important to keep track of issues as they arise. Keep an eye on things that can hinder or prevent your company from achieving its goals (such as fluctuating currency exchange rates or regulatory changes), and build contingencies into your plan. Your suppliers may have suggestions, too. Think ahead, and you might be able to work around issues before they become major headaches.
6) Maintaining Business Integrity
Suppliers’ reputations and businesses can come into play when you establish relationships, so you need to keep these factors in mind. Do they operate in an environment where their products may be sold? Are they organized and have they been in business for several years? If so, do they have references from other companies with which you can check their business record? Will your supplier provide services such as quality control or shipping on behalf of your company? A supplier with a high integrity rating is one that is easy to work with and can be counted on. One good way to find out about them is by checking their reviews online. Look for signs that customers were happy with the company’s performance.