How to Choose a Reliable Sourcing Company?

Introduction

You are about to start an international sourcing business. You have done your homework and selected a reliable Sourcing company with years of experience in the industry. But how do you know if this is the right one for you? There are many factors that can help you decide on which company will be best suited to meet your needs.

We totally understand how hard to choose a trustworthy company for your sourcing operation

So in this blog, we will list 12 points for reference, you can evalulate the sourcing companies according to the list. Besides, we will list some reliable sourcing companies which have their reputation on the world to you.

These content must be useful to your sourcing caree!

The following content will include two part:

  1. how to evaluate a sourcing company
  2. Relible sourcing companies for reference

sourcing company

 

 

How to evaluate a sourcing company ?

1. minimum order quality

If they don’t have one and ask you to call them and negotiate it on a case by case basis. What this tells you is that they will keep increasing the price until you either accept or walk away. Never give in!

You must make them stick to their MOQ even if it means saying “I am sorry but I can’t place such a large order with you at this time.”

What factory would be willing to lose your business over $100-200? Not many, so don’t worry too much about turning them off because there are plenty more fish in the sea.

Sourcing company

 

2. Legal and patient

Is your product even legal to import? What if it is patented in your country? What if you are importing it without the proper documentation or registration?

What if you do not have a trademark for your product name- that would be silly, but it happens all of the time! Many people who are new to importing assume that their product will pass customs when in fact they should know better.

I cannot stress this enough- check with your local patent office and trademark attorney before even starting to source product!!!

 

 

3. What about lead times?

Factories may promise 6 weeks delivery on items, however, make sure that these dates are realistic. If they can’t get you samples within 3-4 weeks of receiving payment then there is no way they can get an entire container overseas in 6 weeks.

What many factories will do is quote an extremely long lead time so that you are forced to rush your order in order to receive it on time.

What happens if the samples fail inspection? What if they send you defective goods? What happens when they take 2 months to refund your deposit? You get my point…

 

4. What about quality control costs?

Factory owners in the apparel industry have bragged to me about how much money they can save by getting their product out quickly and cutting corners during production- I cannot believe how these people sleep at night!

There are companies who spend upwards of $100,000 per year just for QC alone! When a factory cuts too many corners with their production process, there is no way for them to hide behind a quality control team- defective product will go to the customer!

What if you are shipping to Wal-Mart? What kind of customer service do you think they will give to your customers when they return items at 10 times the cost that it takes for them to make them?

 

5. What about returns and recalls?

What happens if you need to recall product or issue a refund because your shipment failed inspection upon arrival at customs?

What factory would be willing to take back finished goods that one of their other clients paid full price for, not knowing it was defective? Not many I can tell you that…

 

6. What about your profit margin?

Even after all of these things are taken into consideration, what kind of profit margin do you have left to work with? In the industry of construction material , once all of these factors are calculated into your quote, your profit margin is generally 10% at least .

What if you take a loss on every item sold because it failed inspection or was defective? What about those returns and recalls I mentioned earlier? You will go out of business before you even know what happened!

 

 


  1. What about customs clearance fees?

Depending on where you are exporting from, after your container leaves the factory, you may have to pay customs fees on your product before it even lands in your country. What if you do not know these fees?

What if your factory does not pass them on to you? What happens when you find out that they pocketed the money and never paid customs on time? What about all of those containers of overstock sitting at ports around the world because factories did not pay their bills? You get my point…

 

8.What about US FDA requirements for food items?

If this is an imported food item, there are many more considerations than just local health department approval! What kind of approvals must be passed through customs in order to import into the USA? What factory would be willing to help with getting all of these approvals?

What if you have to get expensive nutritional analysis done on everything that goes into the container? What factory would be willing to do all of these things for what they are already charging you in your quote letter?

 

9. What about shipping costs?

What happens when your product arrives at its destination port and you need it shipped inland to where it will finally reach the stores who are going to sell it?

What factory would be willing to help with this part of logistics, especially overseas when every shipment is a custom order requiring special documentation? Not many…

 

 

10. What about vendor compliance audits & factory inspections

What if you want to make sure your factory is following your standards 100% of the time when producing product for you?

What factory would be willing to accommodate your need for a full audit conducted by a third party who will go in and inspect everything related to quality manufacturing processes, product safety, regulatory compliance and environmental controls?

What if you want to hire an independent 3rd party consultant or agency that specializes in doing this type of work just so they can come into your factory and verify that things are being done properly without outside influence from factory management because it is their job to do these kinds of audits?

What kind of factory would be willing to open up their doors for this type of experience? Not many…

 

11.What about factory capacity utilization & minimums

How many items do you want to make at one time? What facilities are available inside the factory and what is the size of each facility? What if your order quantity is too low to cover the minimum space requirements in the factory’s production facilities all at one time?

What kind of factory would be willing to make smaller lots or split up their production line capacity so they can run your product along with other products at the same time for other clients?

What kind of factory would be willing to tell you no on an order because it does not meet their minimum space and staffing requirements or it may cause significant delays in production schedules for existing clients if they do open up some additional spaces just for your smaller quantities at a later date?

What kind of factory would be willing adjust their pricing models to accommodate these types of fluctuations in order volumes while still providing the same factory-direct pricing and pass these savings on to you?

What kind of factory would be willing to adjust their order cycle, billing schedule and payment terms if your order quantities take longer than normal to produce because they are smaller?

What factory would agree to all of this without increasing the unit price or require a minimum purchase amount for each production run before setting up the production line? Not many…

 

12.What about product quality

What if you want to make sure all of your products  are produced to the same quality standards that you would expect for your own personal use ?

What if you want to make sure all of your products are checked several times during production by more than one expert inspector at multiple stages of the process?

 

 

Relible sourcing companies for reference

Pangea sourcing

Pangea is the trusted product sourcing company that will help you find what products are needed for your business. With partners in China, United Kingdom and other markets Pangaea guarantees quality suppliers with competitive pricing so give ’em a shout!

pangea

DocShipper Group

DocShipper Sourcing is the procurement department of DocShipper Group, an international freight forwarding company headquartered in Hong Kong. The company provides sourcing and logistic solutions in more than 40 countries around the world including China Thailand & Vietnam .

Sourcing assistance includes supplier research compliance quality control as well as international logistics for their clients throughout all supply chain stages such from raw materials to finished goods across Asia

 

Conclusion

Choosing a reliable sourcing company can be difficult. To make the process easier, it is important to evaluate each potential supplier on their minimum order quality, legal and patient compliance issues, lead times, quality control costs, returns and recalls as well as your profit margin.

You will also need to consider whether or not they are compliant with US FDA requirements for food items and shipping costs of course! In addition to these considerations you should review vendor compliance audits & factory inspections in addition to factory capacity utilization & minimums when evaluating which supplier would best meet your needs.

Finally it’s critical that you ensure that any suppliers chosen provide products at high-quality levels; this way customers won’t have any complaints about the product delivered by the end user.

If you still have other questions, please feel free to contact us! thanks for your reading!