How good are you at sourcing products?
E-commerce is a hot buzzword right now. It’s easier than ever to come up with a cheap T-shirt design, slap it on some cotton, build a web page and start selling slapdash merchandise for low margins. The Internet is awash with people just starting to get their feet wet in the wide world of e-commerce, selling substandard merchandise for low margins.
Those shops are here today and gone tomorrow.
You want to craft a business with some staying power — something that has real value, not just a get-rich-quick scheme that won’t lead anywhere. To do that, you need to know the five must-follow rules for sourcing products overseas.
Overseas manufacturing tends to be cheaper than local, and often local manufacturers may not even exist for your product. I’ve spent plenty of time dealing with overseas sourcing myself — I cut my teeth on e-commerce in China, selling products sourced right at the ground level in the Chinese markets. Here are some of the most important things you need to know if you’re trying to do the same thing.
1) Define Your Specifications Clearly
There’s nothing more aggravating for the factory you’re working than either unspecified or constantly-changing specifications.
Changing a material partway through the manufacturing process can be costly, time-consuming, and in the worst case may even necessitate moving to a different factory. Before you even begin to search manufacturers, you need to have a clearly-defined idea of what you’re working towards.
There are quite a few specifications you should have at least mostly nailed down before you open your web browser to go hunting. These include, but are not limited to:
- Order size
Be specific and detailed. For example, if you were creating a handbag, you’d want dimensions for inside and outside, the strap, any buckles … don’t leave things out. The last thing you want to do is get far down the road with a manufacturer and then find out that they don’t have the capabilities for what you’re trying to make.
Something else to be aware of is that sticking close to standard sizing for your product can make it easier and cheaper to produce, as the factories may already have molds or patterns that work.
If the factory is doing a reasonable amount of business, it may have processed orders for other companies that want to produce similar goods. Take advantage of being second.
2) Use Sourcing Resources Wisely
Once your specifications are clear, you’re ready to start looking for a supplier.
This can be something of a daunting task.
Sites like Global Sources, ThomasNet and Alibaba specialize in helping you find sourcing, but by and large they serve as bare bones brokers: you don’t necessarily know how well a company has been vetted, or even if they’re a manufacturer at all. Many holding companies and front companies represent themselves as manufacturers on sites like Alibaba.
If you don’t want to do the legwork, a service like our own Sourcify can be a great tool to save you time and frustration down the road — Sourcify pre-vets all the manufacturers you come in contact with and helps streamline the process of getting your product off the ground.
There are other excellent tools out there that can help with both sourcing a manufacturer and dealing with logistics on shipping. Whichever option you go with, you’ll probably want to pare down to several options that you can send requests for quotes to.
3) Vet Your Supplier
So you’ve reached the point where you’re reaching out exploratory feelers to your list of suppliers. But who actually are they? How much can you trust them? Is there a way to find out?
There are a few things you can check:
- The easiest one by far: what’s the email address they’re using? Is it a company domain, or is it a Gmail or other free webmail address? Go to the domain. What does it say? (If all else fails, Google Translate can get you a rough idea.)
- Some platforms, such as Alibaba, have ratings systems and reviews or testimonies for each listing. These can give you an idea of whether or not the factory does good work, but probably won’t tell you if they’re a middleman or not.
- If you’re dealing with China, ask to see a business license. You might have to get a Chinese speaker to help decipher it for you, but it will tell you the scope of the business’s operations and what they’re allowed to do.
- Check that country’s business index. Most of these are available online. It might take a little bit of web searching to do this, but you’ll probably be glad you did.
- Ask for references. A reputable supplier that’s been around for a while will be happy to accommodate.
4) Communicate Clearly
This applies even in English, but it’s hyper-important when you’re dealing with companies based in non-English-speaking countries. Avoid long words or unnecessary jargon, especially things that might trip up machine translation. Not every office will have good English speakers, so they might be relying on software like Google Translate to pick up the slack.
Be concise and to the point, and use lists or extra line breaks where possible. It’s harder for the person on the other end to miss something important.
Don’t just rely on email, either. Email is the most common form of business communication for a reason, but having other avenues of contact can be helpful if email alone isn’t doing the trick.
5) Get a Sample
If you ignore everything else in this article, don’t ignore this.
You have to get a sample product.
Everything may look great on paper, but translating your specifications to an actual manufactured product (especially if there’s a language barrier) can be a challenge. You may have forgotten something in the specifications, or the manufacturing process might make it look different.
When you receive your prototype, put it through its paces. Use your five senses (well, maybe four — taste might not be that useful). Does it look right? Feel right? Are the details correct? How does it hold up to wear and tear?
Iron everything out at this stage, while you don’t have a full production run going, and you’ll save yourself a lot of headaches down the line.
Forewarned Is Forearmed
Sourcing products overseas can be tricky, and there are pitfalls that can trip up even experienced business people. But with these five rules, you’ll be a little more well-armed when it comes to navigating the process.