Are you looking for quality products at competitive prices for your business? Then you need not worry, JOG International Ltd. is a one-stop-shop for product sourcing from China & supply chain management. Today we have a little guide to help you better understand what it involves if you decide to go it alone or get some help from an experienced partner.
Product sourcing appears to be a fairly simple process. You identify your product, locate a supplier, stock your inventory, and sell, sell, sell. Like anything in life it’s all a little more difficult, dare I say it sourcing from China is a more complicated process than that.
What is Product Sourcing?
Product sourcing is the process of identifying products you wish to purchase from a third-party supplier such as a wholesaler, trading company, or manufacturer. In the purest sense, we should really be only looking at manufacturing companies or factories i.e. at the source. A successful product sourcing strategy should lead you to good quality products at reasonable prices to deliver healthy profit margins. When you source products in China it is key to understand in a detailed way the product you require. Differing specifications carry varying costs - a case of you get what you pay for.
Product Sourcing Methods
1. Working with Manufacturers.
A manufacturer makes products from scratch and directly sells them in bulk to a retailer or wholesaler. Most of the manufacturers/factories are known for having high minimum order quantity (MOQ)requirements. When you work with a manufacturer, you must make an initial financial investment but you'll get the products at a lower price. To get sourcing from factories in China right, you need to invest a lot of time and energy in communications to ensure you are getting what you require. Knowledge of manufacturing and international trade is also a big help when attacking this task. Trust is another key factor, do I have enough knowledge to understand if the factories I am communicating with are reputable.
2. Work with Sourcing & Supply Chain Companies.
Sourcing companies offer experience & direct access to products from China’s best factories. The ones that are not always easy to find online. They act as intermediaries between your company and the local factory. You get to leverage their experience & relationships with existing Chinese factories. A relationship is hugely important and affects your prices & quality. They can bargain for better payment terms, discounts, or even exclusive rights to certain products they sell. Aside from this, they are your company’s eyes and ears on the ground and can help control quality and inspect orders before they are shipped out. JOG International is an example of a company well-positioned in this space.
3. Dropshipping
Dropshipping is the only method of product sourcing in which retailers do not have to handle the products they buy. The suppliers bill you as you sell the products, and they ship the orders directly to your customers on your behalf. There are plenty of dropship companies in China that supply Shopify and Amazon stores, the advantage is they are flexible on order quantities but the drawback is costs are relatively high compared with bulk buying from factories.
4. Attend Trade Shows
Trade shows, exhibitions, and conferences can be great places to conduct market research and identify and establish relationships with manufacturers, wholesalers, and other independent retailers who often sell unique products that are not yet widely known in the market. Use such events to get a closer look at products, learn more about the supplier or seller, and pick up on industry trends. In China, there is an exhibition for almost every type of product. During the pandemic though many have been canceled or have gone online. JOG International can offer you a presence on the ground to assist.
5. DIY or make your own products
Handmade products are becoming increasingly popular as buyers seek originality and uniqueness in their products or furnishings. Using this method, retailers would manufacture their own products rather than purchasing them from a third party. One advantage is that you don't have to rely on third-party providers to build your products from the ground up. If your sales suddenly increase, your production must be able to keep pace, China is potentially an option to scale or complement your operations.
A good supplier should have excellent communication and language skills, industry experience, and the ability to manufacture your product. Another advantage is that they are willing to go above and beyond to manufacture the exact specification of the product you are sourcing while remaining well within your price range. They should also be cooperative and proactive to begin collaboration on a long-term mutually beneficial relationship.
Product sourcing can be both a stressful and time-consuming process. We hope that this article has helped you a little to understand some of the key aspects of the process and that it has inspired you to begin sourcing products from China.
Please contact us if you require additional assistance with the process, we are working with hundreds of suppliers on a daily basis.
Comments