Product Sourcing 101: Tips for Success

For decades, China has been the go-to place for sourcing and manufacturing parts overseas. Sourcing for products in China offers companies significant cost savings while simultaneously giving them world-class standards. Still, product sourcing is not something everyone understands on the first go-around. There are several barriers to overcome when it comes to product sourcing overseas, some of which relate to the physical distance, miscommunication, and cultural differences.

Companies that master the process of sourcing products from China, however, stand a better chance at long term success. China Sourcing International has been one of the leading experts in sourcing in China for years. We know how to engage with Chinese suppliers and manufacturers to get our clients what they want. Here are our tips for product sourcing for beginners.

1. Always be Clear About Your Needs

Clarity is key in any business development but especially product sourcing. A lack of clarity is one of the major reasons some traders struggle with sourcing products from China. This is particularly relevant when developing products from a concept without even a prototype off of which to start. Explaining your vision to anyone can be difficult, let alone a Chinese manufacturer who does not speak the same language.

Our advice is to take extra pains to over explain. Not only should you provide detailed written and verbal descriptions, but it would also help to include CAD drawings. We suggest using a Pantone color chart. Material specifications, sizing information, and any other details or illustrations that will help convey your concept will be useful.

2. Know Who You’re Working With

We can’t stress enough how important it is to know who you’re working with in product sourcing. Many people do a quick search on alibaba.com and partner with the lowest cost company they can find. While this may seem attractive initially, the type of company you choose will make all the difference in your final outcome. It’s imperative to know what type of company you are working with: are they a supplier? Are they a sourcing agent? Are they the factory itself? 

In addition to that, you’ll want to find out details about the company including their business practices and ethics. Business conduct matters as do social and corporate responsibility. Find out how committed this company is to preserve the overall health and wellbeing of their employees. This may include investigating working conditions and practices as well as from where they source their raw materials. 

3. Learn About Trading Companies

China Sourcing International is an example of a premier sourcing company that offers trading services in China. Trading companies work as intermediaries between western companies and their Chinese counterparts. They take in your order and source existing products in the market for a client, searching for the best manufacturer that will be able to meet your needs. There are many advantages of hiring a trading company, one of which being a strong command of the Chinese language. This helps reduce the risk of mistakes due to mistranslations and communicate complex instructions (i.e., a client asking for multiple shipping destinations/dropshipping, etc.). Other advantages include the fact that the team will actually be in China, which means they can check the legitimacy of the factor prior to clients placing an order. An on-the-ground team also inspects goods before they leave the factory floor and get shipped to clients as a means of preventing issues before they materialize. 

4. Select the Mode of Engagement

There are two main ways to engage with Chinese companies, each with their pros and cons. One is online and the other is by physically visiting the country. Going online offers the advantage of doing business from the comfort of your home, which lets you save on travel and accommodations. Staying online, however, also comes with the risk of products not meeting your specifications. By visiting China in person, you’ll be able to attend trade shows and conventions, meet sourcing companies face-to-face, assess factories, build rapport with your sourcing agency and factory in China, and gain on-the-ground insight into the vast array of products that are manufactured in China today. If traveling to China isn’t an option for you but  you still want that in-person connection, China Sourcing International can help. Our team is on the ground, which means we’ll take care of everything mentioned above on your behalf. By working with China Sourcing International, you’ll be assured of quality control, precision, and accuracy with every project.  We are your team, on the ground here in China ensuring all of your product and production requirements are met, if not, exceeded.

5. Look Out for the 3 Major Red Flags of Going Direct to a Factory (without a Sourcing Agent)

1- Quality and Quality Control Issues  – Even with an outstanding sample a factory may send you, being thousands of miles away can make it extremely difficult to see whether their factory has the capabilities to maintain quality assurance across the entire production. Working with an experienced sourcing agent and their team means they will inspect the sample, make amendments if needed, inspect raw materials before production, inspect the first 10, 100, 1000, 10,000 to ensure the machines are producing the same goods and finally run a number of tests on your product to ensure it is manufactured with quality in mind.  While some factories may say they can inspect their own goods, just remember that if you don’t have a third party on their factory floor to inspect their goods, they will naturally be biased or may not see errors as they are too close to the product.  It is critical to have third party support here to prevent you losing money on defective final goods.  You may also consider third party inspection companies such as SGS, however, as their duty is to inspect goods during and post production, if any errors occur, they catch this at a later stage, whereas when working with a sourcing company like China Sourcing International, we ensure our team is on the factory floor throughout, with our auditors, inspectors, product engineers, to ensure we meet, if not, exceed, your product design specifications and vision.    

2- Language Barriers – Not speaking the local dialect and language can lead to miscommunication (especially when communicating engineering/technical terms or conveying your vision/market etc.).  If you speak Chinese, chances are you are also able to build stronger rapport with the factory and their manager and negotiate a far better deal and lead times etc. 

3- Packing and Shipping Issues– Failure to have people on the ground to guide your factory on how to pack your products, may result in factories using cheap cardboard and Styrofoam, which can easily lead to chips, marks, damaged goods.  Having an experienced inspection team on ground will ensure your products get packed and make it to your warehouse/doorstep safely.  

6. Find a Sourcing Company You Can Trust: China Sourcing International for Product Sourcing

Sourcing products from China requires the expertise of a trusted, reliable, and honest sourcing company like China Sourcing International.  We are proficient in Mandarin, Cantonese, and English to ensure that your project never gets lost in translation. With every client we take on, we provide value-added services across a wide range of offerings including product engineering recommendations, sourcing and manufacturing, terms and cost negotiations, and so much more.

Beyond these 6 areas, there are several other pointers of which to take note in the realm of product sourcing. We’ll go into the various stages of why you should choose a sourcing company, how to choose one, what areas of risk to look out for, and more so you can make educated decisions in this process. Equipping yourself with this information will help you in many ways along your sourcing and manufacturing journey. 

6+ Advantages of Working With a Sourcing Company

If you’re looking to import products from China but find yourself drowning in the long list of factories on Alibaba, perhaps not sure which one is reliable or can bring your vision to life? We got you! Find a sourcing company you can trust and they’ll do all the heavy lifting for you.  Here are 5 advantages of working with a sourcing company if you’d like to manufacture your products in China: 

1. Sourcing companies source products for you. It’s as simple as that. Whether you want to sell a product that already exists or manufacture a new product, a sourcing company will help you qualify, audit, and acquire the best factory based on your needs at your quality and price requirements. On your end the process will be simple. On our end, this entails extensive expertise in the industry, having a well-established group of networks in place, and having references to ensure that the factory we recommend is trustworthy, reliable, and flexible. In the end, this will save you a lot of time and money, something everyone wants.
2. Sourcing companies monitor orders. You can’t be expected to be on top of everything all at the same time. That’s what we’re here for. A sourcing company is your on-the-ground project management team. We’ll be there to make sure that your product deadline goals are met and remedy any issues that could lead to delays. Sourcing companies like ours will never leave  you in a lurch wondering when or if your product was delivered. You’ll always retain total peace of mind knowing a team of experts is working round the clock to ensure safe, on-time delivery.  We have auditors, inspectors and product engineers on the ground to ensure your vision gets brought to life and shipped to your warehouse. 
3. We provide quality control. One of the major advantages of working with a trustworthy sourcing company is the quality control we provide. We’ll make sure that your quality standards are always met by implementing extensive inspections and factory audits, both of which we carry out on a regular basis. This ensures that your products will be to the exact quality standards you want and nothing less.
4. Sourcing companies take care of logistics. This means ensuring that the process flow from start to finish is smooth. From packing to logistics documents to shipping and handling, we take care of it all. You can sit back and trust that your sourcing company has all of it covered.  
5. Post-delivery service. There’s nothing like a final check-in post delivery to really seal the deal. Quality sourcing companies will verify that everything came as expected and that you as the client were completely satisfied. 
6. Negotiation.  The biggest misconception is that Sourcing Companies are expensive and an added cost.  An experienced, established and reputable sourcing company like China Sourcing International, will be able to take a look at your requirements, needs, and wants to build a solid negotiation strategy before approaching factories.  With this, we are able to negotiate not only the best rates for our clients almost every single time, we also negotiate the far more superior terms and flexibilities.  Our goal is to not squeeze the factory dry, but to ensure all parties are equally satisfied, excited and passionate to bring our clients products to life.  If you do a comparison between approaching a factory directly versus going to a reputable and experienced sourcing company like China Sourcing International, and compare rates and terms, you will be surprised at how much you can save in money and time.

Sourcing companies like China Sourcing International are here to be your one-stop-shop solution with eyes and ears on the ground. Consider a sourcing company your middleman, always on hand to take care of your needs and bring your creations to life. Now that you know the advantages sourcing companies can bring, the next step is to choose a reliable one.

7+ Tips on How to Choose a Reliable Sourcing Company

People hire sourcing companies to free up time, save money and effort, and eliminate frustrations. Those may be the goals, but choosing an unreliable sourcing agent will do just the opposite and result in even more headaches as well as wasted time and money. To get around this, you have to know what to look out for when hiring a sourcing company.

1. The Business License. Every business needs a business license, sourcing companies included. This means they have the legal jurisdiction to work. Don’t be shy about asking a sourcing company for its license. If they are hesitant to provide it, that will be a clear indication that they’re a scam and you can move onto the next one. 
2. Experience and Specialization. The more experienced a sourcing company is, the faster and more secure its processes will be. Experienced sourcing companies have shorter lead times, lower product costs, and can get the highest quality product from suppliers. Most sourcing company websites will proudly tell you for how long they’ve been operating, so you get an idea of how long they’ve been in the game.It’s also a good idea to look for a sourcing company that specializes in your domain. This is key because the sourcing company will provide timely work, have access to high-quality products, and be able to strongly negotiate on your behalf from its wealth of knowledge and contacts in that particular domain. You’ll have a fantastic product that is both well made and at your preferred pricing point.
3.  Testimonials. Check out the sourcing company’s previous projects, partnerships, and references. You’ll (hopefully) only hear good things but there’s always the chance that you won’t… that alone will be enough of a reason to consider taking your business elsewhere.
4.  Languages. If you can’t communicate with ease with the sourcing company, you’re going to have a major problem. Make sure to find a company whose staff speaks the necessary languages to communicate clearly with you as well as the chosen market language where the supplier is based.  The main languages if you are planning to manufacture in China are: Fluent in English, Mandarin and Cantonese.
5.  Location and Flexibility. It’s typically best to choose a sourcing company that is based in or near the location of where your product will be sourced. This will save you travel costs, and it means the sourcing company is on the ground, keeping a close eye on your product throughout its manufacturing process.
6.  Supplier Network. The sourcing agent you choose should have an extensive supplier list of reputable factories that should be quickly and easily accessible.  This speeds up processes, ensures you’ll get the most competitive price for your product and can pull strings for you when and if needed.
7. Transparency. Minimizing miscommunication in every aspect of your dealing with the sourcing agent should be a priority. This is your product, after all, so you need to find a sourcing agent who is completely transparent. That means knowing and understanding all costs involved and all elements of production. Nothing should be kept from you at any stage of the game.

Last but not least, our final tip when choosing a reliable sourcing company is to choose more than one! Start by analyzing several sourcing companies to compare their details and offers. Then ask for quotes and samples and compare their prices. Pay special attention to prices that seem too good to be true and don’t be afraid to walk away if something doesn’t feel quite right.

6+ Dangers and Bad Practices of Risky Supplier Platforms and Factories, and How a Sourcing Agent Can Help 

At this point in the process, you’ll have already chosen a supplier and factory. But what happens if you run into roadblocks such as bad practices with risky supplier platforms? There are several ways a sourcing agent can help. 

Here at China Sourcing International, we’ve been in the industry for over a decade and our team has a combined experience of over 30 years. Before finding us, however, many of our clients find themselves in nightmare scenarios brought on by going through supplier platforms like Alibaba, or going straight to factories. We want to help you avoid making those same mistakes. That’s why we’ve put together a list of some of these poor practices and dangers so you a) know what to look out for and b) can see how working with a sourcing agent will be completely different.

1. You paid your deposits but never got your product. Numerous clients have told us how they’ve either paid their deposits or paid in full and the factory never shipped out their product. This is everyone’s worst nightmare. Going through a sourcing company like China Sourcing International will always provide you with complete transparency so you’ll know exactly what is happening with your product and where it is at every stage of manufacturing, production, and shipping.
2. Communication, or lack thereof. Miscommunication due to language barriers leads to inaccurate execution. This results in poor product quality, specifications not being met, and a product that you can’t sell. Hiring a translator won’t quite cut it either, as they’re unlikely to have the necessary product engineering experience you need to communicate your vision. A sourcing agent like ours protects the client’s interests by making sure that all ideas are properly communicated in the right language down to the detail.
3. Auditing and inspections that fall by the wayside. Factors with their own onsite inspection teams will be biased to sign off on everything and deem it all as satisfactory. This doesn’t do you any favors as it provides zero guarantee that the quality will hold up with third parties. Furthermore, you want to work with factories that produce goods ethically and abide by labor laws. A third party like China Sourcing International audits factories thoroughly and regularly. We’re not connected to factories and we don’t have a stake in the game for giving them a signoff if things are not up to par. Our clients are our priority and we’ll do whatever is necessary to uphold their quality standards, even if that means suggesting they switch factories. 
4. Stealing product ideas. This is a major concern of many clients who take their production overseas, but unfortunately, going directly through a factory or a supplier platform opens them up to that risk. Not having the right paperwork in place can lead to serious legal issues, especially within the Chinese legal system. While you may have a patent for your product in the US, things work a little differently in China and not everything upholds. A sourcing agent like China Sourcing International will guide you through this very in-depth paperwork process and go the extra mile to ensure that your product and its technology are protected on all fronts. From NNNs to NDAs, we’ll advise on all of it.
5. Time wasted. Many of our clients come to us exasperated because they have spent so much time going back and forth with a company or an Alibaba supplier. A sourcing agent will take care of all the communication, production and logistics for you so you can focus on your business’ operations.  
6. The cost factor. This is where a lot of clients run into issues. They try to cut costs by going directly to factories or “too good to be true” Alibaba promises. Sure, the initial proposed cost may be lower upfront, but once you tack on the price of flying out to see factories, auditing the factory, upgrading materials for packing and shipping to protect your goods, and paying for all the extras, you’ll quickly see the costs stack up. A sourcing agent in China will be able to conduct all of that business for you. We’re already in China, with boots on the ground, ready to take care of your needs. 

When you boil it down, the biggest issue with going directly to a factory or supplier really lies in quality or lack thereof. There are hundreds of thousands of factories, making it hard to know who to trust. We don’t want you to send money somewhere only to end up with a product that never sees the light of day. A reliable sourcing agent like China Sourcing International is undeniably the better way to go.

How and Why a Sourcing Agent Carries Out Quality Control, Inspections, and Testing and How These Benefit Clients

Earlier in this Product Sourcing 101 guide, we touched on the importance of carrying out quality control, inspections, and testing. Now it’s time to explore these areas more so you can see how they benefit clients. 

Do you think you can get away with shipping your products without any quality control? Think again. Sidestepping quality control could result in a major hit to your business. Sure, you could import one product from one supplier and face no issues, but the more you do this without a quality control system in place, the more risk you’re subjecting yourself and your business to. 

That’s where a company like China Sourcing International comes in. We carry out regular factory audits, inspections, testing and implement quality control measures so factories manufacture products exactly as clients want them. 

But what does quality control even mean? It is a system of maintaining high standards throughout  – from our first conversation with our clients, up until the goods reach their warehouse.  Here is an overview of how we maintain quality control throughout: 

• We assess the quality of materials you have chosen for your product idea based on the CAD design, and at times, recommend superior, durable materials that are comparable in price, or within budget. 
• Before even starting the manufacturing process, we have to make sure we’re using the right factory. In order to do that, we have to carry out an auditing process.  At China Sourcing International, the auditing process begins before manufacturing, when our auditing team goes to the factory to make sure that it can actually make the product. We check their machinery, production lines, how they operate (and how efficiently), what their standards are, products currently on the factory floor and if they are producing quality goods, capacity, work environment for their employees, health and safety checks, and so much more. This ensures there is satisfactory quality control for the rest of the project. 
• China Sourcing International closely checks all raw materials being used by a factory before a sample is being produced. 
• We then inspect and test the sample before sending it to our client.  
• When we have signed off on a golden sample and are ready for mass production, our team is on the ground to maintain quality control at every stage of production.  From inspection of raw materials to the first 10% produced. Our inspectors send pictures and videos of the produced goods back to our Hong Kong office, where our team carefully reviews everything before relaying the details to the client so they are up to date at all times on what is being produced.
• Our inspections don’t stop there. Our second inspection is during the mid-line process, followed by the final quality check once production is complete. At CSI, we’re stringent about this inspection process. We are there at different stages of the manufacturing process to keep defect numbers at a minimum.  Furthermore, our team makes sure that international AQL’s (acceptable quality limit) are always met. This means that for every 100 pieces of a product, we check that the minor, major, and critical acceptable limits are met. A minor limit could be a packaging defect, a major one could be a scratch on a car, and a critical one could be a battery that doesn’t work. For example, during the minor limit, we only allow 4 out of 100 pieces to be defected, for the major limit only 2.5 pieces out of 100, and for critical pieces we don’t let any pieces go by if there’s even one small defect.  We ensure our clients never settle for less, and receive superior products that are high quality and that they are proud of. 
• China Sourcing International keeps a close eye on quality control all the way through shipment day, and even after that. Our inspectors will go to the factory and make sure the packaging and packing is up to standard. Great quality goods can be packaged in terrible quality packaging and when they’re shipped out, they can be damaged. Our inspectors work to ensure that doesn’t happen. 
• Then we go a step further. After the product is ready for shipping, we help our clients with logistics. We can help with logistics ex-factory, as loose cargo load, or full container load. We also help clients ship their product all the way to their warehouse, organizing Delivered & Duty Paid (DDP), Free On Board (FOB), Cost Insurance Freight (CIF), or Delivery & Duty Unpaid (DDU). You name it, we’ll help you with it.

While most sourcing agents only carry out quality checks right at the end of the process, what makes China Sourcing International stand out is that we carry out multiple quality checks throughout the process.

Quality control is about so much more than carrying out just one inspection. It’s a mixture of actions taken before production and before the quality control, and then it’s about keeping a close eye during the production process.  Finally, it entails the decisions made after quality control, and even after shipment. Give yourself the best shot at success. Partner with a sourcing company you can trust: China Sourcing International.

We’ve gone through quite a lot of information already but before you go out into the world of sourcing and manufacturing, it’s always important to know. We’ll wrap up with a few words of wisdom.

7 Mistakes to Avoid When Importing from China

Now that you’re ready to import from China, the final pieces of advice we can offer are about the mistakes you must avoid!

1. Sourcing and selecting by price alone.
   It’s easy to make the mistake of choosing a factory based on price. Even though most importers turn to China for the most competitive pricing, this doesn’t always mean you’ll get good results. One mistake we’ve seen time and time again is importers jumping on a platform like Alibaba to collect quotes, choosing a middle ground price offered by a factory, and starting communication. One thing leads to another and the importers choose that factory. We caution you to be careful here. Sourcing the right manufacturer has a direct impact on the quality, price, lead time, or defect rate of your product. Many clients who previously used Alibaba said that one of the major issues they faced was factories using cheap materials for their products and not having anyone on the ground to step in and correct this. There’s also the possibility of a client’s vision not getting properly communicated to the factory team or project manager and ending up with a product that was manufactured even slightly incorrectly. There’s no way to know how things will turn out when you go through Alibaba, not to mention what kind of unethical workplace practices they may employ. A good price and a convincing salesperson don’t always mean it’s the best fit for your business. Sourcing is a crucial step in the process of getting a perfect product. Don’t let yourself get blinded by shiny things.
2. Negotiating based on price alone.
   Our experience has also shown us that negotiation based on price alone is pointless. You might end up with what you think is a good deal, but the price itself counts for nothing if you haven’t also pinned down exact specifications, materials, packaging, lead times, payment terms, and quality standards. Even with a good price, you need to outline exactly what your expectations are. If you don’t, you could end up with a product that isn’t to your standards, is not delivered on time, or is improperly packaged.
3. Not getting things in writing.
   Even if you have discussed the above terms, the entire discussion is a moot point unless it’s in writing. A phone conversation with a good salesperson at a factory doesn’t mean that every detail you’ve talked about will be properly relayed to the Production Manager. It has to be written down so you have documentation.
4. Poor quality assurance.
   As an overseas importer from China, you need to see a sample and check the quality of your product before production starts. Everything about the product, including how it’s put together, the instructions, packaging, and consolidating need to be carefully checked in person. Many importers either don’t pay enough attention to this process or skip it entirely, which leads to an imperfect product getting mass produced.
5. Poor quality control.
   If there’s one thing you take away from this final piece, it is that quality control is a must when importing from China. One or two orders could ship without an issue, but don’t get in the habit of bypassing QC. It will only come back to hurt you. All you need is one worker to make a mistake or one supplier to change their raw materials and you could face massive problems across the entire production process. QC is crucial before, during, and after the production process. Don’t go without it!
6. Failure to know your numbers.
   Three of the biggest issues we’ve seen from importers over the years is not knowing their landed cost, sell cost, and net margins. Not having this information will lead to you not knowing if you have enough money to carry out your plans. Too often clients start ordering their product only as they’re running low on stock– that’s too late! Then they wind up being out of stock for months before the new shipments are ready. Another thing to note about numbers and timelines is related to public holidays in China. This is when factories go to a complete standstill and will be shut down for days, sometimes weeks on end. As a client, you need to know about these times and anticipate them so you can work them into your production schedule and prevent stock issues. 
7. Lack of knowledge about Chinese culture.
   Working in the Western world vs. the East is completely different. Importers need to know how to deal with Chinese manufacturers to prevent them from inflicting serious harm on their business. 

The best way to avoid these mistakes is to find a reliable sourcing agent like China Sourcing International. Our team is ready to take your product sourcing initiatives to the next level. Email us at [email protected] to get started.