Below is the front cover and article I wrote for the summer, 2011 edition of City Weekend, Shanghai Home & Office. All about sourcing and finding reliable suppliers.
Below is the full unabridged aritcle:
In order to find the most reliable, long-term supplier for your needs, you first need to define your scope, distribution, cost/retail price targets, and relationship expectations. Once you define your needs, you will need to:
- Search Online
- Network, ask others in your industry
- Attend Tradeshows
- Travel to your ultimate supply chain country to source suppliers
- Work via an Agent, Trading Firm, or Wholesaler
- Buy direct from factory/supplier
The easiest and most difficult way to start looking for suppliers is online research, sourcing sites, blogs, and industry publications. Sourcing sites are great, but on most sourcing sites suppliers are listed at the top of the search based on how much money they pay, not which has been in business the longest, or has the most successful track record, or relevant product to your needs.
Networking by attending industry related events in your community, talking to industry leaders online via blogs
Another option is traveling to the ultimate country which you want to source from; attending industry related sourcing trade fairs, best to go industry specific shows. You can find about relevant fairs by searching online by product name, country and trade fair. You can also speak to others within the industry.
Well traveling to your ultimate supply chain country you can hold in-person visits to the factory/supplier to verify and check out their systems, procedures, ethical, social responsibilities, and product quality. Remember that what you see is not always what you get. If you choose to do an audit yourself you will need to build your own internal requirements. Alternatively you can hire a 3rd party like SGS, Intertex, Veriatas, or another industry specific established and trusted 3rd party who specializes in your industry to validate the potential suppliers systems, procedures, ethical, social responsibility.
You will now need to choose the type of relationship you are looking for? That means are you looking to deal directly with the factory/supplier? Utilize an Agent, Trading firm, or Wholesaler who can look after factory communication, production management, quality control, and shipping. Depending on your purchasing quantities it is best to start buying through a wholesaler to validate the business and build your volumes. Once you start to establish a sizeable order it would be best to go through a reliable and trusted agent or trading company to initial purchase your goods or materials as they can reduce your expenses by overseeing your production and deliverables. Once established most business professionals prefer to deal direct but it is a fact agents and trading companies have a value hence why Walmart, Nordstroms, Costco, H&M, Zara and many other large institutions still utilize agents or trading companies because they recognize the value and importance.
In closing it is important to plan your business from the end product back to the raw materials, fully understand the product cycle, timelines, ethical and social responsibilities along the way and the costs of everything. Look at the cost to do it yourself (employee salary, travel, time, expenses, trial and errors) vs. the cost of buying wholesale, via trading company or agent. In regards to time requirements it can take as long as 6 to 12 months to create a product from concept to delivery at retail level, depending on your business (brand, wholesaler, or retailer) and product type. One last comment if you are really good (H&M and Zara) and avoid being nitpicky (perfectionists) you can reduce this timeline to 6 – 12 weeks.
Jeffrey Clark has been building brands, importing and exporting products from Asia, Europe, North, Central and South America since 1989. Jeffrey is based in Shanghai, China; more can be seen on his blog, http://jeffreyliving.com/ or on his B2B garment supply chain platform at http://sourcetheglobe.com/.