Find the right supplier and you’re practically halfway down the road of successful overseas sourcing. Finding the right supplier, however, is easier said than done.
Evaluating potential suppliers is often a daunting and difficult task. There is no foolproof way of identifying the honest ones from the scammers, and sometimes, the best a buyer can do is rely on a combination of research and gut-feel to reduce the risk of doing business with an obviously bad supplier.
In China, where there are hundreds of thousands of companies to sift through, the challenge can be amplified by as much. Especially, if you don’t know what you’re looking for.
As Steve Dickinson warns in his China Law Blog post, ”Chinese companies are masters of disguise. They use the Internet and sourcing websites to make themselves look much better than they are.” He also pointed out that the first major issue buyers need to hurdle is determining if a potential supplier even exists at all.
So, how do you know if who you are dealing with is legit and you’re not being taking in for a ride? And if, indeed, they are real, how do you know if they are the right partner?
Identifying potential suppliers: Spot the not
The Internet is rife with supplier websites claiming to offer the products you need. Just visit various B2B and B2C platforms then type in a keyword and you can be overwhelmed with the search results.
This is where you can put your stalking skills into good use. Check the company’s website. Search the Internet for reviews. One simple yet effective tip sourcing experts strongly advise is to type in the supplier name and add the word scam. If the company has conned others before, these will surely turn up.
The smart buyer, however, knows spending countless hours on the Internet playing detective isn’t the best way to use one’s time.
The most effective and reliable way of finding good partners is turn to professionals who have years or even decades of experience in dealing with suppliers.
This is where Global Sources comes in handy. It uses a verification system that vets suppliers according to business registration details, manufacturing licenses and attendance in the company’s trade shows, so you can be sure the roster of suppliers is trustworthy.
Additionally, you can access pertinent business information, including company type, factory size, production capability and industry certification, through its supplier-capability-assessment and credit-check services to help narrow down your choices.
In an interview with Global Sources, Mark Stein, president and CEO of US-based Custom Direct Inc., summed up the importance of supplier vetting. “Our customers are putting their brand equity in our hands, not to mention their financial resources, so it’s our responsibility to choose the right suppliers, and participate in QA planning and implementation,” he said.
His company imports bags and luggage from China, and has been using Global Sources for the past 25 years.
But of course, nothing beats meeting suppliers face-to-face. And Global Sources’ industry-specific trade shows provide a venue for that. Happening every April and October, these sourcing events feature new and unique products from verified suppliers in the fields of consumer and mobile electronics, fashion and lifestyle. You can pre-register for free access to any of these shows here.
By attending trade shows, you not only have the opportunity to see product samples up close, you can also witness how suppliers communicate with buyers. This doesn’t necessarily mean how fluent they are in English. Oftentimes, face-to-face meetings give you a chance to catch non-verbal cues that, as cliché as it may sound, “speak louder than words.”
As what Oliver Knack puts it in his blog for Intouch Quality: “What makes a supplier easy to communicate with isn’t just their ability to speak English. Communication problems often arise from the way a supplier communicates, rather than language difficulties.”
After these meetings, you will have a clear impression of what it’s like to work with a supplier. Are you comfortable with them? Do they seem professional? Are they pro-active? Your answers to these questions will dictate if your relationship with a supplier will flourish or flounder.
It must be noted, however, that sourcing partnerships are a two-way street. A successful sourcing journey needs more than just the buyer being able to trust the supplier. Suppliers must also be able to trust the buyer.
Global Sources ensures transparency goes both ways. To do this, the company also vouches for members of its buyer community by asking them to send their profiles with each inquiry. It has currently more than 15,400 buyers verified through attendance at recent Global Sources trade shows.
Factory visits: Keep your eyes peeled
So you’ve narrowed down your list. The next logical step is to visit factories. But not always. Renaud Anjoran explains in his blog how this step often depends on the size of your order. For small orders, say $2,000 or less, he said working with a sourcing agent or company might be more feasible. But for very large ones, failing to do so is courting danger.
ProcurAsia’s Etienne Charlier’s lists down the four major things to watch out for during factory visits. This includes ability to make good products consistently and maturity to survive organizational changes.
CDI’s Stein says “a combination of cost, ability to meet our schedule, suitability of facilities and equipment, and a QA plan in place” are their main considerations when choosing a factory to work with.
Factory visits also give you a chance to ask for documentation. China Checkup’s Matt Slater enumerates the seven most important documents you need to verify here, including tips on how to spot the fakes from the real ones.
Buying product samples is a good way to vet suppliers as well. A good sample delivered to you hot not only shows that a supplier has the means and capability to make your product, it likewise shows their dedication to quality.
Sounds simple? Actually, no. Buying product samples is a time-consuming endeavor. It entails a lot of processes and may take time before suppliers come up with a product that satisfies you.
Fortunately, Global Sources has put together products with instant samples in a user-friendly page. Products have clear images and descriptions, and are categorized by industry to make sourcing easier.
Doing all these steps doesn’t necessarily mean you’ll pick the best of the best. After all, the only way to find out if you had chosen the right supplier is after you’ve done a few orders with them.
But it pays to arm yourself with knowledge, ask the right people for guidance and not to rush on a decision.
Always vet supplier capability and do it carefully. Don’t be afraid to spend a little more bucks to ensure you’re dealing with a legitimate business.
As what Jack Jurken wrote in his Industry Week article: “Success in sourcing from China often boils down to the level of financial and human resources devoted to the effort, in addition to having the necessary expertise.”
“Cutting corners is clearly not the answer since the cost that goes into finding the right supplier is far less than costs incurred when the wrong choice creates costly problems later,” he added.