Global sourcing has progressed at a huge speed and first-world organizations are opting for low-cost nations for finished components and goods at unparalleled rates. Several organizations have set up sourcing offices in many Asian nations, particularly in China, while other firms are settling on the services of a China sourcing company to execute low-cost sourcing strategies. These procurement organizations assist in offering access to the highest quality resources that are found locally. Buying from China has permitted organizations to enhance their international competitiveness and most above all, emphasize their main business. China has been called the “factory of the world” and is an attractive choice for any business looking for low-cost finished products and semi-finished products and also raw materials for improving profit.
For business owners all over the world, the main priority is the growth of revenue at decreased costs. But in the present global business environment, which is fraught with a recurrent change in the demand of customers and is also inclined to disruption, both the tasks seem to be quite testing.
Sourcing Company in China – Easier, Cost-effective and Safer
There are several China sourcing agencies that assist in offering customized sourcing and supplier verification services. Owing to their dependable network, they can connect with the best suppliers in China and the team will utilize their expertise and experience to make sure that you alleviate associated risks, make the most of the opportunity to source products from China, reduce expenses and secure transactions for a dependable supply chain in China.
Opportunities for Procuring Products from China
For most international businesses, outsourcing the process of manufacturing has turned into an essential aspect. To function in an ever-increasing competitive international market, the importance of a procurement strategy, which involves local buying and low-cost country sourcing has enhanced. By shifting their production function to manufacturers in China, with assistance from a China sourcing agency, many organizations have successfully reduced manufacturing costs. This has aided them to endure competition, sustain and secure benefits even when the economy is undergoing a slowdown. Procurement savings have impacted the net results of organizations remarkably. Also, organizations have improved their earnings by reinvesting the savings to create a significant market for their products by offering really competitive prices to clients.
New Concept in Effective China Sourcing Operations
- They find reliable Chinese manufacturers
- They provide management of the end-to-end manufacturing and sourcing processes
- They deliver quality inspection services and a complete logistics solution
Thus, these China sourcing companies help bottom-line growth for your business with flexible and tailored solutions. China has offered favorable business opportunities for companies across the world with unbeatable growth potential and as a low-cost source of high-quality products and services. It is a valued sourcing partner (as a member of the WTO) and enjoys a favorable labor position, which is advantageous for the manufacturer and the supplier. It is thus not unusual that sourcing companies from across the world have begun operations in China.
If you are looking to hire the services of a sourcing company in China, you need to decide on a business model as per the objectives of your organization. You can opt for a procurement service provider, who will charge a fee (a fixed fee of mixed commission or a fixed fee) for managing the procedure of sourcing products from China on your behalf.
Here are some of the criteria that you should keep in mind while selecting a procurement service provider for your business:
- The agency offers a complete sourcing service that involves supplier identification and pre-qualification, auditing, quotation management, product development and testing; contracting and selection of suppliers, QC management, supplier development, payment, and logistics management.
- The agency sources into the entire country of China and not just in the conventional industrial regions of the Beijing-Shanghai-Shenzhen axis.
- The agency is capable of procuring in other low-cost countries (if required) via a network of fully-owned purchasing offices to challenge the Chinese supply base with different suppliers.
- The team has developed competence in sourcing to integrate efficiently with the sourcing procedure of your organization and has insight into the categories that have to be procured.
- Make sure that the company is able to offset barriers and risks related to sourcing products from China, and is also able to convince an organization to alter suppliers from a long-established base in high-cost economies to a new base in low-cost economies.
- The team has the communication and project management skills needed to interact with all the main stakeholders in your company and obtain their confidence.
It is essential to address and manage the risks associated with China sourcing. Sourcing companies operating in this country take adequate precautions in procuring trained manpower or materials. Employing experienced staff at a procurement service agency is a potentially lucrative strategy to bring down these risks and ensure procurement success.
Sourcing Products from China
Sourcing from China involves discussing with your team what you want. Put together the specifications like quality, quantity, budget, lead time videos, or photos of a similar product as a reference. Additionally, arrange for certifications if the country where you will sell the products needs any and get the license rights in the distribution countries.
Identify Trusted Partners
This is the most testing task, and procurement service providers can help you, especially if you do not speak Chinese. With their local language expertise and an efficient network, the professionals procure and share certifications, photos of the factory, and recommendations from former clients to help you verify suppliers. Reviewing business licenses, signing contracts, agreeing on payment terms, and knowing the place of jurisdiction in the case of legal disputes are integral to ensure a smooth partnership.
When suitable potential suppliers have been chosen, the sourcing service providers share your product specifications to check if the manufacturers can produce those products.
Negotiate
In China sourcing, bargaining about the quantity, quality, price, and time of delivery is nothing out of the ordinary. A high minimum order quantity helps in closing the deals at the best price. Therefore, during the negotiation process, the sourcing experts use their proficiency to get you the best deal from the supplier.
Process of Production
Though sampling is the least complicated part of the entire procurement process, never skip it. Keep going back and forth in this process till you are happy with the result. You will only have to pay for the sample if you decide not to go ahead with an order. Otherwise, the sampling cost is deducted when you order in bulk.
The sourcing service providers will keep sharing photos and regular updates with you to avoid production downtime arising out of poor communication. This helps in fixing problems during the manufacturing process and not at the end when it turns expensive.
Before shipping, the products are inspected for quality.
Logistics and Payment
Sourcing agencies assist you with the shipping and labeling (type of goods, import and export country, quantity and value) of the goods.
Make sure to clarify with your bank if and how they transfer payments to China. As some manufacturers have subsidiaries in Taiwan or Hong Kong, transferring money from the US or Europe may be easy.
Dragon Sourcing understands what your core objectives are behind opting for China sourcing. We help you obtain what you want at the right price and on time.
Schedule a sourcing discussion with us.