This case study shows how we helped a client to source plastic produce and garbage bags from China on behalf of a client. Their approach involved identifying 39 potential suppliers through market research and pre-selecting 20 that met capability criteria to receive a detailed RFQ. Demand analysis was performed upfront to provide specifications, dimensions, materials, and estimated quantities needed for both produce and garbage bags. 15 suppliers responded to the RFQ with quotes. The top producing regions were Shandong, Guangdong, and Fujian provinces. A major finding was that for produce bags, there were significant specification discrepancies between what the client originally provided in their RFQ versus the actual measurements taken from a supplier sample. 3 Shandong suppliers offered the most competitive FOB quotes at $3.18 to $3.91 per thousand units for produce bags, representing savings of 38% compared to quotes based on the RFQ specifications.
Logistics costs were analyzed in detail from an origin factory in China to the client’s warehouse location in the Netherlands. Ocean freight, duties, port fees, and inland transportation costs were modeled to land at a total delivered cost of €1,566 to ship a 20-foot container. An import cost model was shown breaking down the FOB price, freight costs, duties & taxes, and inland fees to reach a total DDP price. Delivered DDP pricing ranged from €3.74 to €6.99 per thousand units for produce bags and €6.18 to €10.69 per thousand for garbage bags. Our key recommendations focused on clarifying the actual produce bag specifications and auditing the factories of the most competitive FOB pricing suppliers from Shandong province. The case study demonstrated Dragon Sourcing’s effective sourcing process and detailed cost analysis to facilitate supplier selection and purchasing decisions for the client.