How do you approach a manufacturer in another country to let you import it to yours? Priority No. 1 is to select a product that is successful in its present domestic operation and has the look and feel of export potential (meaning everybody, everywhere —already loves it and is likely to continue doing so even in the United States). Priority No. 2 is to go to market with what you are familiar with.

Priority No. 3 is to view the potential of the product in front of you through the eyes of consumers in your import market of choice, in this instance, the United States.

That said, let’s say the manufacturer you are interested in makes more than 12 different styles of shoelaces. Which one should you import?  Easy.  The one that sells like hotcakes in his market. The one you love the best.  The one you know that customers in the United States will love the best. Try to choose one item that you can come close to providing an affirmative response for in regard to all of those statements! 

Next, script your communication to the manufacturer. You might want to also review Finding a Supplier for the Product You Want to Import.

Lastly, nothing beats a face-to-face encountering when you want to seal a deal on representation.  

Once you have gathered information on your prospective supplier’s product and reviewed the product for import readiness, you must convince the manufacturer that you are capable of importing the company’s shoelaces to your part of the world.

How do you go about it?

It goes like this: focus, explain, emphasize and stroke.

Focus on the target market. Give the manufacturer an introduction to the market conditions in an unknown country. This will intrigue him.
Explain how you do all the work and incur all the risks.
Emphasize that he will make most of the money from the transaction.

Stroke him by enumerating the benefits you can bring to his business by exploring other markets on his behalf.
Your goal is to get the manufacturer excited about the possibilities and to convince him that you’ve got the expertise to pull it off. It’s best to be prepared for a range of possible responses. Your follow-up exchange might go like this:

Importer: “Do you sell to the United States?”
Manufacturer: “Not yet.”
Importer: “Well, I think it’s a good market for your shoelaces – rich in upside potential! I’m in touch with several agents and distributors here who are looking for your type of shoelaces, and that means fast, hassle-free additional business for you!”
Manufacturer: “Sounds great! How do we get started?”

In this instance, you’re breaking totally new ground for him, so you can offer him your strategy as to how to get started. But you might find yourself dealing with a manufacturer who already has some international operations in place. If you want to get in on that action, you must convince the person you’re dealing with that you are flexible, cooperative and interested primarily in generating additional business for him. Here’s how you might work such a situation to your advantage:

Importer: “I have contacts in the United States. May I offer your products there?
Manufacturer: “We already do business there.”
Importer: “On an exclusive basis?”
Manufacturer: “No, but we are open to expanding our business there.”
Importer: “I sell through importing distributors who service the discount chain stores. Does that differ from your present customer base?”
Manufacturer: “Yes. Right now we sell only to small mom-and-pop retail outlets that are serviced by a local trading company.”
Importer: “If I generate reasonable business within a few months, will you allow me exclusivity in United States on all discount chain store business?”
Manufacturer: “If I see you generate the sales, I’ll have no problem giving you exclusivity.”
Importer: “Fair enough! I am confident that I can generate the sales you’ll want to see in six months.

At that point, if it is acceptable to you, I would like to meet with you to work up an agreement protecting my efforts.”
Manufacturer: “Fine. In the meantime, let’s get some idea of what you need to get started.”

That’s all there is to it. Now that you have gone to the trouble of finding a product to import, shoelaces, and proving to a manufacturer you can import it, it’s time to consider whether you need a written agreement as to how you will do business with the company. We’ll discuss that in a future article.

How to Choose the Right China Sourcing Agent or Buy Wholesale from China 

How to Choose the Right China Sourcing Agent or Buy Wholesale from China can be pretty a tasking job in particular if it is your first time. It requires ample training as it is time-consuming and a lot of assets are worried (monetary resources). So, to ease this undertaking one wants a China buying agent to characterize him in the actual market and be in a position to get the proper merchandise at the satisfactory manufacturing unit prices.

There are a handful of these sourcing retailers and every declare to be the pleasant in the business. However, for the reason that there are no set requirements to measure the stage of every agent, it is upon the importer to use exceptional techniques and potential to confirm their authenticity and effectivity earlier than you set up any formal work relation.

When selecting a China sourcing agent think about the following six-point verification technique to assist get the excellent who serves your desires as distinct clients have specific wishes to fulfil.

1. Make inquiries and request them to furnish you with their enterprise registration permit, criminal compliance file and their export license in China, affirm their authenticity with the neighborhood change authorities or with 0.33 birthday celebration companies.

2. Trust is the key to any robust work relation, ask the China sourcing agent in query to furnish you with at least 5 consumer reference from your region of import.

3. Let the sourcing agent give an explanation for their safety measures in case of any kickbacks from the suppliers bearing in thought that ‘kickbacks’ is a managerial challenge.

4. Choose sourcing retailers relying on the consumer need. Some china sourcing marketers will provide unique offerings over others. For instance, some sourcing dealers will no longer grant re-branding offerings and associated services.

5. Identify china sourcing sellers who are professionals in a precise type of product as they are very accurate at what they specialize in.

For instance, ‘Foshan sourcing agents’ are professionals in constructing substances and ceramics and most instances are positioned close to the manufacturing industries of your product cluster as a result lowering the value of transportation and are greater probably assist out must some thing go incorrect at some stage in production.

6. After figuring out your sourcing agent, put the agent into a take a look at with a small order to verify the skillability of his services, by no means throw in a full-size sum into your first order till you can develop some self belief with your sourcing agent.

Feel free to pose any different expert questions regarding the offerings they offer. If the above factors are totally satisfying, then you can relaxation certain you have the fine China sourcing agent.

How do sourcing businesses cost for their services?

The prices worried relies upon on the assignment at hand. However, sourcing businesses used to base their costs on a fee for the remaining order value. These days most china sourcing retailers have adopted a constant pricing strategy.

What type of offerings can you get from a Chinese sourcing agent?

When conducting a China sourcing agent ability you anticipate to get some offerings back. Some offerings accessible include;

● Product sourcing and pattern consolidation

● Procurement brain and procurement outsourcing

● Supplier lookup and contract negotiation

● Supervised manufacturing in China manufacturing facility and rebranding

● Quality manipulate and fine inspection

● Logistics and shipping

● Product evolution and dispute management

What is the minimal order extent ‘MOQ’ a sourcing agent in China can process?

The minimal order volume ‘MOQ’ of any product is calculated relying on the manufacturing unit or dealer requirements, and they vary. However, China sourcing marketers may additionally select to have their ‘MOQ’ involving the economic fee or the minimal quantity of items one can order at any given time.

For instance, a China sourcing agent may additionally have the ‘MOQ’ for product X as $500, while a distinctive sourcing agent might also have the ‘MOQ’ for the identical product as one hundred portions and every piece value $2, consequently translating to $200. The MOQ is now not steady and is variant with one-of-a-kind sourcing agents.

Can you assist me get a dependable Yiwu shopping for agent?

This is pretty easy, and yes. simply like when looking out for any different china sourcing agent, you need to have a precise product in mind.

I believe, ‘promotional merchandise’, as Yiwu is the most enormous world market for ‘inexpensive products.’ The system ought to be：

Ø Choose a phrase extra like ‘Yiwu shopping for agent’ on the search engine.

Ø Pick at least eight sourcing marketers inside the 5 districts of Yiwu or at least have an workplace there.

Ø Make an effort to contact them and time table an appointment thru a video name or any different ability like Skype.

Ø Then after figuring out a few, strive to habits thorough lookup on the offerings they provide relying on your needs.

Can you advocate a Guangzhou, sourcing agent?

Guangzhou is bright with severa sourcing sellers like; Imex sourcing services, Asiaction sourcing, and vitasin to clip on a few. ‘Foshan sourcing’ is amongst these with a legitimate foundation. However, you would like to seem to be even nearer as there are masses of them.

Do sourcing marketers in China furnish logistics and transport support?
Once they acquire a product, most china sourcing agents’ associate with freight forwarding organizations who provide logistics and different comparable services; however, most of these marketers have logistics and delivery help inclusive in their complete package deal as soon as you have interaction them.

Buying wholesale from China is pretty a system and time-consuming. However, this assignment can be effortless and exciting with resource from over fifty china sourcing marketers and suppliers.

The Reasons Why You Need A China Sourcing Agent

Basically, the main feature of a China sourcing agent is to supply and become aware of in shape suppliers primarily based on the technical standards, and character purchaser requirements. The technique of finding out a provider is no longer easy. However, with the assist of expert China wholesale sourcing suppliers, it can be a lot less complicated for a beginner to begin purchasing.

✱ Competitive Price

Believe it or not, most China sourcing dealers may additionally assist you get a a whole lot higher charge towards your own. Why? Because they can collect portions from unique clients collectively to ask for more cost effective charge from the producers and suppliers, and in lesser time as a consequence saving the client time and money.

✱ Quality Control

Most sourcing agent in China are expert in product sampling, manufacturing facility audit and mass manufacturing inspection. They are well-educated how to supply items at certified standard. Hence, limit the hazard of discovering terrible first-rate wholesale suppliers throughout purchasing.

✱ Wide Range of Products Availablity

Different from Chinese wholesale factories who can solely supply restrained product range, with the assist of a China sourcing agent, you will without difficulty get get right of entry to to the contemporary items and apprehend the market style due to the fact they are managing hundreds of merchandise in a whole.

✱ Shipping and Logistics Assist

The Chinese wholesale sourcing businesses additionally cowl the logistics strategies involved, provider verification, warehousing and act as a hyperlink between the patron and the dealer in China.

Generally, they assist the patron perceive real healthy suppliers based totally on patron desires accordingly informing the patron on the tariffs, taxes and any import/export adjustments involve.

To sum up, China sourcing agents assist you a lot on furnish chain management.

Have a new product idea that shocked the world? what are you waiting for? When developing and pricing new products overseas, the first step should be to check whether similar products already exist on the market and what the prices are. If there are similar products, check out how to differentiate your ideas and use the prices of competing products as a starting point. This is needed to bring products to market and price them fairly.

Let me first sketch that many people sourcing products from abroad will be relevant. like this

You want to launch a good idea on the market: large, durable, lightweight high-style eco-friendly canvas tote bag with waterproof function, adjustable shoulder straps, which can be adjusted according to your comfort, and has multiple internal and external Pocket and can hold baby items and computer equipment at the same time. For user convenience, the bag will include a replacement pad, a tablet pouch, a smartphone case and a laptop case.

With a pencil in your hand, you can draft your idea on paper and prepare it for submission to a potential supplier who can make your product meet specifications. At the same time, you tore off photos from magazines, newspapers and catalogs that look similar to your tote bag style. In addition, you have captured website screenshots of some products that capture the essence of your idea, or combine parts of your idea (baby tote and computer gear tote) or almost all components (color canvas tote )combine it all toghther.

Congratulations! You are ready to show your ideas to the supplier! You are ready to draw sketches, photos and screenshots in a neat and organized way. But wait. You forgot to consider the price. What price are you looking for on this product? What price does the market offer for your products-retail price is $ 25, $ 35 or $ 60 (excluding shipping) of course?

Once you’ve identified a reasonable retail price point, step back from there to see what price you need from your supplier when importing your product. Assume that based on the initial 1,000-bag order, the price per bag is approximately $ 5. Then, when you take into account taxes, duties, customs clearance, transportation and insurance, its landing price (ie home delivery) is $ 11 per bag. This way, your profit per bag is between $ 14 and $ 59. But wait. There is more to consider.

After you import the bags, you must store them somewhere, unless you think you can temporarily store 1,000 bags in the basement. However, if the number of imports is large, you must set up a warehouse, order boxes for luggage, establish a direct transportation process (when someone orders luggage, they must be shipped in stages), and a transportation method. All these steps add extra cost to the product. So now that you’ve deducted an additional $ 7 from the cost of $ 11 per bag to cover all other incidental but significant costs associated with bringing the bag to the customer, you now have a cost of $ 18 per bag. Yes, fortunately, you can still make money. Oh, who will sell the product once it is available on the market?

This is an additional cost for you and others. Now your fees are up to $ 20 per bag, including sales costs, and depending on the retail price, your profit will range between $ 5 and $ 39 per bag. Other factors to consider: Are you going to sell business-to-business (B2B) or business-to-consumer (B2C)? If you sell B2B, the retailer selling the tote will add a high markup (its profit) to your price, making the retail price higher. By selling B2C, you can keep your profits steady and maintain most of your profits, but you will most likely end up selling a small number of bags because you sell one bag at a time instead of selling a bunch of tote bags to a retailer for resale.

Now that you’ve considered pricing and profit, you can start purchasing products and eagerly waiting for product samples.

I will cover these two key steps more fully in another article. Be careful!

Now that you have analyzed your business requirements and completed your vendor search, you are ready to start the meat-and-potatoes of the vendor selection process. A well-written Request for Proposal (RFP) or Request for Quotation (RFQ) is the key for selecting the best vendor at the best value for your company. Writing a RFP or RFQ is not difficult if you understand the objectives and function of the document.

Decide: Request for Proposal or Request for Quotation
Request for Proposal (RFP)
An RFP is used for services or complex products where quality, service or the engineered final product will be different from each vendor that is responding.

Request for Quotation (RFQ)
An RFQ is used for commodities, simple services or straightforward/uncomplicated parts with little or no room for product or service differentiation between responding vendors. Negotiation points could include delivery schedules, packaging options, etc.

Objectives of a RFP or RFQ
Obtain detailed proposals in order to evaluate each vendors’ response so that the best interests of your company are met on all fronts
Leverage the competitive nature of the vendor selection process to negotiate the best possible deal
Ensure that the interests of all stakeholders within your company will be met and a consensus reached
Puts your company in control of the entire vendor selection process and sets the selection rules up front
Starts building the partnership between you and the vendor right from the start
Sections of the Request for Proposal or Request for Quotation
The RFP or RFQ should contain the following sections. Keep in mind, that each document will be different depending upon the type of company and product you are searching for.

Tailor each section for your individual needs.

Submission Details
Deadlines, mailing address of your company, contact person for questions and clarifications
 
Introduction and Executive Summary
Write this section last after the entire document is finished. This is used to provide prospective vendors with a brief overview of your company and the requirements for your product or service.
 
Business Overview & Background
Give a brief overview of your business, products and market sector that you cater to. This will help your prospective vendors understand what business needs you are trying to fill with the vendor selection process. Also, provide important background information that will benefit the vendor when responding.
 
Detailed Specifications
This should be the longest section of the document. For an RFP, it will contain the qualitative measures and requirements that will drive the vendor selection decision. For an RFQ this section should provide the quantitative measures that you will be looking for in the vendor’s response. Example criterion includes:
Product drawings
Engineering tolerances
Service levels
Milestones
Deliverables & Timelines
Technical or Business Requirements
Software functionality
Hardware requirements

Assumptions & Constraints
Any assumptions and/or constraints that the prospective vendors need to be made aware of must be listed here. Failure to be forthright and upfront with the vendor will open the door to renegotiation of the agreement at a later date and runs the possibility of straining the relationship you have with your vendor. Possible topics include travel expenses, upgrade/modification costs, licensing rights, etc.
 
Terms and Conditions
Any terms and conditions of the contract must be listed in order for the vendor to make a fair and honest response. These may include financing options, contract length, renewal options, warranties, delivery penalties, service levels, etc.
 
Selection Criteria
The final section should be an overview of the selection criteria that you will be using to make your decision. Some companies prefer to keep this information totally confidential; while other companies believe this will help prospective vendors focus on what is important to your company.
Distribute the RFP/RFQ to Selected Vendors
Finally, compose a cover letter and send two copies of your RFP or RFQ to each of the vendors that you selected from your search process. Make sure that appropriate contact information is included in order to provide assistance to any vendor that needs it.

The vendor selection process can be a very complicated and emotional undertaking if you don’t know how to approach it from the very start. Here are five steps to help you select the right vendor for your business. This guide will show you how to analyze your business requirements, search for prospective vendors, lead the team in selecting the winning vendor and provide you with insight on contract negotiations and avoid negotiation mistakes.

Analyze the Business Requirements
Before you begin to gather data or perform interviews, assemble a team of people who have a vested interest in this particular vendor selection process. The first task that the vendor selection team needs accomplish is to define, in writing, the product, material or service that you are searching for a vendor. Next, define the technical and business requirements. Also, define the vendor requirements. Finally, publish your document to the areas relevant to this vendor selection process and seek their input. Have the team analyze the comments and create a final document. In summary:

Assemble an Evaluation Team
Define the Product, Material or Service
Define the Technical and Business Requirements
Define the Vendor Requirements
Publish a Requirements Document for Approval
Vendor Search
Now that you have agreement on the business and vendor requirements, the team now must start to search for possible vendors that will be able to deliver the material, product or service.

The larger the scope of the vendor selection process the more vendors you should put on the table. Of course, not all vendors will meet your minimum requirements and the team will have to decide which vendors you will seek more information from. Next, write a Request for Information (RFI) and send it to the selected vendors.

Finally, evaluate their responses and select a small number of vendors that will make the “Short List” and move on to the next round. In summary:

Compile a List of Possible Vendors
Select Vendors to Request More Information From
Write a Request for Information (RFI)
Evaluate Responses and Create a “Short List” of Vendors
Request for Proposal (RFP) and Request for Quotation (RFQ)
The business requirements are defined and you have a short list of vendors that you want to evaluate. It is now time to write a Request for Proposal or Request for Quotation. Whichever format you decide, your RFP or RFQ should contain the following sections:

Submission Details
Introduction and Executive Summary
Business Overview and Background
Detailed Specifications
Assumptions and Constraints
Terms and Conditions
Selection Criteria
Proposal Evaluation and Vendor Selection
The main objective of this phase is to minimize human emotion and political positioning in order to arrive at a decision that is in the best interest of the company. Be thorough in your investigation, seek input from all stakeholders and use the following methodology to lead the team to a unified vendor selection decision:

Preliminary Review of All Vendor Proposals

Record Business Requirements and Vendor Requirements
Assign Importance Value for Each Requirement
Assign a Performance Value for Each Requirement
Calculate a Total Performance Score
Select the Winning Vendor
Contract Negotiation Strategies
The final stage in the vendor selection process is developing a contract negotiation strategy. Remember, you want to “partner” with your vendor and not “take them to the cleaners.” Review your objectives for your contract negotiation and plan for the negotiations be covering the following items:

List Rank Your Priorities Along With Alternatives
Know the Difference Between What You Need and What You Want
Know Your Bottom Line So You Know When to Walk Away
Define Any Time Constraints and Benchmarks
Assess Potential Liabilities and Risks
Confidentiality, non-compete, dispute resolution, changes in requirements
Do the Same for Your Vendor (i.e. Walk a Mile in Their Shoes)
Contract Negotiation Mistakes
The smallest mistake can kill an otherwise productive contract negotiation process. Avoid contract negotiation mistakes and avoid jeopardizing an otherwise productive contract negotiation process

Outsourcing has seen a lot of press over the years. Some look to outsourcing as the savior of their company, while others see outsourcing as an evil, job-killing management tactic. Before you start to evaluate if an outsourcing strategy is right for your company, you need to understand what it is and what it is not.

Outsourcing Defined
Outsourcing is the contracting out of any task, operation, job or process that was originally performed by employees within your company to a third party for a significant period of time.

These outsourced functions can be performed by the third party on-site or off-site. Hiring a temporary employee while your secretary is on maternity leave is not outsourcing.

The most common story of outsourcing in the news today involves jobs that are sent overseas to countries like India or China—often manufacturing jobs, but outsourcing is not limited to this sector. It is more commonly called offshoring. Examples include customer service and tech support call center jobs, as well as computer programming jobs. Examples of jobs that are generally safe from being moved overseas are janitorial services and security services, though completely outsourcing a department or division of a company may remove the need for these jobs in that location so that they can be eliminated.

Why Outsourcing?
There are many reasons why a company may choose to outsource a particular function of their business, which may include:

Resource Shortages
A particularly strong reason to outsource involves a shortage of a critical resource. This can be available employees that possess knowledge in a certain area (e.g., engineers), the availability of raw material (e.g., petroleum or minerals) and an available labor force that possesses a necessary level of expertise at the right price.

Realignment with Core Business
Some peripheral operations are outsourced frequently. It gives the managers the ability to concentrate on the core business issues instead of devoting resources to areas that may be necessary but are not related to the business’ core competencies. A good example is a major hospital that outsources its security operations to an outside company that specializes in security.

Cost Savings
The prices of labor and/or materials keep increasing, and competition keeps forcing prices lower. If there is an outsourcing solution that can save your company money and overcomes the disadvantages of outsourcing, these areas should be investigated.

Business Flexibility
Seasonal or cyclical demands that ebb-and-flow put varying demands on the resources of the company. An outsourcing contract could provide the flexibility needed to stabilize these varying demands. Example: A business brings in extra accountants during tax season and when being audited by the holding company that owns the business.

Reduced Overhead Costs
Some functions require a large outlay of money just to get started. This expenditure could be avoided by contracting with a third party. For example, outsourcing a call center rather than undertaking a costly expansion to the telephone system and office space to meet increasing customer service demands.

Common Outsourced Areas
Although many areas and functions are outsourced, here are some of the frequently outsourced areas:

Information Technology Functions
Network and Telecommunications
Human Resources and Insurance Administration
Accounting
Marketing
Security

I hope I am not dreaming. I heard you have a great product ready to import or export, now all you need to do is get it in the hands of a few good customers, and you are off to international trade nirvana. Wait, not so fast. How do you know the product will sell? Will you make money selling it? How should you price the product? All importers and exporters must face these questions at some point if they want to achieve success in the global marketplace.

Here are a few solutions to guide you in the process.

Have a Quality Product or Service
Start with a product or service that you know will sell—if not everywhere, at least somewhere. You will improve your odds of picking a winner if you cultivate a knack for tracking trends, spotting potential trends or even creating game-changing trends. Remember the popular line of stuffed animals called Beanie Babies (as shown), or the Cabbage Patch dolls? Had you realized those products’ export potential early on before they became best-selling products, you would have made yourself a millionaire four times over in a very short period. The same holds true for Japan’s Hello Kitty line of products, which is based on a fictional character produced by the Japanese company Sanrio in 1974. Had you found that product early on and asked for exclusivity from Sanrio to market it in the United States, your company name would be mentioned here as a success story.

That’s the kind of foresight needed to pick import and export winners.

Track Your Financials
No matter what form of business you run, you don’t want to wait until you get to the end of your calendar year to find out where you stand in terms of profit and loss. It’s best to prepare monthly financial—income statements, balance sheets, and cash flow statements—as you go.

If you haven’t made a sale yet, you are probably asking yourself at this point why you need to keep these detailed financial records. It’s simple: Even though you may have minimal sales, or none at all, in the first few months, you are still spending money. You have expenses. And sooner or later, every business needs working capital to grow.

Another situation that requires monitoring expenses would be one in which, after running your company for a few months, you decide to go to a bank for a loan to help grow your business. Before the bank decides if you’re a good credit prospect, it needs to see some details on your company’s financial history—namely, your year-to-date sales, expenses, profit-and-loss statement, preferably prepared by your CPA or a reputable accounting organization. This not only helps you control costs but also tells you at a glance if you are making money or losing it and where adjustments need to be made.

Develop Competitive Pricing
Whether you are importing or exporting, you must develop competitive pricing that includes your profit margin or commission, whatever the case may be. Consider the following criteria to determine just how high or low you can go on your markup:

•    Uniqueness: Are you first to market—then price higher.
•    Quality: Is the product quality upscale or marginal—price accordingly.
•    Your cost: If it’s high, keep your markup low.
•    Newness: Price higher on newer and lower on established.
•    Customer contact: Did the customer ask for your product or did you approach the customer?
•    Product Positioning: Place it in the best light to determine the price at which you will be able to sell it.
•    Direct: You can afford a higher profit margin.
•    Competition: Price to play (compete) in the global game.
•    Government policies: Can have a direct and indirect impact on pricing policies.
•    Are you associated with an internationally known celebrity? Consider yourself fortunate to be working with a celebrity, and go for the higher price.

Introduction
Quality is an important part of the supply chain, whether it is quality inspections during the manufacturing process, quality checks before goods arrive at the customer, or checking the quality as raw materials and parts enter the factory.

Before any part or raw material is used in a manufacturer of a finished good that will be delivered to a customer, it is the responsibility of the purchasing department to ensure that the materials that arrive are of the correct quality specification.

Quality in the Purchasing Process
When the purchasing department is looking at the procurement of materials from suppliers they will have been given some guidance by the manufacturing department, research, and development, or the quality department.

This should include a variety of information about the item to be sourced, such as:

Physical description
Dimensional measurements
Chemical composition
Performance specifications
Industrial standards
Brand name 
Physical Description 
The purchasing department must know the physical attributes of the part they are required to source.

For example, if the required material must be made of a certain shade of a blue, then the purchasing department must be able to communicate that requirement to the potential suppliers to ensure that the specification can be met.

Chemical Composition 
This is very important for sourced materials that are used in the chemical process.

The quality department should give the purchasing team a detailed list of chemical specifications of the required material.  This should include a list of characteristics and specifications that the materials should conform to, as well as the ranges that the materials must lie within.

For example, a sourced chemical may be required to have a pH of between 5.6 and 5.9; otherwise, the material would not be suitable for the manufacturing processes.

Dimensional Measurements
For a part to be used in the manufacturer of a machine the part must conform to certain dimensional specifications.

For example, if the manufacture of a finished item required the use of a Pentalobe TS1 screw with a length of 4mm, then the supplier must be able to produce the item in that correct size.

Performance Specifications 
If a part is required to withstand certain forces or perform in a particular manner, the purchasing department must find a supplier that can achieve those specifications.

For example, on a household item such as a washing machine, the rubber belt that is used must be bale to withstand certain forces and not fail within a certain number of revolutions.  This quality measurement is key for a business if they are to produce finished goods that are reliable in the eyes of their customers.  Therefore, it is important for the purchasing department to find suppliers who can provide parts that meet quality specifications.

Industrial Standards
Some parts required in the production of finished goods must conform to certain industry standards.

These standards are set by a number of trade or industry groups who try to maintain a certain level of quality.

 By having an item that conforms to a particular industry standard, the customer will have a level of confidence in the product.

There are a number of industry standards that are used, such as Society of Automotive Engineers (SAE), which is a global association of more than 128,000 engineers and related technical experts in the aerospace, automotive and commercial-vehicle industries.  The society has hundreds of standards that relate to different technical aspects of manufacturing.

Brand Name
Sometimes the quality department or development team will inform the purchasing department to only source a particular brand name.

This may be due to the specific nature of the part made by one company or the level of quality it has over competitors.

Summary
The quality of the parts and raw materials that are used by a company makes a difference to the finished products that are sold to their customers.

By ensuring that the purchased parts are of a specific quality, as defined by the development, manufacturing, or quality departments, the purchasing department is ensuring that the quality of the finished goods is maintained.

Got a great product idea? Then get ready to source and import it. The whole point of importing is to broaden your selection of suppliers worldwide, lower prices and increase profit margins, all part of a global strategy to become a competitive force in the marketplace. Let’s take a look at how to do that.

Order It on the Cheap.
Let’s say you ask a United States manufacturer to make hammers for you to complement your already existing line of hardware products; they cost $1/unit based on a minimum order of 10,000 units.

You ask a manufacturer in Korea to make the same hammer and it’s 25 cents a unit based on a minimum order of 5,000 units.

Even after adding transportation, your markup, tariffs, duties, exchange rates, and insurance fees to your price, you will still net a cheaper price per unit going with the Korean supplier versus the U.S. supplier. Shop around. This may not always be the case, but you’d be surprised at how manufacturers in countries with low labor costs can produce goods at remarkably cheap prices. And the quality is acceptable provided you keep your eye on it.

Buy Large Quantities to Keep Your Transportation Cost Down
There is a huge difference between ordering 1,000 units versus 10,000, and it’s not just in the number. It’s also in the freight savings. Say it costs $500 to ship 1,000 hammers, or $.50/unit. From the same manufacturer, to ship 10,000 units, its $700, or $.07/unit. It pays to negotiate larger orders to save money on freight costs.

Oftentimes, the price per unit also goes down when you order larger quantities.

Import From a Country Close to Yours to Save on Transportation Costs
Are you based in the United States? Then think about importing from Mexico or Canada. The proximity shortens the transportation route, reduces the freight expense and allows for faster deliveries.

Plus, NAFTA offers some nice international trade incentives.

Purchase the Same Product in Different Colors
On those hammers, most likely you will pay a one-time investment for the design and the manufacturing mold to produce it. Ask your supplier to make it in five different colors. Spread the investment over many SKUs (standard stock-keeping units) to save money. Besides, your customers will be happy with so many choices.

Track Your Imports with Online Software
There are a variety of software packages available online that will help you track your sales, inventory and order fulfillment in real time and all with the goal of boosting the delivery speed of your shipments while saving on transportation. Check out Visco Software for Importers and Industrious Software.

Establish Creative Payment Terms
Instead of paying for goods in full upon delivery, ask your supplier for a time payment, usually, 30, 60, 90, or even up to 180 days to pay the amount in full after title to the goods is transferred to you. Importers prefer this payment method, but obviously, it will compromise your supplier’s cash flow. Negotiate until it is a win-win for both parties. Check out “Methods of Payment: Terms, Conditions and Alternative Financing Sources for Export Sales” for more ideas that can equally apply to importing.

Globalization and the internet have made sourcing products from overseas more accessible than ever before. The ability to get access to products at significantly lower prices has made sourcing a very appealing option for many businesses. Small and large businesses alike are utilizing web resources to gain access to vendors that were once out of reach.

However, sourcing products overseas may seem like an overwhelming task for those who have never done it before.

To demystify the process, I’ve outlined a simple step-by-step plan to help you get started.

Difficulty: N/A

Time Required: Varies

Here’s How:

1. Choose a Product

   The first step is to decide what type of product you are looking to source. A well-defined product is a key to success, efficiency, and profitability. Most people choose to source products overseas because they are looking for a way to earn a quick buck; the problem with this approach is that there are so many other variables that a person needs to think about. Ask yourself:

   • Is there a target market that wants this type of product?
   • Does your product fill a need within this market?
   • Are you trying to source a niche product or are you looking for a variety of different products to sell?
   • What are some of the benefits and drawbacks of your product?
   • Does this product interest you in any way? Would you buy this product for yourself?

   There are many reasons why you want to take the time to answer these questions. You will be investing time, effort and financial resources toward sourcing your products from overseas, taking the time to think through what you are trying to accomplish will only help you. For instance, does it make sense to invest in a product that has no customer base?

1. Identify Specific Countries

   Not every country produces every type of product, and certain countries have advantages that keep costs to a minimum. Therefore it is essential that you figure out what countries specialize in the products that you trying to source. For instance, China has access to a great deal of metal whereas other countries don’t. Consequently, if you are trying to source a metal home furnishing product, then China would probably be the best country for sourcing.

   A couple of great resources to explore are Background Notes and Country Commercial Guides. Both sites will help you hone in on the specific countries that specialize in your product.

   This simple step will save you a tremendous amount of time and headache when looking for overseas suppliers.

1. Find a Supplier

   Once you have identified the optimal country for production, it’s time to find a supplier. The great news is that there is an abundance of web resources to help you find the supplier that best fits your needs. Thomasnet.com and Globalsources.comare excellent resources that can help you get started quickly. Simply type in your product and country of origin and you will be shocked at the sheer number of overseas suppliers. For a more comprehensive guide to finding overseas suppliers, check out Supplier Guide to Sourcing Your Product Overseas.

2. Choose the Right Supplier

   Once you’ve identified suppliers, take a moment to research each of the companies on your list. Begin with a quick Google search; look for reviews, detailed company information or problems related to this supplier. The more background information you have about the supplier, the better!

   When contacting the supplier, make sure you ask the questions that matter to you. Here are some sample questions to think about:

   • What specific products does the supplier offer?
   • Are their minimums when ordering their product?
   • What discounts do they offer for purchasing larger quantities?
   • How long does it take to ship an order from time of purchase?
   • Does the final price include shipping and duties/taxes?

   For a comprehensive list of questions, check out the Overseas Supplier Checklist. Every supplier has their own rules and requirements. You can choose the right supplier simply by identifying the requirements that best meets your business needs. Also, be an informed consumer; don’t be afraid to contact several suppliersto compare prices.
   

1. Request Product Samples

   Before you purchase anything from an overseas supplier, insist on receiving a product sample. The main reason to request a product sample is to ensure that you review the quality of the product. You do not want to work with any supplier that skimps on quality.

   Another great reason to request product samples is to have the ability to present actual products to prospective customers.

   The more ammunition you have to set yourself up for success, the better the outcome. So my advice to you is to request a product sample before you finalize any agreement!

2. Finalize Agreement with Overseas Supplier

   You are now ready to finalize an agreement with an overseas supplier. Make sure you have everything in writing as issues typically arise when language barriers exist. Some key points of an agreement between an overseas supplier and a US importerare:

   • Product Specifics
   • Pricing
   • Payment Terms
   • Shipping Terms
   • Delivery

   For a comprehensive list of overseas supplier agreement options, check out the Overseas Contract Checklist.

When you run an ecommerce business, one of the most important details to handle is how you will ship your products to your customers. While shipping out of your garage works well in the startup stage, once you outgrow this phase, that model becomes unsustainable.

There comes a point in every business owner’s life when they realize they need to  streamline their logistics process, said Krishna Iyer, director of strategic alliances for ShipStation. If you’ve reached that point, you may be wondering how to affordably outsource your shipping needs to third-party providers with the least disruption to your customers and to your business.

Business News Daily spoke with industry experts to help small online retailers determine whether now is the right time to outsource, and if so, how to do it. [Learn about ecommerce shipping basics in our guide.]

Should you outsource your shipping?

If you’ve been shipping products out of your home, trusting a third party can be difficult. Iyer said business owners need to take a hard look at their finances to decide if it’s time to use shipping software and/or hire another company to handle shipping for you.

“When looking to outsource shipping, business owners should consider where they are shipping products to most often, how intricate their fulfillment procedures are, what the returns experience looks like for their customers and what markets they would like to expand to,” Iyer said.

Iyer listed a few pros and cons of outsourcing.

PROS

• Outsourcing allows merchants to focus on their core competencies, such as product development, marketing and long-term growth strategy
• Third-party shippers are often better suited to handle shipping, packing and fulfillment
• You can decrease your business’s order-fulfillment time and possibly save your customers money

CONS

• If you sell large products, it may cost more in the long run because of the extra warehouse space needed to store your products
• Some third parties have complex pricing structures that can be difficult for merchants to understand
• Sometimes the returns process suffers when using a third-party shipping company. (Some customer service functions are out of your hands.)

Options for outsourcing

Online retailers have a few different options to consider when outsourcing, including renting warehouses, drop-shipping and using third-party logistics (3PL) companies.

“It really depends on your business and what you’re selling, and the materials you need to do business,” said Sam Ely, director of LTL operations at uShip.

Warehouse rentals

This practice is common among growing online retailers. Merchants rent warehouse space near high-population areas so goods can be delivered to consumers faster and cheaper than they otherwise could from business owner’s or the manufacturer’s location. (Shipping software can help you remotely manage your inventory and orders.)

Drop shipping

If you don’t want the hassles that come with renting warehouse space, drop shipping bypasses warehousing and allows you to ship orders and track inventory directly from the drop shipper. Instead, when a customer buys a product, you, the merchant, buys the inventory from the drop shipping company that then ships the products to the customer directly.

Third-party logistics

3PL is a broad term that encompasses many different services, but, essentially, it’s hiring another business to optimize your supply chain. This could mean everything from handling the entire shipping process to warehousing, controlling the inventory process, providing  in-depth reporting, etc.

Going with a 3PL over the other outsourcing options comes with a hefty price tag, which might be difficult for some small businesses to handle. As a business owner, you need to weigh the pros – not having to deal with the nightmarish web of shipping duties – with the cons, like the large upfront investment these services require.

How to choose a provider

As you weigh your options, Iyer offered some tips for finding an outsourcing partner.

Understand your business’s needs. Envision the customer-fulfillment and delivery experience you want your customers to have, then communicate your business’s needs to the providers you are considering. It also helps to involve your company’s various departments early on, which can mitigate potential issues later.

Shop around.  “Understand the line-item costs for each item fulfilled,” Iyer said. “Don’t be afraid to ask for a sample invoice breakdown and a projection of what a bill will look like.”

Iyer noted that most 3PLs (if that is what you choose) are locally owned and operated, so they can be fairly flexible with invoicing structures. Find one that really fits your needs, and ask for references with companies that are in similar industries if possible, he said.

Ask questions. As cliche as “open communication” and “asking lots of questions” may seem, it is crucial to find the right provider, because it can save you a lot of headaches further down the road.

“[Third-party shippers] should … have a lot of transparency in what they are doing, how they are doing it and why they are doing it,” Iyer told Business News Daily. “After all, it is your product and why a customer is buying from you.”

One important area to consider is how a third-party vendor might handle customer returns.

“How much do they put on the customer versus utilizing tools, i.e., printing a return label on the front end for a product or having the capability to print and email a return label?” Iyer said. “How does the third party process the return when it comes in? Can they utilize low-cost return methods? These are critical questions [to ask] in keeping costs down and ensuring a better customer experience.”

The future of logistics

To get a glimpse into the future of ecommerce logistics for retailers, one needs only to look at the industry’s biggest player: Amazon.

In 2015, Amazon spent $11.5 billion on shipping, which, at the time, amounted to 10.8 percent of its sales. Last year, the ecommerce giant created an in-house shipping company, quite possibly changing the game for everyone.

“All eyes are on Amazon given its enormous investment in logistics and desire to control the supply chain, from sourcing to transoceanic movement to warehousing to final mile delivery to the home,” Ely said. “Technology will play a big part in optimizing that effort for them.”

“Products are getting from the manufacturer/vendor to the customer faster than ever,” Iyer added. “It will be interesting to see if the creation of more shipping options then creates new products, modes of transport or other levels of innovation that we have not foreseen yet.”

Every product out on the market today started as an idea in someone’s head. From a mobile device to a software platform or a kitchen gadget, most items you can purchase came to life through the process of invention.

The road from concept to finished product can be a long one, and those who travel it often face numerous obstacles and setbacks. But armed with the right information and resources, you can put yourself on the path to bringing your invention to market. Here’s what you need to know to get started.

What you need to do

Turning your idea into a reality is a bit more complicated than just handing your design over to a manufacturer or developer and waiting for the profits to roll in. In an article on Entrepreneur.com, author Tamara Monosoff outlined some of the basic steps you’ll need to take before your product hits the shelves.

Market research. Before you spend a lot of time and money creating a product, you should know if anyone will want to buy it. Look at what’s out there and size up the competition. Do products that are similar to your idea exist, and if so, where are they sold and who’s buying them? Answering these questions will give you an idea of your target market, as well as what you’ll need to do differently to stand out from your competitors.

Patent research. Would your design infringe upon someone else’s copyright or intellectual property (IP)? Visit the U.S. Patent and Trademark Office (USPTO) website and investigate any patents on items like the one you want to invent. If you have questions or want to be sure your invention is legal for you to create and sell, consult with an attorney specializing in patents and IP law.

Develop a prototype. Once you’ve found your market and ensured that your legal path is clear, it’s time to start bringing your idea to fruition. Monosoff said a good prototype can be as basic as a drawing or diagram, or as complex as a working, professional product.

At this point, you’ll need to decide if you’re going to have your product manufactured or licensed. The former means you’ll create and sell your product yourself (this includes paying a third party to manufacture your product); the latter means you’ll sell another company the rights to make, use and sell your products, granting that right in exchange for a license fee and royalty payments. More information about the pros and cons of each method can be found in these articles on FindLaw and IP Watchdog.

The challenges of inventing

Success in the world of innovation is all about getting your timing right. If you wait too long, someone else will have capitalized on a similar idea and captured your niche already. On the other hand, if your invention is the first of its kind, the market might not be ready — and you’ll have to fight an uphill battle to carve out a place for your product.

Henry Helgeson, CEO and co-founder of Cayan, faced this issue as a mobile payments technology company in 2011, several years before mobile payments became mainstream. For other startups on the “too early” side of innovation, he advised perseverance, to get ahead of your competitors when the market does catch up.

“Peers in our industry [said mobile payments] would never happen, but we kept moving and got a three- to four-year jump on everyone,” Helgeson said. “It takes a while … it’s not something you can build up overnight. But once you have momentum going, it’s very powerful.”

If you’re on the later end, Helgeson said you’ll need to take a look at your competition and decide if it’s something you want to continue with, or if you’d be better off going in another direction with your invention.

“There [should always be] a sense of urgency, to fix what you need to, make the change and [get the product] back out to market,” he said. “As long as you do it quickly, it’s OK.”

Another big challenge for inventors is figuring out how to get their product out to the public. It may not even be something you consider at first — your idea may be great, but without a marketing plan, no one will ever know about it.

“In hindsight, we were too focused on our product, and thought it would sell itself,” Helgeson said. “You need a plan to [market it].”

Nicole Lininger, director of corporate communications at InventHelp, an inventor service company, said that many entrepreneurs who are just starting out don’t have a large advertising budget to promote their inventions. But that doesn’t have to stand in their way, she said. Lininger recommended starting off with a strong social media marketing plan, which is cost-effective and wide-reaching.

Tips for success

Ready to turn your product idea into a reality? Helgeson and Lininger offered the following advice for aspiring inventors and entrepreneurs.

Take time to research. Inventing a product requires a lot of initial investigation, patience and resilience, Lininger said. Before you begin the process, make sure you have the time to dedicate to due-diligence research. This is especially true when you’re looking at patent protection for your idea.

“Do some research into intellectual property and familiarize themselves with the process and the jargon used in the field, including patent, copyright, trademark, etc.,” Lininger said. “There are numerous reputable sites you can learn from, such as the United States Patent and Trademark Office, World Intellectual Property Organization and World Trade Organization. If patent protection is something you are interested in, contact a patent lawyer.”

Continually test your product. Helgeson reminded entrepreneurs that their products are not going to be perfect in their first iterations. You’ll have to tweak the product and make some changes along the way, and the best way to figure out those changes is by testing your invention with real consumers. Get honest feedback from test groups as a way to validate your idea, he said.

“The validation process needs to happen on a regular basis,” Helgeson told Business News Daily. “If you’re trying to do something, and the market tells you [they want] something else, you might be going down the wrong path. Be out there in the field … talking to people, being part of industry conversations. You can’t sit in a room and try to dream something up.”

Work on your elevator pitch. Even before you have a finished product to sell, you’ll need to start talking it up to your friends and professional contacts. Lininger emphasized the importance of developing a great elevator pitch — a short, concise sales pitch that includes a hook, a value statement, statistics and other data, your product’s uniqueness, and a call to action. Learn more about creating such a pitch here.

Don’t go it alone. There are a lot of steps involved in the invention process, and it can be overwhelming to try to take care of everything yourself. Lininger advised seeking out professional assistance so you can be assured that certain elements of the process will be in capable, experienced hands. For instance, you may want to turn to a service like InventHelp if you’re looking for a way to get your idea in front of companies or develop your prototype, or Rocket Lawyer if you’re looking for a qualified, on-demand patent attorney.