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. 

Are you looking for an overseas factory to manufacture your products? Rather than searching for a factory yourself – a task akin …

Are you looking for an overseas factory to manufacture your products? Rather than searching for a factory yourself – a task akin to the proverbial needle in a haystack, especially from afar — look for a good sourcing agent or sourcing company to do that work for you. A good sourcing agent, either in the U.S. or in country, can:
1. Locate factories that have equipment and talent that matches your needs.
2. Determine which factories or suppliers will meet deadlines and provide efficient service.
3. Negotiate good prices.
4. Place orders, handle currency issues and pay suppliers.
5. Inspect factories for quality and ethical practices.
6. In some cases, inspect your finished goods before they’re shipped to you.
Here’s what you need to know about choosing a sourcing agent:

Visit trade shows

A good sourcing agent will have a deep understanding of your industry and of the country in which you want to do business. As a result, your industry’s trade shows may be the best places at which to locate a sourcing agent. Like the quality of products made by a colleague in the same industry? Ask him or her for sourcing agent recommendations. 

Decision time: a U.S.-based, global, or in-country sourcing agent?

There are advantages and disadvantages to both domestic and in-country agents. A domestic sourcing agent may be larger and broader in scope – for instance, if you want to manufacture products in several countries, a domestic sourcing company with access to, say, factories in China and Vietnam may provide you with a single point of contact. On the other hand, local representatives can help small companies get started for relatively affordable prices; they’re often paid on commission, as opposed to larger domestic companies, which typically work on contract and expect a portion of the fee up front. In either case, ensure that representatives are fully bilingual. 
Globus & NTDB.

Get the best prices

A good sourcing agent should get bids from several different factories for you. In addition, make sure that the agent doesn’t have financial ties to any particular factories. Also be aware that in some countries, sourcing agents receive commissions or kickbacks from the factories they choose; this practice can compromise their objectivity, to say the least. 

Maintain ethical practices

These days, it’s important to ensure that overseas factories aren’t employing underage workers or treating their employees poorly. You’ll need to inspect factories before you sign a contract, but you can also do business with sourcing agents who make a point of doing business responsibly. 

• Have a sourcing agent sign a non-disclosure agreement before you give him or her information about your new product.
• Once he or she has signed an NDA, give the agent as much information as possible, including specifications, measurements, and drawings, about the product you want produced.
• Once you’ve chosen a factory, start with a small product run and inspect it before it leaves the factory.
• Once you’ve chosen a factory, start with a small product run and inspect it before it leaves the factory.