Top 10 Tips for Sourcing from Overseas
With established strengths in trade sourcing, importing and logistics for the UK and Irish promotional market, Chilli Source serves a number of leading promotional distributors, helping them to avoid the pitfalls, risks and general hassle of importing promotional products from overseas.
Heading a team with over 40 years experience in sourcing, Miles Lovegrove, Director of Chilli Source, gives us his Top 10 Tips on Sourcing from Overseas:
Sourcing from overseas can be a risky business,
so how can you be sure you will end up with the goods you are expecting?
Physically placing an order is actually the easy part – to pave the road to
success follow these top tips and guiding principles to avoid the pitfalls and
hiccups of global sourcing:
1. BE CLEAR ON THE BRIEF – establish early on exactly what it is you need to source. Sounds obvious, but sometimes the critical bits of information are omitted at the front end of a project. e.g. if sourcing a lanyard, check which type of clip or accessories it may need; does it need to hold information in a wallet for example? Critically, if it could fall into the hands of children then it must have a safety breakaway clip to avoid strangulation. These added elements can change the cost and timings of manufacture and therefore need to be established at the enquiry stage with the factory.
2. PLAN IN ADVANCE – always leave enough time for manufacturing overseas as unexpected delays can occur – port schedule changes, customs checks, volcanic ash... as we have seen, anything can happen so prepare for the worst! Don't squeeze factories unnecessarily on time and cost as this may lead to unplanned and unregulated outsourcing / home working. As a rule of thumb allow 2-3 months for production with sea freight, or if time is really not on your side, 4-5 weeks for production with air freight. Always allow time for pre-production sampling if possible!
3. CHOOSE THE RIGHT FACTORY – use specialists for the product or material type, be wary of very cheap prices, check to see if a social standard such as SA8000 has been achieved, if not ask to see any previous audits undertaken by an independent audit company. Ask to see photos of the factory floor, health and safety policy, quality and control procedures, etc.
4. ESTABLISH LONG TERM RELATIONSHIPS – and respect national traditions, for instance the Guangxi (translated as ‘relationship’) at the heart of Chinese business culture. Just like in the UK, you rely on your suppliers as much as your clients for business success, and operating without loyalty or ruthlessly searching for the best price is not necessarily a long term strategy for successful sourcing. Respecting local customs and culture – rewarding a job well done can be as advantageous as volumous buying power.
5. KNOW THE LOCAL COUNTRY LEGISLATION FOR PRODUCT SAFETY & COMPLIANCE – don't assume that the factory will know what regulations their products need to comply to; they often export to many countries around the globe and will not necessarily stay abreast of constant changes to UK or EU standards. Use a reputable sourcing agency or import company which knows the legislation and best practice guidance and can support the claim of compliance with up-to-date-documentation.
6. PRICING – ensure all costs are quoted accurately and don't forget it's not only the product that needs considering. Check that the factory has included export costs (including the export licence), delivery to the FOB warehouse, freight estimates should be calculated on as accurate information as possible (double check that export packing details make sense) import duties and whether a licence is required, onward delivery, requirements for palletisation or container delivery. Check any hidden or variable fees such as set up costs, moulding, dyeing, pre-production sampling, etc. Unlike the UK where you pay for goods on delivery, remember that Chinese factories don't ordinarily offer credit, especially if it is the first time you have worked with them. Watch out for currency fluctuations, especially on long-term projects.
7. PLACING THE ORDER – this is where detail and accuracy are critical. Be mindful of language differences and don't expect emails written in 'good English' to be easily understood by someone who has learned English as a second language. Find an appropriate method of communication with the factory such as skype or msn for ongoing questions and checks during the various stages of production.
8. QUALITY & CONTROL – once the order is underway, use a reputable inspection company to undertake a pre-production / during production / pre-shipment inspection to check the goods on the production floor comply to the approved sample. Take up any issues found in the inspection report and work with the factory to take corrective action. Re-inspect to double check any issues have been put right.
9. FREIGHT – so the goods are complete and manufactured to specification and ready for despatch to you from the country of origin. You can't sit on a container from origin to delivery point to make sure your goods don't go AWOL – therefore use a reputable freight forwarder who is set up with a substantial infrastructure to manage your shipments to the UK – it's often a balance between the fastest route vs the most economical route, so check what your priorities are and inform your freight forwarder what the critical factor is for your shipments. Build in additional 'buffer' days in the shipping schedule for unexpected or unannounced customs checks. Make sure you have adequate insurance for goods in transit.
10. ONWARD DELIVERY – establish at the outset what the delivery destination requirements are – check the goods inwards instructions, size of pallets (UK or EU, 4 way, etc.), can pallets or containers be received and handled at the destination? Are there any specific carton markings that need to also be stated on delivery notes?
Of course we can't possibly sum up the whole global sourcing process in just 10 points, but we hope that following the above can help. However if you are thinking of sourcing direct from factory for the first time or are inexperienced in this field, it may be worth you considering a reputable supplier to help you through the process – there is no substitute for experience!
Chilli Source Limited