6 Common Sourcing Mistakes That Will Cause You to Lose Money
Sourcing from overseas can be a great idea if you are looking to bring in more profit, but only if you know what you’re doing. Sadly, it can also be an expensive mistake if you don’t plan correctly and put the proper safeguards in place. This guide covers some of the most common global sourcing mistakes businesses make and how to avoid them so that your products or services are high quality and competitively priced, and you’re not losing money on each sale.
1) Poor Preparation
It’s a common misconception that sourcing from China is just like any other business transaction. Businesses often think their orders will be filled correctly and arrive on time because it’s China. Although it may be cheap to source from China, you will pay for your mistakes. Poor communication, poor preparation, and improper documentation are some of the most common issues businesses encounter while trying to sell products in China or working with Chinese suppliers.
2) Lack of Patience
A lack of patience can cause businesses to go through a number of China sourcing agents and business partners only to wind up in trouble. Unfortunately, some suppliers won’t get it right on their first try. And while they may be capable of delivering high-quality products or services, they may take more time than you would like before doing so. If your goal is to find an effective partner with whom you can work efficiently and productively, don’t let impatience lead you down a fruitless path!
3) Not Knowing What to Look For
Unfortunately, not knowing what to look for is a common mistake. It can lead to sourcing missteps that may result in costs and delays. For example, many companies will send samples of goods they want to purchase before they make a purchase. This can be an expensive process, and one that isn’t always worth it. Sending samples of goods without first knowing what you want can be costly and inefficient as well—how do you know whether you’re ordering 500 units or 50,000 units? Before asking your supplier to start making goods for you, make sure you know exactly what specifications are important (and why) and how much volume is required by looking over their past work; focus on clarity here rather than speed.
4) Gullible Buyers
Because you need to be on guard against bad suppliers, and because even good suppliers can be unreliable from time to time, it’s important to take a more proactive approach. One of our best pieces of advice for buyers is to stay organized. There are plenty of things you can do to help ensure smooth operations and protect yourself from any issues that might arise. For example, it’s wise for all buyers to do their homework: Know what your supplier does well (and how) and know how others feel about them. Are there a lot of unhappy customers out there? Are they generally reliable or known for late shipments? If so, then maybe it’s best not to rely on that supplier at all or at least not without some kind of backup plan in place.
5) Buying Without Checking The Quality First
When you’re buying from China, do not just buy because of the price. You must check quality first. There are hundreds of factories to choose from in China, but not all can manufacture high-quality products as you expect. It is good to note that Chinese factories always use substandard materials in manufacturing your product so they can offer them at a cheaper price. The materials are low quality and that affects the performance of your product duct. Do not be mistaken for its great reputation, it may not be as good as many people have been saying about it.
6) Expecting Things to be Perfect
Most people are under the assumption that there’s a right and wrong way to do things when it comes to outsourcing—and if you hire an offshoring company and choose your suppliers correctly, you’ll be golden. But that’s simply not true; you never really know what kind of quality or service you’re going to get until you’ve gone through your first cycle of product development. It can be stressful, but it’s part of owning a business; it’s important to roll with these punches and expect things not to go perfectly (but hope they do). This will allow for time in development for missteps, budget overruns, etc. The worst thing you can do is put so much pressure on yourself and your team because everything must be perfect from day one.
Global sourcing has become incredibly popular in recent years as companies try to gain market share and control over costs. However, with so many businesses jumping on board, it’s becoming more difficult than ever to find a good agent. Because of that, we’ve put together a list of 6 common mistakes people make when hiring global sourcing companies and what you can do about them before it’s too late. Our hope is that you never fall victim to these problems – after all, by giving your business to someone who will do things correctly from day one, you can keep hundreds or even thousands of dollars in your pocket every year.