Do you feel sourcing is too complicated? Are you scared to lose your money to the suppliers? In this episode, I am going to show you 3 WAYS to source your product FAST. I will point out the mistakes most people make – so you can avoid them! Enjoy!
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Full Transcript:
Welcome to the GoodLife Warrior podcast. I’m Yuping. We make sourcing easy, fun, and profitable for your business. This episode was originally aired as a video on my YouTube channel, youtube.com/goodlifewarrior. As always, high-quality, professional sourcing content delivered to you with passion and my unique Chinese accent. Enjoy.
Hello, sourcing warrior. How’s your day? To many people, sourcing is a complex, mysterious process. If you have no sourcing experience, naturally you’ll feel very scared. If you have a lot of money, you’re even more scared because you are afraid to lose your money. Don’t worry, in this video, I’m going to give you lots of lots of tips to show you three ways to source a product successfully.
One of the ways is to use a sourcing company. And yes, I will recommend a good sourcing company to help you out. I’m so excited to share a lot of my experience in this video with you. Let’s get started.
This is a great step by step tutorial to help you successfully source products for your business. Whether this is your first product or it’s your second product, you can count on me to give you a lot of information in this video. I will show you three pathways to source a product. I’ll explain the different parties that you have to deal with. And of course, I will give you many, many sourcing tips to help you succeed. All sourcing takes six steps. This is our new buyer Joey. If Joey chooses to do sourcing by himself, option number one, do it yourself, then Joey will take all six steps. The reason we’re looking at the peak on top here is that the initial climb is more difficult. After step number three, sourcing gets easier.
The first step is supplier discovery. Find out which supplier you can source products from. And then you do your due diligence to see if this supplier is good enough for your money. Then the third step is the contract stage, where you are actually an engaging business for real, sending money to the supplier. After that, you will go through the quality control and inspection process. If everything looks good, then you can arrange to ship. That is the logistic. Most people miss-step number six. After-sale warranty, sourcing is not complete without a warranty. What if you have a batch of a defective product, right? So let’s look at each step in greater detail. And let me give you some tips to help you understand each step.
The first step, supplier discovery. If I ask Joey, “Hey Joe, you, where do you find your suppliers?”, the first thing, comes to mind, alibaba.com. Of course, most people find their suppliers on alibaba.com. Are there other platforms? Global Sources, Made in China or Canton Fair or even Google. When you use these third party platforms, let me give you a few tips, pay attention to the number of suppliers selling on the platform. The more sellers on the platform, of course, the higher chance you have to discover your supplier. Pay attention to the specialty. For example, madeinchina.com features more suppliers are selling on heavy machinery. And also pay attention to the protection function each platform offers to the buyer.
In my opinion, supplier discovery skill is the gold mining skill. You need to master this skill. It doesn’t really matter whether you use alibaba.com or Global Sources or Made in China. You need to know how to discover the best supplier. In this free video, Alibaba Servicing Hack, I teach you four steps to discover the best suppliers. After you have discovered five to 10 good suppliers, then you will be spending most of your time doing the due diligence.
During the due diligence stage, the number one mistake most people make is to choose a supplier based on price. Here is the thing. Price is a dynamic piece of information. Dynamic because when the raw material changes, when the currency and exchange rate changes, the supplier is going to change your price. No matter which supplier you choose, you are going to spend thousands or tens of thousands of dollars with this company, so you need to look at this company way beyond price. Look at their quality capability. Can they hold consistent quality? Look at their people’s communication skills. Are you going to get support from your sales rep? And most importantly, if you do have a very sensitive design for your customized product, can this supplier be trusted? Do they have honor?
If you don’t know how to ask deeper questions to find out if this supplier is a good supplier, many people do have trouble with this. What questions should I ask? Then you can use the safe supplier guide. In the safe supplier guide, there are a lot of scripts, there are a lot of tips, and a lot of information to help you do the due diligence to protect your money. After the due diligence, Joey has the option to enter into a contract by writing a purchase order. The reason I say Joey has the option to enter into a contract because Joey has the option to walk away. Why walk away? Because sometimes a no-deal is better than a bad deal. Up to this point, Joey has spent literally nothing, maybe $100 dollars, $150 on the samples, but this piece of paper, this purchase order is going to cost Joey thousands of dollars.
And there’s more. Joey will have to spend money on shipping, on PBC to list and sell his product. If this is Joey’s first product, first purchase order, I highly recommend Joey to do another round of product validation. From the time Joey identified the product to the time of this purchase order, it could have been a few months. So it’s worthwhile to do another round of checks or hire a PR professional company to do the product validation.
By the way, guys, ZonBase is a database company. They not only have the product research software, they also do a product launch. They call this service a page one launch service. You can use their product validator to see what they say about this product. Since they launch so many products every day, they can tell you if your product is going to make it to page one. If you want to use the ZonBase product validator to check your product, make sure you grab the special discount code in the video description. It’s going to save you a lot of money.
Now, if you’re ready to write your purchase order, let me give you a couple of very important to sourcing tips. Number one is product specification. No purchase order is complete unless you have a clear product specification. This includes the trade assurance transaction that you go through alibaba.com. Many people lose their dispute for their trade assured transaction because their product specification is not clear.
The second tip is the payment term. Many suppliers asks you for a down payment. But when you should pay for the remaining payment, let’s say 70%, when the supplier tells you, “Hey, Joey, your shipment is ready. You need to pay us.” No, you will never pay the remaining balance until this shipment is inspected and is passed. I must say, anyone who chooses sourcing option number one, do it yourself, is on a hero’s journey. You will learn so much. So far, Joey has done supplier discovery, due diligence, and contract. So we’re going to move forward with quality inspection logistics and after, say, a warranty.
Ready to do the product inspection? Let me give you three very good tips. Number one, start documenting early. In the mastermind course, I teach the students quality control from A to Z. A starts from the time you receive the first sample. The first sample is a key indicator of the supplier quality. The supplier’s process and quality control are not going to change much, even if you are very picky. So you better start documenting quality issues from the first sample and with each revision.
Number two, it’s understood criticality, meaning you shouldn’t depend too much on the third-party inspection company to tell you what’s major, what’s minor defects. You will know your product the best. You should tell them what’s major, what’s minor, what’s acceptable, what’s critical. Number three is inspection company rotation. This helps prevent any potential unethical issues that take place between the same inspection company, with the same supplier, but also different inspection company could help you uncover some of the hidden issues that the previous inspection company maybe they didn’t discover.
After your product passes the inspection, it’s time to arrange to ship. The shipping step is a very important step is not because shipping is complicated. It’s because there is too much money in shipping. A lot of people spend more money on shipping than buying products, so I’m going to give you three tips. Tip number one is you need to get three quotes to compare. Ideally, have the three quotes breakdown so you can see where is the difference? Tip number two is to try not to fall into a DDP trap with a new supplier or a new freight forwarder. I’m not saying everyone will do that, but sometimes they quote you DDP, but they cannot pay the destination customs clearance and duty because they are not the importer of record.
Tip number three is to be aware of HTS code tricks. Some of the freight forwarders give buyers very low shipping cost quote. What they did is to change the HTS code, which in turn changed the percentage on tax duty or tariff. You do know that this is an unethical practice. If customs and border control catch this shipment, it is you, the importer of record ultimately will have to pay for the fine and you will be on the blacklist. Like I said at the beginning of the video, sourcing is not complete without an after-sale warranty because every business has to deal with warranty issues after taking the products from the supplier, right? So I’m going to give you three tips.
Number one, if this is your first purchase with the new supplier, and you’re not sure if this product is going to be successful, you’re not sure you’re going to buy the same product from the same supplier again, then you are better off asking for warranty discount upfront on your PO. If this is a repeated product, repeated purchase from the same supplier, then you need to have a credit arrangement on your purchase order and have an arrangement for the warranty period. Maybe it’s one year, maybe it’s three years, and then spelled out how the credit is going to be applied to your future purchase.
Number three is to close the quality control loop. If you discovered a defect after you take the shipment that is not in the inspection report, then this defect needs to be recorded on the inspection checklist for your next inspection. This becomes critical for your next inspection. That’s how you close the quality control loop. Guess what? This hero’s journey, do it yourself sourcing is complete after Joey’s touchdown on step number six. We’re going to move forward with the past with the number two source of the product with the sourcing company.
For anyone who wants to use its sourcing company, first, you must accept this fact. You do not own the relationship with the supplier directly. This contract is between the sourcing company and the company they choose. Whoever they choose is really none of your business. Your relationship is with the sourcing company because the money is going there. You don’t have much visibility to what they do and how they do a behind the scene. So if this is the fact and you accepted, what is the primary reason for you to use the sourcing company?
For most people who have used the sourcing companies successfully, the primary reason for these people is to save time. Let’s say if Joey has a large budget, it will be a strategic Joey to relieve himself from doing day to day sourcing. Instead, he can hire a sourcing company to help him scale up the business. If you are at the beginning of your journey, no budget, no experience, I would recommend you go through the hero’s journey, like what Joey did. In the end, at least you leave yourself with some good experience.
For Joey, he thinks he has built his business adding products to his business, is time for him to choose a sourcing company. The question is who he can trust. The reality is there is hundreds and thousands of sourcing companies. It’s really hard to find a good one. Especially if Joey is going to spend a lot of money with this company, Joey needs to find a good company. So I’m going to recommend a sourcing company that I personally trust a great deal. The link is in the video description. Whether you use the company I recommend or not, consider these factors, when you hire us racing company.
The first one is the longevity of this sourcing company, how long they have been in business. Since you don’t own the relationship with the supplier they choose, you better make sure that the sourcing company is stable, that they are not going to disappear on you in a few months. The second one is the operation capabilities, such as the warehouse space to actually perform quality inspection or consolidate shipments to help you arrange to ship and save some money. If the sourcing company can show you their warehouse space, it’s a good sign. The third one is transparency, specifically, how does the sourcing company handle the supplier source. Are they going to share with you since you have no visibility to your supply chain? The reason you are asking these questions is that you really want this sourcing company to be honest, transparent, and capable.
Now, let’s move forward to sourcing option number three, sourcing through a sourcing agent. A sourcing agent is different from a sourcing company. A company may have offices, employees, and warehouses. A sourcing agent is just an individual, a freelancer who provides sourcing surveys, who will use a sourcing agent. Well, it doesn’t matter whether Joey has a small budget or a big budget, Joey can always consider using a sourcing agent to perform certain sourcing steps. For example, Joey can hire a sourcing agent to help him find suppliers or even do the due diligence for him to verify the supplier.
Now, what relationship is between Joey and the sourcing agent? It depends on how Joey paid for this sourcing agent. If it’s fixed fee-based, then the relationship is a contractor relationship. After the sourcing agent gave Joey the supplier information, Joey will take over and enter into the contract with the supplier directly and own that relationship. Personally, I don’t recommend anyone to hire a sourcing agent on a commission basis and pay a single individual. If you are to consider doing that, you’re better off using a sourcing company. So if you are thinking to hire a sourcing agent as your contractor, let me give you a couple of tips.
The first tip is to try not to leave a platform. What do I mean? A sourcing agent is a freelancer. They work on a project basis. They are an independent contractor. Because of this, they come and they go. When the contract ends, they no longer work as a sourcing agent. For this reason, it’s important that you stick to a platform, whether you use Fiverr or you use Upwork, use the platform, and stay on the platform. Try not to enter into any transactional relationship with the sourcing agent on a personal level. The second tip is always to try to use a small test project to test the sourcing agent capability. If this agent is very good, then you can consider adding more duties to his jobs, such as doing the due diligence or the inspection for you.
There you have it, my friend. To successfully source your products, you can do it yourself, you can do it through a sourcing company or with a sourcing agent. I must say, with these three sourcing options, whether you choose to walk this journey by yourself, or you choose to use a sourcing company or a sourcing agent to help you, this is your hero’s journey. The success belongs to you and you only.
I truly hope you enjoyed this video. It’s an honor for me to share my experience with you. If you want to learn more, join my mastermind course. I coach each one of the students in the elite Facebook group. You will love it. The sourcing company that I recommend to you is in the video description. Feel free to check them out. As I said, this is your journey. Make it happen. You deserve to be successful. Good luck. And I’ll see you in the next video.
Check out the link, the Sourcing Warrior Mastermind link, undertake Sourcing Warrior’s quiz to find out your sourcing IQ. Make it fun, learn something, have a great day. I’ll see you in the next episode.
