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Education 001: Part 1 - Don’t get crap from China

Updated: Feb 7, 2020

…get things you want from China!

How to source products for your business can ranged from straight forward to complex. I am not going to feed you a line and say that it is Soooooo easy and follow these 10 steps. If it was that easy, I suppose you would not be reading this.

Here is a quick overview of the items you will need:

- RFQ sheet template

- Drawings and specifications of the product

To have an accurate drawing/ specification sheet and RFQ sheet is going to be a great asset in being able to reach more suppliers. Once you have made that, you can send more request out without repeating the same thing over and over.

When you start receiving questions or quotations back from the people you reached out to, you are getting insight into the organizational structure of the facility.

Where they able to quote quickly but more importantly, accurately?

Did they have questions if there was confusion about the documents?

Were communications easy with them?

Making things with people many time zones away always makes things more complicated. Frequent and clear communication is the key to success.

The closer you work with a factory, the more communication and direction you will have to give. That this why it is important to be clear about your product. This does not mean you need be an expert on the construction materials of your product. Yet, you should be clear what you are being quoted on. A material switch for a cheaper price and meets the same demands might be perfectly fine for you. You should know what you’re dealing with.

For example, you might want a back pack made out of nylon and that is what is stated on the drawing and RFQ. After further investigation and talking to several suppliers, you find the polyester meets your needs. It is cheaper and has the same look and feel. There might be a case where that is not acceptable. Nylon is stronger and will last much longer. This is a conversation you can have because you know what you are looking for and so does the suppliers.

What about the case where you don’t know the material?

In the case you are not clear what the materials are or how something is put together. The first step is to find and supplier that makes something similar. Using your RFQ, reach out to a lot of suppliers and asking them how they are quoting.

-What materials are you using?

-Why are you using that?

This takes a bit investigation and gathering information from different suppliers. You are essentially getting the suppliers to teach you what you want. This gives you a sense of what costs what. Why a supplier is charging you this price over that supplier charging you that. Unless you are an expert in the product and manufacturing, you want to reach out to many suppliers and learn how they are going to do it. What you don’t know, you don’t know. Anyone can tell you what is or not possible and you will have to agree. Unless you are armed with more details and ask good questions, the fact is you will have to look stupid to learn more. Get used to it.

There are three things to really keep an eye on here:

1. Specification sheet/ Drawings – You need to give a very accurate product description to your suppliers so that you can make sure you get accurate prices to compare with other suppliers. Good data in, good data out. If you’re lax on your material standards and your material requirements, you’re not going to be able to get an accurate quote to compare from supplier to supplier.

2. The next thing we need to get is a full, accurate all-inclusive price.

-Are there mould fees to deal with?

-Are there printing fees?

-If there is a mould fee, how many pieces is that mould fee for?

-Are you going to make 10,000 pieces or 100,000 pieces?

-Are there sampling fees?

-You need to make sure you’re getting an apples to apples, all-inclusive price so that you can make cross comparisons with different suppliers price offerings.

3. The last point we need to focus on is your production lead time. I like to give my suppliers a target in-house date or a target ex-factory date if you’re handling shipping on your own. One key point for these suppliers is to make sure you’re getting target dates for milestones that you need to hit for your production and if you have a tight delivery date, make sure you’re padding those dates and giving yourself extra buffers of time. I recommend adding about 10% to every lead time that you get from a factory.

Quality Standards

What is your product?

Now that we have a bill of material (BOM), the price of the goods including any extra setup fees (Moulds, prints, so on) we have confirm that quality we want vs what they make is the same. The first step is having a clear and strong specification sheet that has the stated quality you need. The next step is making or getting a sample if it is stock. There are 3 levels of product.

-Off the shelf item

-Altered from original existing product

-Complete custom

Off the Shelf

Let’s start with the easy one first. If the product you are looking for is something is an existing and people already make that same exact product you can simply have all the suppliers send you samples. Once you received the samples, you can compare the quality to each other. Is it the material and construction that you believed it to be? Does the quality match up with the price given? This is a simple exercise of due diligence. You want to test and push the product to make sure it performs the way you want it to.

An example is a little fire engine red wagon. You found factories that make it and don't want to change anything but maybe put your name on it. You get several stock samples and you take a look at them all and decide which product is the best for the price.

Altered from original

An altered from the original product is the next level of complication. To use our little wagon as an example. You see the factory has a wagon like you need but you need to change some elements of it.

-You want it to be NAVY with a racing stripe (New paints)

-You change the wheels to be rubber with air over plastic, which requires new axles. (Sourcing of new materials

-The handle needs to be longer (Mould fee)

The facility already makes this product and changing it to your needs is something they can accomplish. In order for this to be made, we will need to pay significant sample fees and qualify that this is the correct supplier to work with. In a perfect world and unlimited resources and time, we would like to sample with our top 5 suppliers.

That will be a very costly experiment.

Buying stock product samples to inspect vs altered products that require moulds and set up fees is a different game. In this case I would pick my best 2 candidates and start sampling with them.

We should have previously sent them our Spec sheet and drawing of the product. We should have received quotes back to compare. We should have followed up to make sure our quotes are accurate to our requests.

To evaluate quality, we will have to build these and make sure they can do it well. Because there are some changes to the original design, execution might not be as good as you though it would be. This is where we start seeing new problems and questions that we have to answer. Comparing quality on these products will take longer and be more expensive over stock items.

Complete custom

Final version of this is a completely custom product. Back to our wagon, we are looking for people that make something similar to our needs. We have a wagon that is going to change everything.

-You want it to be NAVY with a racing stripe (New paint)

-You change the wheels to be rubber with air over plastic, which requires new axles. (Sourcing of new materials)

-The handle needs to be longer ( Mould fee)

-Change wagon area to a new size

-Add an electric motor.

What does this mean about quality?

Final word on quality. When we make samples, we are going see what we are actually dealing with. Quality gets more complicated the more custom it becomes. That is not to say it cannot happen. There will be more levels and more manufacturing questions to deal with the further we get away from a standard product.

We also want to be aware of what market the factory is serving.

Some factories primarily serve their domestic market. That means the product and quality level won’t be as high as a factory that mainly ships to Europe or United states. You want to make sure that the facility is clear about your quality standards. Yet, it is YOUR responsibility to know the quality requirements for the product you are importing. Since you will be the importer of record, if something is wrong it will be you who is responsible and not the supplier.

I am not trying to scare you off. I am just trying to drill it in to your head that you need to know what is going on at first to make sure you ‘re getting the best product.

Too be continued…

Have questions? Contact me a Jamonmichaelyerger((at))

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