Education 002: Part 2 - Don’t get crap from China
Updated: Feb 7, 2020
Get something you want!
To find suppliers
We determined what our product is and its materials, now where is the best place for it to be made. We have 3 ways we can find supplier. The first is an online database. Alibaba, Aliexpress, Global Sources are the major players in this area. Most are geared to China sourcing, but have other countries as well. The second is searching something called a “reverse shipping manifest” These are public documents about what products and who is shipping it to who. Panjiva or (forget other name) are online website that have this information and it a paid service. The final way it to search on the internet directly for OEM suppliers.
“You might have had 20 windows open to search and you have it now whittled down to 5-10 strong facilities you are going to contact.”
Alibaba, Aliexpress and Global sources are the 3 are most commonly used. They are the “Yellow pages” of the internet for manufacturing (For those who don’t know what this is, in USA we would receive book for free once year that had business alphabetically named by service. Example “PLUMBER” – A.A Milne’s Pooh and toilet service, A.B.C toilet clear and free inc, Boss Plumbing corp and so on) You can go to the site and search what you are looking for. You can organize it by country, product and suppliers. Ailbaba and Global sources are geared toward to finding facilities that are doing larger quantities and can make custom/ semi-custom items.
Aliexpress is geared toward more of buying something that already exists. An Amazon of China if you will. Alibaba/ Global-sources can be tricky the verification of “good suppliers” is dubious. Gold badges and verified supplier badges need to go through a process an audit and gathering information to verify about a company but it does not measure whether they are a good supplier. Also being the first result for your search is not an indication of a good supplier either. They just happen to pay more to keep them at the top.
So how do we find a good supplier here then?
We need to first organize how we search for things. Alibaba as an example - search Red wagon.
You will now see a bunch of results for a Red wagon. At the search bar, you can change how it is searching. At the moment it is selected to “ Product” That means it is finding everyone that advertised they have a red wagon. Which can be useful but not now. Change that bar to “supplier” From the results should be different. It is now the people that claim to be suppliers of said “ Red wagon” This narrows your search with less noise. Red wagons come in all shapes and sizes. There are metals ones, fabric, wood. The wheel can be different and some have seats. Determine what you are looking for. I like to open up as many as 10 different companies that look similar to my needs. After I have done this, I then immediately look at their company, not the product. I looking at the company and what products they make. This is your first step in weeding out possible bad suppliers. Have a look at what their products are. Are they all wagons or things with wheels? Does it look coherent and the products match OR are they making tires,cell phone cases, wagons and sun-glasses? You will see this. This is mostly likely what we call a trading company. Not all trading companies are bad, later on that… But this is clearly not the facility that is focusing on your product. The quality might not be as good and the price will be a little more expensive than going “direct”. Once I see that, close out the window. I have plenty of others to look at. I am looking for places that directly make the product.
Let’s be clear, I am not looking for – The wheel producer, the metal producer, the handle producer and painter to make my wagon. That is not what we are doing. We are looking for people that already make this product or something similar. They have familiarity with the product and materials. They have the proper equipment to complete the product.
You might have had 20 windows open to search and you have it now whittled down to 5-10 strong facilities you are going to contact. This is where your BOM/ Spec sheet will help you move on to the next step of getting quotes. Before we do… we have 2 other ways to find things.
Reverse trace websites like Panjiva, ( other company) is a way to possibly find suppliers. How these websites work is you pay a monthly fee to have access to organized shipping records. You can search your competitor and see who is the shipper of the good they received. You can search by Product, Buyer, Shipping, Supplier. If my competitor is “ Radio flyer” and they are… I can search them under Buyer. If they are the receiving company of the goods made, it will show all the products they had shipped to them in the last 5-6 years. ( correct #?) In addition, you can see what factory sent it to them. This is a great way to find factories that make the same quality level or same product as your competition. This is a great tool and can really help find qualified suppliers but something to think about.
While you are looking for suppliers that make things for Nike or Bed bath and beyond. Are your product quantities and order frequency enough? While you might be able to find the best facilities in the world, you might not be able to place an order with them. They might have MOQ that is way above what your needs are. We are not always looking for the best facilities in the world. We are looking for the best facilities that fit YOUR needs. That can mean a lot of different things to different people.
The last way it to look for OEM manufacturing. When I was looking to get organic soaps made, the first thing I did not think of was Asia. I thought USA, Australia, Europe and England. I searched for OEM soap manufactures and came across a lot of different sites and data bases. You still need to look at all these sites and gather the information. You still need to figure out who works best for you. This is probably the most difficult way to find facilities to produce your product. It is not a specialized search engine that just spits out people who make your product. It is still a lot better than the yellow pages. In all fairness, this is still an incredible way to find resources.
What each way lacks is none of these are an 100 percent solution. I used these three methods together. To give an example, I might be looking for “ Bluetooth clock radios” I might go to Panjiva and look up that phrase under the search of “ product” and look who is importing these. I then would think… who imports these products and would be quality? I would search Panjiva under “ Buyer” and type in Target or Starwood (Hotel Chain) and limited the search to term blue tooth. I might be able to find supplier information to find an email and website to look at the product they product. Now that I have some of those names of suppliers, I might run over to Alibaba and see if they are listed on there. Here I could gather extra contact information or and see the products they are listing. Can you see if they make all the same related items? We are confirming that this is their main product or are we dealing with a trading company that works with many facilities. From there I will search if they have a website. Again, I am looking for consistency. Are the products the same here as what was on Panjiva and Alibaba? I am also gathering additional contact information that might be different from the previous place.
Why all this double confirming?
It really is our responsibility to verify the suppliers capabilities and validity that it is really producing these items. We cant simply trust one source. As for gathering more contact information, I do this to make sure my information is going to the right person. Sales people change all the time and the contact information might be no longer be in use or with an email they check very often. Sometimes I will find five different emails across these three formats. When I send out my quote request (RFQ) I will send to all 5 address to assure that my messages is getting seen.
This may seem like a lot of work. The truth is, you are not operating the same level of business acumen or business standards of your home country. You can not assume that the first 5 people you see on Alibaba are the real deal. I really want to start wide in my search for suppliers and cut out the suppliers that dont fit the requirements as we go. In the end, it give use more choices to work with in the beginning and learn more about the suppliers and their products. In the process we are picking up a lot of details about product specifications and what is possible with this product. You might have an idea of what you are looking for but through this search you will find out what is possible. That might lead to materials and features you never thought of.
What about if something I want has not been made?
I get this question a lot. We are using the same process above but we are looking for suppliers that have the capability to produce your product. This is a process that takes longer and will cost more money to do. It will most likely take multiple rounds to get right. You will need to make sure that is budgeted before you start making things. There are different levels of customization. Maybe you are creating a smart shower head. Shower heads exsist and so do smart electronic things but there is not one supplier who makes the smart showerhead reader. Since this is your own creation, you need to have a lot more detail about how it works and who it should be put together. The first steps might be looking for suppliers who makes the construction of the product. Is it metal or plastic? What type of metal or plastic construction will lead us to different suppliers. The smart aspect of the product is the electronics. Depending on how technical you are and what you can provide for BOM and specifications will determine how much you will need to rely on a supplier to solve the actual construction and putting this product together. Let say you don’t have an engineering background. We need to find suppliers that would have some type of capability in reading measurements of temp, duration of water use and can be waterproof with blue-tooth capabilities to work with your NEST home unit.
If you don’t have the technical capabilities it would be good for your to hire some help as a 3rd party and don’t just rely on the factory to figure it out for you or figure it out well. This is a pretty technical product.
Some products have never been made before do not require this much work. It might be as simple as opening a mould and using the material needed to product the product.
Request for Quotation
To make sure we get accurate pricing from the suppliers , you are going want to make a Request for Quotation sheet (RFQ). This helps us make accurate cross comparisons when we have multiple suppliers.
A good Request For Quotation ( RFQ) sheet is going to list out all of your product specifications. We want to be as accurate as possible and make sure we list has many details as possible. When we send this to a variety of suppliers, you will need to make sure again the pricing they gave you reflects what you asked for. We want to make sure that we can get an apples and apples comparison in order to chose the top 3 suppliers you want to concentrate on. The goal is to have a main supplier and a backup incase something happens. We want to make sure the price they are offering is included set up charges or mould fees or at least called out and you can amortize it yourself. In addition to your RFQ and spec sheet/ drawing you send to them, you may want to send them a physical sample of something that is close to the quality you want. This will be the best way to better and faster quotations.
Three basic components we need to consider when we receive quotes is Price , Quality and Speed of production. They all work together. The cheapest price, the best quality and can get it tomorrow? That is what we call a unicorn, it does not exist. Each one of these work with each other in a quote. Sometimes we are going to see variance in our prices, even though we sent the same requirements. This is where a templated RQF can really help. You can go back and talk to the suppliers and double confirm they understood all the points. In fact this is about 50% of the work of getting accurate quotes. You think you should just get it back right the firs time, but it is not the case for more complicated product and materials.
What are you waiting for? Get to it and start contacting people.
Have questions? Contact me a Jamonmichaelyerger((at))gmail.com