Product Sourcing Definition
The definition of sourcing is very simply, “Finding products to sell for your business.”
Sourcing products around the globe is obviously a very important factor in supply chain management and thankfully a much easier task than in years gone by. Jumping on to Google, makes the sourcing process much easier and quicker and is certainly the first port of call for global sourcing but there are still other avenues that shouldn’t be ignored when learning how to setup your import export business.
YouTube Live Global Sourcing
International purchasing and global sourcing of products of obviously the starting point of any import export business. In the recorded YouTube Live session below we discuss the difference between buying locally and international purchasing and identify the skill sets needed to be a successful buyer on the global stage.
As an example, we once helped an importer and retailer of pine furniture who had signed up to our online course as he wanted to learn other methods of sourcing and procurement and increase his options of suppliers and not be limited to his sole supplier in China.
This entrepreneur had seven furniture retail outlets throughout the UK and his business was growing. He felt he was vulnerable having just one supplier and for security needed to look at other options potentially in other parts of the world, building a more strategic sourcing plan. At the same time, he wanted to gain a competitive edge being that all his competitors were purchasing selling the same furniture designs as him, so all he could compete on was price which was squeezing profit margins.
After some consideration and research with his customer base and examination of his inventory compared to his competition, the data showed him that he needed to develop bespoke designed furniture, which he felt would give the needed edge and these designs would be marketed as exclusively his. After listening to his customers and establishing what products and services they wanted, he catered for their needs and desires and went about drawing up a range of furniture.
He approached his Chinese supplier and manufacturer and inquired about producing this range of bespoke pine furniture but they were unable to accommodate this request because of the large cost involved to them in retooling their machinery for a comparatively small order.
Supply Chain Sourcing
With this, we advised on product sourcing alternative manufactures and to look closer to home. On doing some initial research, we suggested Cyprus as a first point to finding new sources as we found it to be a pine furniture manufacturing base and pine wood was in abundance, lowering the price of the raw material.
The next step was of course to find a supplier and manufacturer there, one of the types of sourcing we decided to tap into was contacting the Cypriot embassy in London and ask them if they would be able to recommend any reputable and established companies. They were very helpful and of course, pleased with their sourcing involvement as they’re happy to promote the Cypriot manufacturing industry, in this case, furniture makers and we were pleased to receive credible recommendations.
The Embassy asked if we would like to be introduced to a local sourcing company but actually made several introductions to manufacturers that were fit for purpose and eager to win the contract. Our entrepreneur discussed his needs for his bespoke pine furniture to be manufactured and exported to the UK which were well received and two reputable and established companies submitted quotations, both within the same ball park figure.
Both companies invited our entrepreneur to visit and have a tour of their factories, see firsthand the quality and craftsmanship of the furniture and discuss his final requirements.
After reviewing both proposals, further negotiations and being impressed with the manufacturing process of both companies, the order was actually split between the two companies giving our entrepreneur further security in having two reliable manufacturers but also being able to gain an air of competitiveness between them, ensuring that price would remain competitive.
The Chinese supplier was kept and continued to ship furniture and was offered to customers as a lower priced range, keeping this target market but putting our entrepreneur in a position to up-sell the bespoke range when possible.
All Your Eggs
The saying goes, “don’t keep all your eggs in one basket” and in this case it was great advice to follow. The result was an increase in customers, sales and profits due to people being unable to buy this range of furniture anywhere else and the retail business has gone from strength to strength.
The Internet is without doubt the easiest and fastest way to find suppliers and manufacturers but there are alternatives. In this case, it was beneficial to make contact with people that we were able to trust in the Embassy and use their knowledge and credibility to find these reputable manufacturers.
Chambers Of Commerce
Another option is to contact the Chamber of Commerce in the country or area that you’re looking to source products from. Like the embassies, the Chamber of Commerce also wants to promote their businesses and attract foreign trade, so making a contact within the Chamber can be a good move.
Contact and let them know what you’re trying to achieve and ask if they will send you a list of their registered businesses in the sector your looking at. They will only be too happy to help.
Another great way to source products is to go to trade fairs. Trade fairs happen all over the world and simply Googling trade fairs in your country/city will like bring up results that you won’t have to travel too far.
Check these out and subscribe to ones that are of interest to you so you’ll know when there are more upcoming. They’re usually free to attend and you’ll have a chance to check out some great products and in some interesting niche’s.
Facebook is a great tool to find suppliers offering their products. There’s hundreds of groups out there with particular niches that you can search and join. Get chatting to suppliers as well as other importers and exporters.
ABTS® has a group recently setup which all are welcome to join.
Keep Thinking Outside the Box
When starting of growing your business, it’s worth keeping your options open and checking all avenues as well as continuing to ask yourself, how can I keep my edge?
Travel The Globe
So if you’re ready to start looking for products around the world, the best and most fun way to do it is to start travelling! We’ve done this ourselves so have a few tips for you as far as how to make your way around.
AirBNB is a global leader in accommodation and we’ve all heard of it. Very easy to use and you can find some great deals as you’re renting from individuals much of the time, not hotels. We’ve used Airbnb many times without any problems so sign up here.
Agoda appears to have cornered the market in South East Asia and offers the cheapest rooms between all the various booking and compare sites. If you’re heading to Asia, it’s certainly worth signing up and installing their app on your phone and signing up for an account. It could save you some good money.
If you’re planning on sourcing in Europe or the America’s, it’s worth comparing prices with Booking.com. These guys seem to have very reasonable rates so again, install and open an account and keep the app handy.
Ride sharing apps are a clever bit of software and are massive business in the travel sector now for good reason. They’re easy to use, you get a price before you ride and unlike taxi’s they can’t drive the longest possible route to your destination, raking up time on the meter. If you have a complaint you can file that with the ride sharing company and make a dispute.
Below are the three top ride sharing apps you’ll need to travel the world.
Grab is the ride sharing app in Asia. Download the app and create an account. Ride rates are very good and you can even get around on Grab Bike, which puts you on the back of a motorbike, gets you to where you have to quickly with a bit of a thrill!
Uber is in many countries worldwide and probably the biggest name in ride sharing. Wherever you’re going, sign up for an account with Uber and download the app. It’s good to compare prices with other ride sharing apps.
Lyft is available in the US and Uber’s main competition there. You won’t need any more than these three ride sharing apps to find your way around the world. Sign up and download Lyft here.
Once you’ve sourced your products and you’re ready to make your first order (and all subsequent orders for that matter), you’ll need to transfer money. Using your bank for this, will probably come with a hefty fee. By using Transfer Wise, you’ll save about 85% in fees and get a great exchange rate, adding to your profit margin.
You can register from most countries in the world so wherever you are, sign up here and start saving on international transfers.
Revolut is a fantastic credit card, giving you almost spot rates and low fees. It’s not a “credit card” as such, you top up your card in your home currency, then convert it to the currency of the country you’re travelling to and use as you would any normal credit card.
You don’t have to worry about going over your limits as you can’t spend more than you have on the card. It’s a super convenient way to handle your finances on the move.
At the moment it seems to be only available in Europe but keep an eye because they are going global soon.
Sign Up Here and get a free card (they’ll waive the sign up fee for you).
So there you have it, there’s nothing stopping you from getting out into the world and seeing what’s out there, find your niche and getting your own import export business off the ground.