Employing a Sourcing Consultant in China
- US Active
Many companies have been burned by trying to conquer China on their own. Whether it has been lack of information, inability to understand local culture, or dealing with supplier quality issues, one of the best alternatives in assuring a successful entry into China is to employ a China sourcing consultant.
Selecting a quality sourcing consultant to help your company source from China is as important selecting a quality supplier. The sourcing consultant will be an extension of your company, they are your eyes and ears in China, thus the quality and experience of the sourcing consultant will be a very important factor in your success in China.
Sourcing consultants not only bridge the cultural gap, but they perform the due diligence and hedge risks for your company. A company can do their analysis and identify opportunities and risks in China, but unless the company has prior business experience in China, there inevitably will be small gaps missed during the process. A sourcing consultant with many years of experience in China can eliminate learning curves and pitfalls that can be very steep for foreign companies sourcing products in China on their own.
How to hire a sourcing consultant?
There are a myriad of consulting companies of various quality that offer a variety of services, therefore the most important criteria in selecting a sourcing consultant is one that is reputable and fits your company’s objectives.
Most sourcing consultants in China will be well trained in working with Chinese suppliers, but good sourcing consultants will bring more to the table with their ability to solve problems and foresee future difficulties that sometimes arise with foreign companies sourcing in China. GOOD sourcing consultants solve problems and create solutions such as:
- Adhering to local laws and understanding their level of enforcement
- Selecting a quality supplier by reviewing their management, employees, factory layout, equipment, experience, and location
- Training the Chinese supplier and negotiating a fair price for both parties, thus providing the supplier with incentives to continue the business relationship
- Understanding negotiation tactics and the psychology of Chinese suppliers for negotiating with Chinese suppliers
- Reducing costs by modifying the clients products to adapt to a Chinese supplier’sproduction and manufacturing capabilities
- Altering the production process to take advantage of the reduced costs in labor (using manual labor versus importing production equipment to reduce costs, because importing the equipment for production would not be cost-effective)
- Protecting IP by splitting up different parts of the production process and developing a mutually beneficial relationship with the supplier that would deter the supplier from damaging the business relationshipPerforming on-going quality control and training with suppliers to ensure the product consistently meets industry or global standards.
US Active is a sourcing consulting firm in Shanghai, China. We assist companies, from a few million dollars in sales to multi-billion dollar giants, with manufacturing and sourcing products throughout Asia. For more information, please see our website: www.us-active.com.
Related Articles:
China Sourcing: Common Pitfalls
China Sourcing: Factory vs. Trading Company
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