Ways To Avoid Sourcing Mistakes

Making mistakes while sourcing your product can cost a lot of money, sometimes, it would cost you a great deal of time too, as you might potentially need to start all over again. It is always best to start with a plan while sourcing. This plan can be used as your template every time you need to look for a new product. So, here are some ways to avoid sourcing mistakes

Here are 6 simple tips to come up with a great sourcing plan

  • Create a detailed specification of the product you wanted to source and capture it in a document; which will tell . the supplier exactly what you want. This document should include product details, photos, dimensions, colors and sizes, drawings, material components, packaging, and other related instructions.
  • Categorize potential suppliers if they are Manufacturers, Wholesalers or Distributors.
  • Request for a sample or a prototype. AtIn this stage, you can request for customizations on the product and the packaging. Samples are sometimes more expensive than the cost of the product. The manufacturerer may need to use contractors to create your logo, hangtag, product care tags, and packaging. You can also request material swatches, sizes, and colors.
  • Negotiate the price;, some manufacturers would give a discount based on the volume of the order. Always order pasts the MOQ (Minimum Order Quantity).
  • Create the contract by clearly stating the terms and conditions before ordering.
  • Lastly, always compute the landed cost. Landed cost is the sum of all costs associated with the a product till it you receive it. It includes the price of the product, transportation fees (both inland and ocean), customs, duties,  taxes, and tariff if imported overseas, cost of insurance, currency conversion, crating, cost of handling, payment and other overhead costs.

Landed Cost Formula = Product + Shipping + Customs + Insurance + Overhead

See also: AVOID COMPLICATED BUYING PROCESS

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