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After checking supplier’s background, oftentimes you end up with a handful of suppliers that all have nice profiles. So here is the question, how do you pick out the best choice?
That’s what you are going to learn in this article, the 5 aspects you can compare among the last few suppliers.
- Low Price Often Comes with Reasons
Undoubtedly, price is first. Yet you cannot simply choose anyone who offers the lowest price. Be mindful of the reasons behind the inviting prices much lower than everyone else.
It might be that their production quality is not as good as average because they use thinner material. Maybe the actual product size is smaller, but you can not tell the difference merely from product photos. Or maybe the quotation is for overstocks instead of newly made products . Once they run out of stock, the quote for reorders in the future would be much higher. In a word, you get what you pay for.
Assume you found the original manufacturers, a difference of 10% to 30% among their quotations is quite normal. That’s because factories’ management or manufacturing costs vary from case to case.
For example, the largest pantyhose manufacturer in the world may charge you 40% to 50% more than a small factory for the same socks. If you represent a big retailer to purchase products, you may be more willing to pay more to buy from a larger manufacturer, which can provide you with good quality products and after-sale service.
So when you are comparing the prices, try to figure out why they are so different, and make clear whether you can accept the reasons and are willing to pay for it.
- Get Samples to Evaluate Production Quality
Except for prices, the quality of samples is the second important thing that you can compare among suppliers. Regardless of the suppliers’ business backgrounds, prices they quote, or their promises saying the product quality should be good, you always need to get a sample in hand to assess if they can produce good quality products.
If you are satisfied with a supplier’s quote, ask for a sample from their previous bulk production. Of course, you need to pay for the sample and shipping.
For instance, if you want to purchase 500 teddy bears, the wholesale price is $2 each. But you may need to pay your supplier $30 sampling fee. Because the $30 sample fee has included the international courier service provided by companies like FedEx and DHL. They charge a minimum of $20 to $30, even if you ship a piece of paper.
Well, if you are planning to get samples for a product from 3 to 4 suppliers, it will easily cost you more than $100. If you want to source 5 different products, and for each product, you want to compare at least 3 suppliers, then the total sample cost will be at least $500. That’s a lot of cost before you purchase any products in bulk.
In this case, I strongly recommend you to have someone you can trust in China. It could be an agent, just like what my company is doing now. We help you collect samples from multiple suppliers, check the quality, and ship all the good samples to you in one box. This service alone can help you save hundreds of dollars on shipping.
However, if you want to develop a new product, the strategy for getting samples would be different. Let’s look at the following two situations.
Situation 1: If the product sample can be made by hand.
Plush toys, apparel, and backpacks fall in this category. Manufacturers usually charge 100 to 200 dollars to help you customize a sample according to your design. If they can get all fabrics and accessories well prepared, a sample can be made within just a week. I suggest you get samples from one or two suppliers at a time, and switch to others if you’re not satisfied.
Situation 2: If the product should have mold created first.
Plastic products fall in this category. Creating molds and producing a sample usually costs thousands of dollars and takes at least 30 days. So I suggest comparing suppliers on other aspects first to evaluate your suppliers in depth, then pay them money to create the sample. After all, the sampling is expensive and time-consuming.
3. Good Communication Saves You Energy and Costs
Even though I put the communication with sales representatives in the 3rd place, I believe it’s as important as price.
As a leading China sourcing company, when we were helping our clients find suppliers, we also take the communication quality of suppliers as the main factor to decide if we can place the order to them. Because through the communication, we can feel if they are professional and responsible enough.
Although we speak the same language with Chinese suppliers, and we don’t have time zone or cultural differences, we still find it a nightmare to deal with those who are bad at communication. For example, if you have repeated your requirements over and over, but you still find the product is not made as you requested in the end. So you have to spend huge efforts to argue with them to reproduce the product or refund the money. That’s a real headache.
What’s worse, many Chinese suppliers are not fluent in English writing or speaking. They usually prefer to hire new graduates to contact foreign clients, because of lower salaries. However, only a very small percentage of them have good client communication skills and good product knowledge.
From my perspective as a sourcing professional, a good communication should have two features.
Feature 1: The supplier can always understand what you need.
This means the supplier will try to provide the result you need without too much repetition on your requirements. For example, I have sent a testing inquiry to several suppliers on Alibaba, to ask the price, the customization costs, and an estimated shipping cost to the United States. However, only one of the suppliers answered all my questions. The rest suppliers replied with quite similar content like the following ones, not replying to my questions, but only introducing their company background.
Feature 2: The supplier is professional enough in his industry, and can always give suggestions.
A very good example is that when we’re helping an American client develop a self-stirring baby bottle. We gave the factory our client’s prototype made by a local American company. We asked them to estimate a quote for massively producing this item.
However, they gave us not just a number, but also suggestions to change electronic components, redesign the circuit board and the internal structure of the product. By following their advice, the unit cost was reduced by around 20%.
4. Time is Gold for Trending Products
The No.4 thing you can compare among the last suppliers is the lead time, which means after you place the order, how long it takes to produce and get all products ready to ship.
In most cases, if you place an order of thousands of dollars to the supplier, they’ll need 20 to 30 days to start a new production process. But the lead time depends on product category, the production capacity of the manufacturer, and their production schedules.
For apparel, including lingerie, the lead time could last 40 to 60 days. There are lots of time-consuming steps, such as sourcing fabrics and accessories, and dyeing products. And if you need to create molds for customizing products like plastic products, it takes 20-30 days just to have the mold created.
So if you have several supplier’s options, their prices are similar, then it’s better to choose the one that has a shorter lead time. Maybe their production capacity is bigger, or their production schedule is not very full yet.
Especially if you are purchasing trending products, such as the fidget spinner or hoverboard years ago. You’d better choose those suppliers who can deliver products right away, even if the price is a lot higher. Because one of the key points to making profits with trending products is to take action as fast as possible. If more and more people realized the opportunity of this product, it would be too late to start selling it.
5. Shipping Solution & Shipping Cost
If you have a trusted freight forwarder who can help you ship products from Chinese suppliers to your country, you don’t need to worry about this. But if you don’t have one, and you prefer suppliers to help you handle logistics, then you have to compare not only product prices, but also logistics costs and solutions.
Because it usually happens that some suppliers offer very low product price to attract buyers. That means they don’t aim to make profits from selling products, but charge more on shipping fees after you place an order. The other case is that if a supplier has little experience on shipping goods to your country, they would get higher shipping quotes from freight forwarders, which also increases your total cost.
So it’s very important for you to combine the product cost and shipping cost together, to compare the total cost among all suppliers.
Besides, if you are from countries or areas like Africa, Latin America, East Europe, where there are fewer services available to deliver to your doorstep and handle the importing customs process, you’d better choose suppliers who have the shipping solutions to your country, instead of choosing those who offer lower product price.
To Wrap Up
I hope these skills can help you find out the best supplier to make your product. If you have any questions about today’s topic, let me know by leaving a comment below.
