A trading consulting firm must have a vast network of suppliers to be able to procure products / services at the right quality vs. price.
In this part we explore the 2 different ways to create a relevant supplier list for your client.
Overview of our Process
Searching for the right Supplier – Supplier Identification
Yearly
we procure around 600 items from different industries. Over the years
we have built strong relations with factories that cover our core
client’sindustries products. At the same time we are usually asked to
procure products that we have never worked on before. We have the
technical capacity to understand the products but searching for the
right supplier becomes paramount.
Most procurement firms and middle men use websites to find their suppliers such as the following:
www.alibaba.com
www.made-in-china.com
www.globalsources.com
www.hktdc.com
www.b2bchinasources.com/
Based
on our experiencewe are of the opinion that Alibaba is probably the
most complete supplier search engine for the Chinese market, covering
every single type of industry and product. We believe that made-in-china
has better industrial product factories (such as Pipes, H-Beams,
Machinery, etc).
The biggest drawback of using these websites is
the lack of reliable information, making an initial due diligence an
important part of our process. Some pages at this website sell
themselves as a factory or a trading company, sometimes they are
neither. We have also had the experience of finding fake companies who
sole purpose is to frame clients. There are various ways to check on the
validity of the information posted but we will talk about this in
detail later on.
One of the best way to find reliable factories is
visiting trading fairs around China. Though the canton fair is the
biggest and most famous, it’s not the only one. There are sourcing fairs
that specialize in industries such as:
Power Transmission and Control (PTC) Exhibition (Shanghai)
China International Medical Equipment Fair(Shenzhen)
China International Clothing &Accessories Fairs (Beijing)
China International Auto Parts & Accessories Trading Fair (Ningbo)
China International Auto Products Expo (Shanghai)
China International Petrochemical Technology and Equipment Exhibition (Shanghai / Beijing)
International Trade Fair for Infrastructure, ITS Traffic Management, Safety and Parking (Beijing)
This
requires time and money to assist to this types of fairs. But one thing
is for sure we can cover more ground on a fair and accomplish a lot
more in less time than working on line.
From the fairs and the websites we make a list of suppliers to quote which looks like this:
This is the guide that will help you keep track of your progress. The
more suppliers you contact the better chances you have to meet the
right company to work with.
Over the years we have built a data
base of over 10,000 suppliers making our job easier and our dependence
on websites and fairs less and less.
Tips on Communicating with the Factories
1. Have all your product information and specification in a document (as we discussed on Part I)
2.
After contacting the suppliers and giving them the document take the
time to contact them again and asking them about their past customers,
the countries they have sold to before, when did they started doing
business, if it’s a private owned company or state owned, etc.
3. Ask for a copy of their business license. A Chinese business license looks something like this:
4. Ask for a copy of their company profile.
5. Ask for an electronic catalog of their product.
6.
It's important to talk as much as you can with the supplier via phone.
IM is very popular, but at the same time you lose a lot of information
if you don't call.
On the next part we will be discussing
about Due Diligence and what information is important to get from the
supplier before making a decision to work with them.
JLC
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