15 tips help your sourcing and procurement

1, face to sourcing and procurement the products, the first thing to learn about

When you face unfamiliar products, new products, modesty is necessary. Learn to ask the supplier for the product name, nickname, Instructions, market supply and demand, price, yield, weight or volume of cargo goods, precautions, supplier advantage. Whether you understand, it does not matter, when you ask the 10 or more suppliers, You will know. And then come back for a second communication, this time focusing on which part is not very clear, in the communication process, careful record of each vendor’s product superiority, price, focus on details. If the product is not clear to understand, you can consult your local sourcing and procurement agent, sourcing and procurement agent credibility higher than traders or factory. As a local sourcing and procurement agent, You can trust them, because they represent the interests of its clients.

2, where to find more than 10 reliable suppliers?

China’s main trade wholesale platform is Alibaba and Global Sources. Alibaba’s many small traders, the price advantage, but the quality of the product may not guarantee because of lots of fakes. Global sources for the most partner are the factories, even traders are also large traders, information is more reliable, quality is better than alibaba more secure. So sourcinghelpe.com recommend global sources.

3, to understand the product information compare the price

No matter sourcing and procurement any kind of material, be familiar with it before sourcing and procurement, know your suppliers in the production of raw material source, finished product price . lay the foundation for their own accurate compare price,with the purpose of negotiations. As a procurement need to collect information by different aspects of material sourcing and procurement, regional difference, etc.

4, choose Suitable for their own suppliers

Suitable for their own suppliers can grow up together with you, to help your growth, cost savings, management on supplier very easy . For bad suppliers, supplier management bring a lot of trouble. To judge a supplier I think it depends on quality, price, service, technology strength and strain capacity. Supplier shall not often replaced, implement long-term stability. Beginning to select suppliers, sourcing and procurement agent may be required intervention, and then carefully identifying suppliers of all kinds of qualifications, patented inventions, even field view in order to reduce the risk of sourcing and procurement.

5, choose 2- 3 suppliers and establish the monthly supplier rating system

Establish monthly Supplier Rating System (starting from the quality, price and service in three areas), the implementation of a quota system supplier, general product sourcing and procurement large quantities, you can select 2-3 suppliers to reduce sourcing and procurement risk. To avoid a single supplier quality control failures; also avoid the goods can not be delivered on time. Suppliers may be formed to contain each other in terms of price, to ensure that the sourcing and procurement of goods price advantage. In the process of cooperation of a supplier can not meet demand, and will not immediately need to develop supplier development situation. In this aspect of the sourcing and procurement agent has advantages.

6, make sourcing and procurement plan

You need to expect the next sourcing and procurement cycle changes in the price of the goods, You need to combine the market supply and demand for bold forecast.

When the goods price is expected to rise, prices rose more than 5%, you need to increase the sourcing and procurement order ;

When the goods is expected to decline in prices, price decline rate more than 5%, you need to reduce the amount of the sourcing and procurement order;

When the goods prices are expected to next sourcing and procurement cycle will not change, you need only in accordance with the original sourcing and procurement plan.

7, bulk sourcing and procurement need careful

The greater the batch sourcing and procurement orders, the lower unit purchasing cost. Batch sourcing and procurement means that companies need to bear the risks of goods prices, enterprises need to take cash payment in advance, the enterprise capital turnover reduced liquidity. At the same time bear all the risks such as the value of goods price down.

Such as VR products price changes is a roller coaster, product prices are reduced every day. If the batch sourcing and procurement a large number of inventory, will let you lose everything, losses. You should be careful so large quantities of sourcing and procurement plan. VR case/VR box products is essentially plastic shell, there is no technical content, In a short time a large number of suppliers to enter the field ,so price prices fell sharply.

8, effectively control the sourcing and procurement inventory.

Effective control of sourcing and procurement inventory need to judge the life cycle of product, product whether there is a door model technology, the raw material prices change situation analysis, production will intensify competition? If determine prices cannot be constant at a certain level, or at a certain level has a bigger risk, zero inventory is the best choice. In order to reduce inventory risk, you need to pursue the ultimate goal is zero inventory.

9, focus attention to important product

You should focus their attention to important product. When the value of goods to the sourcing and procurement order value by more than 15%, so you should pay attention to the product, when the goods prices more than 30%, you should pay special attention to. If the value of goods is 5% below the sourcing and procurement order, you can reduce the attention

10, how to calculate the freight transport of goods?

Freight transport of goods total weight standards are two way. one is according to the weight (pounds or kilograms), and the other is based on volume size. Usual volume formula: length cm* width cm * height cm / 5000 (Note: cm is centimeter).So you need to be paired with cargo weight and volume of cargo, it will greatly reduce shipping costs.

 

11, strengthen sourcing and procurement staff to negotiate

A good negotiator will at least reduce more than 5% of the sourcing and procurement cost. Unfortunately, sourcing and procurement staff are faced with traders or factory in China. And traders may be compared in the aspect of communication is easy, but traders need to be more than 20% of the trading profits, reducing the product price is very difficult. When you face a factory, it is more difficult to communicate, although you have a strong negotiation skills, when each other can’t understand, everything is zero. On the other hand, Factory in order to maintain relations of cooperation, the price is not very low, the price is almost the same basic and the prices of Chinese traders. Fortunately, if you face the procurement agent, and then let the sourcing and procurement agent directly to the factory, so it makes it easier to sourcing and procurement, without the need for a very good sourcing skills.

12  monthly performance evaluation system, establishing the sourcing and procurement staff

Sourcing and procurement staff monthly performance evaluation system, not only can inspire procurement staff work enthusiasm, but also prevent the buyer an effective means of bribery. China’s many factories, buyers are very trusted relatives, so could ensure that procurement jobs purity, if procurement staff is external recruitment, so buyers need to job rotation, usually don’t stay in a job for a long time. So you can properly to avoid sourcing and procurement personnel bribery.

13、Standardization product development and design

Product development design must pay attention to the standardization principle. What is the standard? Standardization refers to the standards tend to be a document that is used to determine a unified project, design, or technical specifications, standards, methods, process, or practice. Standardization can contribute to the independence of the relative to a single supplier (commercial), compatibility, interoperability and repeatability, safety or quality. Products, equipment or part of the use of common design, specifications, as well as the use of industry standard parts, increase the convenience of sourcing and procurement, reduce procurement costs, to obtain greater benefits.

14, Joint sourcing and procurement.

With the demand of different department or production unit, the focus on expanding the sourcing and procurement quantity, increase the bargaining space and discounts. Actually sourcing and procurement agent play Joint procurement role to reduce procurement costs.

15, updated regularly sourcing and procurement offer

Regularly updated offer at a time. If too many product categories, you can Sort. If Product value more than 30% of the total share, updated product prices Every 2 weeks; if the product value less than 30% of the total share, updated product prices Every 1 month. In fact, although you can rest assured of the job to them, they will do it for you.

 

 

About the Author:

David Wang is the founder of sourcinghelper.com, which helps small businesses source products in China. The company is based in Shenzhen, Guangdong province, the biggest wholesale center in the world. Connect with David Wang on LinkedIn or send him an email at info@sourcinghelper.com.

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