Finding Suppliers

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Transcript below:

Hello, I’m Mike Bellamy, founder of PassageMaker Sourcing Solutions and volunteer at the not-for-profit China Sourcing Information Center.

I’ve been living in China full time now for over 12 years, and it is my pleasure to offer in this 2 minute video, some tips about how to find Chinese suppliers.

Thanks to resources like GlobalSources.com, it is pretty easy to come up with a long list of potential suppliers. But it is not so easy to take this long list and narrow it down to the right suppliers for your particular needs. So here is my strategy to help.

First, write down on paper what you think your ideal supplier would look like. For example,  do they have access to a certain raw material, are the ISO certified, are they a verified supplier, do they have X amount of employees, do the produce X amount of goods per year and so on… The dream supplier will be different for every buyer so write down what is important for you.

Second, compare the website or brochures from your list of potential suppliers against the attributes of this “ideal supplier” and create 3 piles. “No way”, “Maybe” and “Looks good” pile.

Be very conservative as you decide to place a supplier in the “looks good” vs. “maybe pile”.  Generally speaking, the websites and brochures offer you a best case scenario, in terms of capabilities and experience of the factory. Sales and Marketing people anywhere in the world, and especially in China, tend to over promise and under deliver.

For example, the website may say they can product 1000 units an hour. That may be true in theory, but perhaps due to common power outages or required maintenance on equipment, they average only 700 units an hour.

So if a supplier doesn’t look great on the website, they probably won’t look great in reality and you should put them in the “maybe” or “no way” pile.   Keep in mind, our goal is to narrow the large pool of potential supplier down to a handful of qualified suppliers, so be strict and don’t be afraid to fill up the “no way” and “maybe” piles.

Note that we haven’t yet contacted the suppliers to ask about price. Don’t do that just yet, because as soon as you do, you will sub consciously be attracted to the supplier that has what appears to be the best price, and it is very rare that the lowest price supplier also has the quality or lead time or other attributes your “dream supplier” would have. It is far more effective to narrow down the pool down to a handful of highly qualified suppliers, then start to talk price.  Don’t be seduced by the siren’s song of low price.

The strategy above should narrow the pool down to the top handful of suppliers. In our next video we will talk about evaluating them and negotiating with them.

See you next time. Wishing you successful China sourcing!