In the post-pandemic era, as soon as the travel ban was lifted, the tourism market started booming. People around the globe went for treks and camps as well. This change has driven the outdoor products industry. Companies selling outdoor products like camping devices, tents, barbeque ovens, outdoor furniture, garden tools progressed rapidly.
Along with this, businesses dealing in outdoor products started to buy from Chinese factories. If you are too willing to make outdoor products in China, you must understand how things work there. After all, Chinese business culture is quite different and there are lots of outdoor products suppliers in China.
E-commerce and digital marketing have revolutionized the way businesses all around the world function now. In this increasingly competitive world, business owners are seeking ways to not just be creative with their product and service lines, but to also procure the highest quality outdoor products from China at the lowest possible cost.
Although buyers and sellers work on different dynamics and both need to invest time, focus, and commitment in the process, global sourcing is an efficient way to reduce cost and establish an operation chain that functions effortlessly. China is considered as one of the best destinations for sourcing outdoor products as per global quality standards.
What makes China the best sourcing destination for outdoor products?
Procuring outdoor products from China or any other sourcing country should be based on the cost-effectiveness, geographical advantages providing easy and faster logistics, maintenance of global quality standards, and political stability in the source country. With stricter quality norms, the Chinese manufacturing units now focus heavily on achieving the standard quality parameters.
China is a low-cost manufacturing hub. The technical capabilities, production capacity, and cost advantages of sourcing outdoor products direct from China cannot be replicated elsewhere. The availability of labor is not just massive but also very cheap compared to American and Europe. This reduces overall operational costs and makes sourcing from China a beneficial strategy.
Ways to source outdoor products from China
Today, it is possible to source any product from anywhere in the world. However, since no other country can beat the quality and price of Chinese manufacturers, businesses around the globe is depending on China for their product manufacturing needs.
China has eventually emerged as one of the major sources of acquiring all kinds of outdoor products. Before you go ahead and make outdoor products in China, it is good to know how manufacturing units there are making such affordable items. Here are a few reasons why China is one of the best sourcing destinations for outdoor products in terms of quality and price:
- Big manufacturing units have been developed in China over the years, and these units can produce high-volume products easily.
- China is highly populated, and thus there is no shortage of laborers. Also, the labor cost is extremely low.
- The technical manpower in China is well-trained.
- Chinese currency is undervalued by 30 to 40 percent. This means every product produced and exported from China is 30 to 40 percent cheaper compared to any American competitors.
- China acts as per the dumping policy at the national level. This means, they sell products to other countries at a price lower than the price they sell in Chinese market.
In simple words, whether it is about sourcing outdoor products or any product for that matter, China surely proves to be the best sourcing destination.
Steps involved in sourcing outdoor products from China
The sourcing process of any outdoor products from China usually involved the following steps. These steps are carried out to ensure proper transparency and to minimize the risks associated with large-scale operations.
1. Complete analysis of products that you want to import
You and your team will first need to analyze why exactly you must outsource the production part. Next, you need to take decisions concerning the volume of orders. Also, decide how you want to receive the product – in the form of raw materials or finished goods. Lastly, figure out how the packaging should be, what licenses you will need to import the product, customs clearance permits, and the rules of China as well as the importing country.
You should collaborate with people from all departments to analyze the need of sourcing various goods or services. This should include the volume of goods required, whether they require raw materials, a component, or a finished good, and its packaging requirements. The team also needs to analyze the logistics requirements and custom clearance permits, licenses, and regulations of both the countries involved.
2. Assessing China’s local manufacturing suppliers
Then, you need to make a thorough assessment of the supplier market. You need to list down the best source market for our specific product need in terms of cost-effectiveness, lower risk profile, lower government regulations, and easy availability.
You need to assess the market according to your purpose, whether you want a finished good in which case you will need to analyze the manufacturing process or procure the raw materials. You will be analyzing the custom requirements, taxes payable, and international trade rules of the source country. You will also be assessing different modes of transportation through which you can procure the products.
Once you know what you need to produce, why you need to produce and how much you need to produce, it gets easier to find a suitable manufacturer. You will compare the production capacity, quality of product, and cost of different suppliers, also take care of quality control in China. If needed, you can hire third-party inspectors to check the product while in process and after completion.
3. Make a sourcing strategy
Before placing any orders, you will have to make certain decisions. List out your goals and evaluate if the sourcing is a one-time process or a repeatable one. Based on cost and risk evaluation, you need to formulate a sourcing strategy. Your strategy must include if you are going to directly work with the supplier or you will be partnering with a sourcing company.
4. Evaluating the cost price
You will first have to go through all the quotes received from different suppliers. Next, calculate the price per unit considering the payment terms. The cost price of one unit must include:
- Manufacturing cost
- Transportation cost
- Duties and taxes
- Overall management costs.
You can directly ask the suppliers for quotations. After evaluating all the factors, you will calculate the bid according to the unit price of the product and payment terms.
5. Going through negotiations and signing the contract
Once everything is sorted, the last part is about negotiating terms with the manufacturer. Usually, your sourcing agent will negotiate on your behalf. Terms concerning purchase quantity, discounts, costs of transportation, and payment will be discussed. During the negotiations, quality parameters should be communicated to the supplier. You can even ask the supplier to give you a sample of the product.
Once you have selected the supplier, you will list down negotiation terms that must include purchase volume, discounts available, costs of transportation, and payment terms. After both the parties agree to these terms, communicate the quality parameters clearly to the supplier.
In the next step, you can ask the supplier to produce and send a sample for your verification. Once the sample is approved, the final contract is made and signed by both parties.
How do sourcing agents fit in the operational cycle and what are the benefits?
Sourcing agents make the entire experience hassle-free. They are reliable and licensed to work between the foreign company and the destination from where goods or raw materials are sourced. In the absence of sourcing agents, sourcing outdoor products from China or any other source country would be very difficult.
They have adequate personnel to perform major functions in the operational chain such as:
- They identify local suppliers who can meet the global quality standards in their services and goods.
- They present in the local markets so that they can easily facilitate negotiations in bulk pricing.
- They arrange for sourcing of the samples and once approved, final drafting of the contract is initiated by them.
- Once the manufacturing process begins, they carry out factory visits, coordinate with logistics for packing and transportation, and perform quality checks at all levels.
- They do the entire paperwork that is needed for customs clearance.
In short, they take over the entire operation chain.
Indeed, sourcing agents are important in performing above mentioned activities, but you should be careful to do a thorough check about their experience in the niche market, their licenses and registrations, and reviews. You must also make sure that they have staff that can easily communicate with you in the English language and has an excellent presence and contacts in the local markets.
Challenges associated with global sourcing and its solutions
Although there are many advantages of sourcing outdoor products made in China, it is not easy for new establishments to make connections in the local market and source products as there are many challenges and hurdles that one must face in the process. Some of the challenged that global sourcing strategies must face are:
- Maintaining an effective communication line is difficult due to local language barriers (Mandarin in China) in the source country.
- Lack of control on the product cycle can result in lower quality in the final product or increased spending and reliability on third-party quality checks.
- Arrangement of logistics is another factor that is a challenge you must face when you are not in the domestic market.
- You need help from local third parties who have the technical knowledge about the entire process and can effectively communicate in the local language at the base level. This is an additional cost that you will have to incur.
Even though there are many hurdles to global sourcing, it is getting easier with technological advancements and is still very beneficial for the expansion of the business. You can easily use global sourcing to your advantage by overcoming these hurdles with the following practices:
- Use the internet to your advantage and perform thorough research to analyze the opportunities present in the source country, shortlist the suppliers, and do a background check on them.
- Planning well ahead in time regarding any in-field factory visits to ensure that the production line is in sync with your quality parameters could save you a lot of money.
- You can take help from a reliable sourcing company that is proficient in handling all the challenges listed above in their local markets.
- Establish a clear communication line during the entire operational cycle and pay particular attention to the scrutiny process before signing a contract.
Conclusion
Many companies are now relying on global sourcing as it is coming up as the cheapest procurement option. The best way to handle global sourcing successfully in China is by gaining some expertise in the field and by identifying the complexities involved in the production line. Come up with ways to overcome the challenges that you will face while sourcing outdoor products made in China.
Formulate the right strategy that can allow you to carry out the same operational line again and again without causing any major delays. Effective communication and focus on quality are the keys to finding success with global sourcing. You will learn that the supply chain of outdoor products in China is huge and thus finding what you need is possible and profitable.
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