How to source products like it's your damn job.
(Lifetime Access Edition)
Welcome.
This is a no bullshit guide to sourcing products.
How to find, vet, and engage suppliers and factories and get your products made and delivered.
After we're done you'll be ready to source products like it's your damn job.
Let's get started.
Read this first.
I don't know why you bought this guide.
Ok, obviously I know why.
You want to get products. Fast, cheap, and great quality.
Maybe you're looking to start a side gig, you could have a successful Shopify brand, could be running a big Amazon FBA company.
You could have been using places like Alibaba before or maybe you've never ordered anything and want to do your homework before you take the plunge.
Whatever the reason, you're serious about it.
Good.
With that in mind, let's get right down to it.
The world of sourcing and production (finding products and making them) is full of jargon and shorthand. Some of it is just industry talk, some of it is very important to know and can mean wasted money if you don't.
So I wrote this guide to focus on what's important.
I trimmed all of the fat and none of the flavor.
It will teach you how to find what you're looking for and get what you want without getting burned or paying costly mistakes.
It is written with the intent to save you an insane amount of time and produce the juiciest results. All lessons I've learned from making products sold in big name big box stores, glitzy boutiques, and ecom platforms. I've toured factories around the world and hit the big trade shows.
Not only have I seen how the sausage is made, I've been in it up to my elbows. I usually don't like swinging d*ck, but if you're anything like me, you want to know who you're listening to.
So, if you'll indulge me a moment, I'll tell you why to listen up:
• I run a six-figure sourcing and production business called SB&P that works with brands all over the globe from startups to Fortune 500s helping them make the best damn products their customers can handle.
• SB&P has offices in NYC, LA, and China so we're in the thick of it from product idea, factory production, to delivery. We work the entire supply chain from snout to tail.
• I attend the best trade shows around the world that include ASD Market Week in the US, Cosmoprof in Italy, and the Canton Fair in China. Trends that go into big retail appear here first, keeping our finger on the pulse and ahead of the market curve.
Ok. That should give you an idea of my work. I am not trying to brag but in this day and age you have to from time to time.
With that out of the way, the lessons detailed here cover material in about 5 to 10 minute stretches. Some of you have home offices, others may have to read on your commute to work.
The lessons are short, punchy, and concise for a reason -
this is to give you serious fucking chops at sourcing product.
It's not here for moving prose or to make you laugh (though we might have a few along the way).
Also, it is broken into digestible sections for another reason. I wanted it to be easy to add updates to it. If recent events have taught anyone anything it should be that you better be ready to adapt to the entire world changing.
This isn't a one time read, but a resource that you can continue to look back on when building your brand's product line.
I'm going to make this damned simple so that by the time you're done you will know exactly how to start making the best damn products your customers can handle.
The rest? You're obviously a go-getter, you've got some grit.
You'll figure it out.
Enough jawing.
Let's learn how to source product like it's your damn job.
P.S.
If at any point through this you say fuck it and decide you want to drop the dough for someone to come in and do the heavy lifting?
.•.
What the hell is sourcing anyway?
Before moving forward, we need to define our terms.
Googling it will present different definitions and do a pretty piss poor job of actually breaking it down. The reason it gets murky is that the industry can't agree what to call everyone. So, the names may change for some, but you'll get a solid grasp in less than 250 words.
• Retail:
This is ostensibly you. The guy who bought the products or paid to have them made. You're selling your products at a price to cover your costs, have some money to buy more goods, and make some profit to put in your pocket.
Retail is selling to individual buyers, regular people.
• Wholesale/Development Agencies:
These are specialized companies. They focus on the import of goods, development of new products, and selling them to retailers, B2B.
They typically buy from agents who handle business connecting to the suppliers or factories.
These can range from warehouses full of junk to highly creative and trend-setting developers.
• Distributor/Agents/Traders:
These are companies or even individuals who manage orders and communication between those wanting products made and the people who make them.
They can range from greasy middlemen to highly connected facilitators.
• Suppliers/Factories
Typically the jargon is supplier if they make goods to be sold as is and maybe customize the packaging. Think of paper towels. They'll make a bunch of them all the same and then put them in the packaging of their buyers.
(Incidentally, this is called White Label/Private Label).
Factories are the places you'll make your custom goods, items that you had unique designs for.
These terms can be used interchangeably by some.
Now you know them.
The first thing you may say is "Obviously buying directly from the source, the factory is the best!"
Well sometimes it is and sometimes it isn't, because you're not talking about just the cost to make the items.
Some factories do not deal in the finished completed product. Most of the time factories only deal with a certain component of the item and it is then usually up to an agent or development team to assemble the item for retail.
Example: In cosmetics, hardly any suppliers sell the fully assembled product. You need to source the chemical formula factory and then the container it will be in and then the packaging, etc etc.
It can get expensive.
You also have to pay to have them shipped and if they are coming from overseas and you'll need to pay for customs and duties, file them correctly, ship to a warehouse or store or.....so on and so on.
Typically the factory doesn't like handling all that for the same reason you thought when you read it. It sounds like a pain in the ass.
Hence, all the people in the middle.
So sourcing isn't just how to get the products.
It is also knowing the best way for you to get them to you.
Write that down.
It really is that simple.
I told you this would be.
Easy is another thing, because "the best way" isn't always the same answer for every company or even for the same company every time.
Now that we know what sourcing is, we can talk about why most brands have shitty sourcing: They find their source once...then never revisit their terms or processes or learn anything more about what is possibly the most fundamental part of their business, their product.
As a result, when one little thing goes wrong (or the entire world economy grinds to a halt for a few months), they're screwed.
They don't know how to go out and hunt, vet suppliers, or negotiate terms. So they are rolling the dice and hoping on their next supplier instead of making a considered play.
Or they go out of business.
This is all to say it is really important you make getting the products for your brand a serious part of your business.
It's not just something you do once.
.•.
Let's go fishing.
My grandfather was definitely of the past age.
He was just as much a scholar as he was an outdoorsman.
I grew up in the South and he would take me hunting and fishing. I loved hunting, but I found fishing the most boring act imaginable.
He eventually explained why I wasn't having much fun or success; I was only focused on the ending.
He said most of the act of fishing was done before we ever got out on the water. Planning for the right location, preparing the right lures, knowing how to use the pole, picking the right bait.
Only after all that was done did we finish by actually catching fish.
This is exactly the way you should look at getting your product.
So we're going to look at the best fishing holes and the right tools for the job. Get those right and you'll enjoy the process and get a lot more success.
Best fishing spots:
So there are two lanes to get products.
1. Online
Manufacturer directories, company websites, cold email, etc
2. Offline
Trade shows, wholesale and factory showrooms, etc
Obviously back in the day offline was the go-to and actually it can still be extremely useful...but not for beginners.
So we are going to focus on internet-based resources first.
Online
AliExpress
This would be the training wheels of sourcing products but that doesn't mean you can't run a real deal business with it either.
AliExpress is more a retail partner than a traditional source. I'll explain why. You can order products, as little as a single unit, and they will handle all aspects of delivery, however, they'll charge more for all of this.
They are really only viable for dropshipping, but it provides a great way for beginners to make their start or to test a certain niche before making a large investment.
PROS
+ Low investment
+ Low MOQ
+ All delivery costs included
CONS
- High cost per unit
- Little to none customize options
- No term negotiation
P.S. The world of dropshipping has changed a lot in the last couple of years. Now there are many great options if you want to focus on this model, including plug-ins that link directly to Shopify. These include Oberlo and Spocket. I don't usually suggest the dropship model, but that's another story maybe for another guide.
Alibaba and similar platforms
Alibaba is far and above the best resource for sourcing products from overseas. That being said, it should be only one of your resources.
Solid alternatives and better options for some circumstances do exist.
There are a lot of things to consider when navigating these sites and when contacting a supplier (and we'll get to all that), but for now you just generally need to know what it's about.
Factories list their profile, manufacturing capabilities, and product examples on the website.
So when you type in 'coffee cup', you get a whole list of coffee cup makers for you to contact.
That's pretty much it. To start anyway.
PROS
+ Varying capabilities to make custom items
+ Negotiable terms
+ Some of the best pricing
CONS
- High MOQ
- Typically limited shipping abilities
- Buyer beware for vetting suppliers
P.S. Quite a few Alibaba alternatives have come up. Honestly, the vast majority suck. A few like Global Sources and Range Me are very much worth checking out. You don't have to pick one of those and stick with them. You should be using all you can to do proper product research and to establish redundancy options.
Offline
In the modern push-button age, the common wisdom is that online digital is automatically better. However from time to time getting off your ass is not only a possibility, but could be very beneficial.
Now this section is going to be highly dependent on where you live or how far you're willing to travel. Nine times out of ten I always suggest starting the online route, but you should always consider that one out of ten before making your call.
Tradeshows
This is becoming a very polarizing venue. Recently most have become a mix of obviously desperate and dying factories and companies alongside some of the most innovative and cutting edge suppliers.
That can be a large gamble to bet on paying admission and travel expenses.
On the plus side, most tradeshows will have an online directory of vendors for attendees to view, so you could gain exposure to these suppliers for just the price of admittance.
Mostly these tradeshows are not for beginners. You will need a firm grasp of what you're wanting to accomplish and your market to get the most out of these.
However, if you've got your brand up and running and have gained some success? These can be a great way to help deepen your supplier options and see what is new and exciting in your niche.
PROS
+ Direct contact with factory reps
+ Showcasing new tech and products
+ Emerging trends
CONS
- High cost of travel and time commitment
- Usually requiring higher industry knowledge
Distributors and wholesalers
These will take a decently tuned bullshit detector.
Regardless of the product type, you need to be able to walk into a place and get a decent read of the place.
Are the employees sitting around on their phones?
Does it look like a shithole?
Or do the people look busy and the place organized?
Essentially these companies take on risk to develop and manufacture some products themselves so they can show them to retailers to buy.
So these products have to fucking sell TWICE.
This makes the people who run these places either savvy or dead.
Factory
-> Distributor/Development Agency/Wholesaler
-> Retail
-> Everyday Customer
What does this mean for you? It means a highly experienced and market knowledgeable business can help inform and guide you on products that will sell.
For these services, they will add to the cost of your product. but it is worth considering.
PROS
+ Proven track record
+ High industry experience and knowledge
+ Can typically handle shipping and logistics
CONS
- Higher costing than from factories
- Can be difficult to negotiate terms
- Varying ability to customize products
.•.
Fishing (Part II) - Size them up
If you are new to sourcing products, I want to share something with you. For the more experienced, bear with me and feel free to smile knowingly.
When I first started I was pretty naive.
What is worse is that I was naive and I thought I wasn't.
So when I spoke with suppliers I thought I had a good grasp of who was bullshitting me and who would come through.
Let me save you a lot of heartbreak (and potentially a lot of money), never trust anyone you buy from.
I don't mean be a weirdo.
I just mean never assume someone is going to do something they don't absolutely have to or that they will keep their word without something holding them to it.
It is not that everyone is a filthy thief (though some of them are) but it just isn't good business. You're busy, they're busy, things change quickly, and you're a small part of each other's lives.
Think of it this way:
Don't put that on someone.
Don't ask someone, even if they say they want to, to be a better person than the bare minimum. They might be great people, but there is always a time that comes in business where shit happens and they have to look out for number one.
The contract is there to help them make sure they do the right thing. Help them help you by making sure you have contracts or purchase orders or something that helps makes sure everyone is going to come through.
Whew. Done.
Damn, that piece of advice is worth the price of the guide by itself. Trust me.
Finding the one.
Connecting to a supplier is a lot like dating and relationships.
You can settle for something that is quick, dirty, but gets the job done for the moment.
You can also spend time establishing your goals and finding out more about who they are and their past and see if you two have a future together.
We are going to outline best practices for vetting suppliers once you think you've found them.
Always do this more than once for each potential supplier.
The first step is to hit the basics at a glance.
99% of the time if a supplier doesn't pass a check at a glance, do not waste any more time looking into them.
Doesn't matter how good of a deal their price looks.
Don't do it.
So what are we looking for during the glance check?
I've highlighted a few things to focus on.
At first, you will want to take your time and seriously think about these profile sections and what they mean, but soon you'll be able to open a bunch in new tabs and bang right through them.
You'll notice I'm not really going to be talking about 'Verified Suppliers' and the star ratings. A little known secret is that on many of these platforms (Alibaba especially) you can simply pay to get these things.
You should only be considering verified suppliers with 4+ stars, but treat that as the minimum and don't put too much stock in it.
The first thing to check is the response time.
Response time, response time, response time.
Look at this before price, before product pictures, before everything.
I'll write it again, response time.
You can infer so much about a company based on the response time.
• They can afford to have a dedicated sales or communications employee ready to handle new business.
• Reference this with their transactions, you want both high.
• High response times suggest they will have invested in someone with at least decent English.
If that passes then we move on to pricing.
Pricing, multiple options not just the lowest.
Looking at this you can see quite a few different price points based around your order amount.
This is what you want to see not just one low price.
These multiple prices will let you get an idea of how well the supplier will be able to fulfill your needs.
If you are just starting out or wanting to test them, this will give you a good idea of what prices and quantity it will take to start a relationship.
By like token, if you're moving serious numbers and are looking for a backup supplier, moving to a better one, or need additional stock, this is a great sign for you to see them show price drops based on larger orders.
This shows a great opportunity for negotiating prices or services if you will be bringing large orders or consistent repeat business.
Customizing options, check the minimums.
You instantly want to see a few things for your situation.
How they're listed is different for each kind of product, but you want to see color options, logos and branding, and especially packaging.
Now take these numbers (like 1,000 per color) and check the order price options.
With all these factors you know generally what your options are with this supplier fulfilling what you want.
Using this example I know that this supplier for $3.70/per piece I need to order at least 3,000 pieces and I get:
• up to 6 colors
• my logo on the items
• packaging with my branding
And they can start answering my questions very quickly.
This is great, I can very quickly glance at this profile and see if they fit into the range of what I am looking to accomplish and prepare to contact them to dig deeper.
There is still a lot to do, not to mention shipping costs and so on, but this is generally how you'll go about quickly building a list of suppliers to start contacting.
Keep in mind these details of quantity, customization minimums, price is negotiable to varying degrees, but they are also an estimate.
If you want a coffee cup decked in crazy patterns, with a custom lid, and luxury packaging, then expect the pricing to be very different than if you wanted to order all blue stock cups with a logo slapped on.
And it might turn out a great-looking supplier at a glance might not be able to accomplish some of the things you want to be customized.
But we'll get to that next in what to do when contacting them.
I won't spend much time on bad examples, but one is a good exercise.
Really look at this one, there is more disqualifying details than the three I highlighted.
Again a lot of information can be learned about the company from just these entries. I'll only hit a few brief details.
• The customization minimums are very low. This can mean that the capabilities are few. If they can do a lot of different things, that takes time and resources, so they'll make sure its worth it to them by making the MOQ higher. If low then its low effort to them.
• The pricing here can be deceptive. It looks like they are offering quite a few options, usually good. But look how the high end tops out at just 1,000 pieces. I'm sure they will offer price reductions at higher order quantities but they don't even bother listing any. They are catering to small orders, usually meaning they don't get many big repeat orders. Bad sign.
.•.
Fishing (Part III) - Preparing Bait
Now we have our fishing spots scoped out and we know there's some possible catches in there.
It's time to see if they'll bite and if they are worth keeping or throwing back in.
Just like picking the right bait beforehand, doing some homework and collecting information about your product will go a long way.
The way I suggest thinking about this is to imagine you have 10 minutes to talk to a lawyer for free.
You want to ask as many questions that will help inform what to do next, but need to keep it organized and concise.
There are far too many variables to cover every product you readers may be looking for, so I will hit the big ones and you'll add what is specific to you.
Art and Designs
This is a super simple time-saver.
If you are going to incorporate logos, designs, patterns, etc, then not only have that ready but send it with your initial inquiry.
If you are just starting your brand then something gotten off Fiverr should do fine to get you started.
For the more experienced brand owners take the time to build a product brand kit. A packet that includes all the artwork files, packaging instructions, and so on.
For very custom and unique items, like clothing, I highly suggest finding a freelance technical designer and building a relationship with them.
They may cost a bit in some cases, but if you know the exact product you want to make, they can create precise design files (tech packs) that are like the exact blueprints to your item.
Suppliers can eyeball them, run the math, and give you a very precise costing quickly.
All art files should be sent in .ai format, Adobe Illustrator.
It is pretty much the industry standard. I just saved you a million emails asking you to resend the art file.
Packaging & Packing Instructions
Packaging is often overlooked these days because ecommerce shops usually focus on the product itself. This is very much up to you what you're selling and who you're selling it to.
If you decide packaging is important or you want something a little unique, definitely mention it even in a general way so they can let you know their capabilities.
You do not want to go through the expensive headache of trying to have separate suppliers for product and packaging.
This is also important to discuss especially if you plan to sell your items on Amazon or similar as there are strict rules packaging must adhere to.
Packing is usually forgotten because it has more to do with logistics and logistics isn't that sexy.
Packing is literally how your goods are put in shipping boxes and sent to you. It is also the reason shipping 50 pillows can cost more than shipping 500 hats.
Most people only think of shipping in terms of weight, but the amount of space your products take up is sometimes more important.
If you don't know the ways your products can be packed, and you probably don't, ask the supplier. They will be able to advise you.
Shipping Options
Let me say this, Alibaba shipping is expensive.
There are many reasons for this that aren't worth going into, but there are many ways to buy goods from Alibaba without using their shipping.
However, if it is your-very-first-ever-cherry-popping-product-order? Just suck it up and pay it.
After that and for everyone else, let's continue.
Before you get all hot and bothered about the sweet price you found, take a cold shower, you need to remember a few things.
The prices listed on places like Alibaba are usually EX Factory or FOB prices.
EX Factory (exit factory) is the cost to make the item and dump it outside the factory. That's it. You've got to arrange everything the rest of the way.
FOB (free/freight on boat) includes production costs and the shipping to the nearest port, then everything else is on you.
Frankly speaking, these options are only for the big boys.
So those blood pumping prices you saw are missing quite a bit of extra costs (but may still be good).
Have you been looking into getting a freight forwarder?
If not then don't worry too much about all the shipping options.
There are a lot of them and they will not help you or be any cheaper, for now.
(If you have been looking into freight forwarders, I am about to blow your mind and save you a pile of cheddar. Click here.)
You want to be looking for suppliers that can do DDP shipping.
DDP (Delivered Duty Paid / Door to Door Price) is where you sit back and relax and let the seller handle everything from making the product to delivering it your door/storage/AMZ FBA warehouse, etc.
You will pay more for this convenience. We'll cover ways to hone out these pricey inefficiencies, but we're still kicking the tires on suppliers.
So you've got the main questions ready.
Time to get your shit together.
When making first contact with the supplier you need to keep in mind that, if you found a good one, they are getting a lot of requests.
If we did our recon correctly and found one with a great response time they will put the most energy into the first response to keep their stats high, but after that, they are not as obligated.
So the idea is flip the script during that first exchange so that afterwards they want respond quickly while taking the time to answer all your questions thoroughly.
How do we do that?
By showing them you are a serious buyer AND that you will be easy to work with.
Thats where all the prep work comes in clutch.
Everything we gathered together shows you're not just someone in a cubicle daydreaming of breaking out of the 9-5.
Like everything though it's how you show them this that will determine its effectiveness.
Most of the messages they get look something like these two:
1 "Do you have different colors?"
and
2 " To whom it may concern,
Hello I hope this finds you well. My name is John Smith and I am contacting you regarding your products. I run a business that sells similar items and I am hoping-zzzzzzzzzzzz"
So we won't be doing that.
Instead, we'll be using a 10/90 template.
10% will be the beginning of your message and 90% will be in an attachment if allowed or if not in an obvious separate section of your communication.
The 10%
This part is simple and effective by design and will serve as a template that you'll make your own:
Hi,
I would like some information for a test order of 5,000 pieces I want to place for a new item. I am looking into additional suppliers for my sunglasses brand business. Please see attached for information and details I need from you. If it looks good we can discuss samples and further details.
Thank you and let me know if you have any questions.
Best regards,
Stephen
[Position and contact info]
Simple, to the point, and frames everything to position you as a professional who knows what they want and isn't wasting time. At a glance they know the basics of what you're looking for, if they can help you, and the easy way to take the next step.
Never make it more complicated than this.
The 90%
The attachment can be a simple word file list of questions or you can go the extra mile and make a branded excel file.
This will do a couple of things for you.
It will streamline the process of contacting suppliers.
You saved yourself 90% of the effort it takes to contact new suppliers about a certain item.
Be sure to attach any art files and so on.
You'll stand out and make them think it would be stupid not to work with you.
Once you get used to this and really know what questions are important for you and your products, it's time to replicate.
You should begin to make folders for each of your regularly ordered products.
The question file, the art files, packing and packaging details, shipping requirements, everything.
Now you can drop everything that is important about your product, everything you need the supplier to tell you, right in an email in about 10 seconds.
Always do this.
On your attachment always include the following:
• Multiple ways to contact you
• If requesting DDP, tell them at least the closest major city to you
• Any testing requirements or product criteria. Examples being 'cruelty free' or 'vegan'.
• If you're not sure if your product requires any test for importing into your country or region, ask them if they cover any associated import tests in their price. For instance sunglasses require a pin drop test against their lenses before being imported into the USA.
• If you live outside the US and EU? Ask them if they have handled shipping to your region before. I am not saying if they have not, then drop them. But I am saying feel out their response. If they don't seem too confident, kindly but firmly press them on it to satisfy you.
.•.
Fishing (Part IV) -
Going in for the kill
Ok so we've caught some fish, thrown some back, and think we have some winners.
Time to decide which one you're going to have for dinner.
If we did all the work up to now correctly, then we should have disqualified most of our choices and are left with those who looked good and gave great responses to our questions.
It should also be at this point you have a very clear picture of what your profit margin will look like.
Only proceed if that margin really makes sense for you.
Actually, take 1-3% at least off just for 'shit happens', then if it still makes sense let's see how we can order some damn products already.
Let's cover some final items before we start cutting checks.
Samples
Never buy from anyone who refuses to provide samples.
They have them, they just don't want you to see them.
These days, especially if on Alibaba, suppliers will want you to pay for your samples. Not only pay for them, but they're usually at a stiff price.
One, to cover shipping and effort.
Two, because they can and usually get away with it.
When first starting out with a supplier, you'll probably be paying for them. After you have a couple of orders together you can revisit the issue.
What you should do though is get them to agree to credit the entire cost of the sample to your order balance if you end up placing an order.
These are the two most important samples to make sure you get ahold of.
PP Sample (Pre-Production)
This is the approval sample you'll receive to make sure all is good to go for going into full production. It is the last chance to make any changes or catch any problems before it is too late.
Crucial.
TOP Sample (Top of Production)
This is one of the first of the finished product from the factory line. This is so you have a copy of the completed item. You'll want this for marketing purposes (selling to other retailers, photos for ecom, etc)
Payment Terms
At first there will be little choice in this.
After you start seeing successful orders you can begin negotiating terms with suppliers.
Obviously everyone wants to pay as little up front and as late as possible, so you have to be realistic about when and how you ask.
Most importantly though you need to give them a reason to want to say yes.
Have you been doing consistent business with them recently?
Then better terms may allow you to make an additional reoccurring order.
Ordering different styles from them?
Better terms would make for another variant you could sell at a higher price and reinvest.
Play around with different ideas, but have it make sense for them to want you to have more cash on hand.
The first-term milestone you want to be working towards is 30% down and 70% to ship.
From there it is about building the relationship between you and the supplier.
P.S.
A lot of questions came in about approvals. I'll break down my general stance:
The more complicated the item the more approvals there should be.
Especially the higher ticket you get, the easier this becomes for suppliers to agree to.
Also, it has to be said, if you're putting in your life's savings on an order, better damn sure to fight for approvals.
What I mean by all that is get images and videos (approval samples have been mentioned above) at least of samples of different parts of the product before it all goes into full production.
See what the packaging will look like finished.
See how your art actually looks printed on the hoodie.
So on and so on.
.•.
Trust but verify.
There is one more thing you can do when deciding to place your order.
Hire someone to inspect your products before they ship.
Everyone has seen the memes of 'This is what I ordered, this is what I got', and they are no joke.
This will all depend on your budget and level of trust and risk.
I always advise paying for inspection when starting orders with a new supplier. It is not offensive, they know it's part of the game.
There are plenty of options out there, do some searching, reach out to a few, find out how to work with them, and go from there.
It is pretty straightforward.
They offer many different services from factory inspection to going through your inventory to be shipped at the port.
It is a huge pain in the ass to wait all the time for the goods to arrive only to find out the label is wrong or worse.
Then you have to pay the expensive shipment back for the factory to take a look.
And all this time you are not selling.
So you can see why it can be worth the money to have eyes on your products before you pay the balance and have them sent around the globe.
After you begin to make consistent orders and come to know your supplier's commitment to quality, you may choose to stop inspection on every shipment.
However I will say that if you are fulfilling purchase orders or supplying large quantity of units per sale to retailers, etc?
Always do this and include the cost in your price.
P.S.
You may have a supplier suggest or even demand that a certain inspection company be used to check your goods on all orders.
Look, kickbacks are a common thing and not necessarily looked down on in China. Nine times out of ten, the suggested company is on the take and will always side with the supplier, leaving you even worse off if there is ever a problem.
Find out why that is their policy, but just be ready to move on because there are extremely few reasons you should ever agree to this.
Buyer be warned.
Well ladies and gents...
The time has come.
You've found a lot of good suppliers for your product.
Vetted them, kept only the great ones.
Contacted them to make sure you'll be getting exactly what you want and the way you want it.
Haggled all the details and arranged production and delivery.
You might have arranged for a third party to inspect your goods before shipment to make sure everyone is honest and protect your investment.
That all makes for a short paragraph but I am sure it seemed like a long time and a lot of work.
And it probably was!
Like I said at the beginning, this stuff is simple, not always easy.
But you made it and I am proud of you.
The only thing left is to wait.
Wait and receive your products and make sure they're as damned good as you envisioned.
Then you sell like hell (this is the part where you come in).
My last bit of advice is if your goods arrive and they aren't perfect.
First, this has to be said: If you receive your order and have already paid the balance on it, then it doesn't really matter what the problem is, it's 99% certain you won't be helped.
The company is halfway around the world and no one else cares.
It's harsh, but that is the truth.
That's why it is is so important you do your prep work and take the steps to protect yourself.
If there are a few damaged units:
Honestly, expect this to happen from time to time. Do a thorough inventory, take pictures, and inform the supplier to see what can be done.
Typically the damaged amount is less than 2% and it won't be something the supplier will replace, but they may refund or more likely credit you on your next order. Keep records of any agreement like this and be sure to bring it up on the next order.
If the shipment is fucked:
This is when it's not a few items but a quarter or more of the order is wrong, damaged, missing, or otherwise unsellable.
Immediately contact supplier, document everything, and tell them you wanted to alert them and see what can be done before you involved the platform or any other such party.
If you did everything right up until now, you should be able to resolve this with as little pain as can be given the situation.
P.S.
Got a lot of questions about how to avoid shipments getting screwed.
Listen, there is no 100% way to ensure all will go perfectly. Sorry.
That being said you can really stitch these by engaging a good agent. (and I'm not just saying that because I do this.)
One of the major benefits of working with an agent is they have better payment terms than you will.
For example, most agents have 30 day payment terms. Meaning that the balance on the goods does not have to be paid until 30 days after you receive the products.
This is the best way to protect yourself against any shipment or production irregularities or accidents.
.•.
Name your price.
You're getting the hang of this thing now.
Confidence comes with making this process work and you start to build up steam. You also begin to really hone in on your product knowledge. You've been haggling it with the suppliers for some time by now.
Time speed this up while also get you better pricing. I'm going to share with you one of the best tools you're going to use in vetting, designing, and negotiating.
Target price.
This is something you'll want to add to your product's file sheet after a while and something as you gain experience you'll want to include in initial inquiries.
You should have a very good idea of the costing on your items and what you want to work towards in terms of your profit margins.
The best way to start achieving these target prices is not to try and bottom-line-take-it-or-leave-it.
They will leave it.
Instead, put the work on them.
"I see your pricing is at $7/per piece. Our target is $6.10, what can be done to lower to our target?"
You will be surprised what happens and how large amounts can fall off, just by asking professionally what can we do.
It may involve increasing order size, dropping a color variant, tweaking packaging, etc.
But you want to make them a part of the solution, not an adversary to bludgeon money out of.
It is too common for both brand owners and suppliers to work in simple YES/NO questions and answers.
Always ask your suppliers for options, options, options.
Review, revise, redo.
This is what seperates launching a good brand to a successful one.
The difference between your own business and a growing one.
You must set aside time to review the state of each of your main products.
Not when you 'need to'. All the time.
The schedule will be different for each company. My general rule of thumb is the longer the product lead time, the more often you should be reviewing your product.
The longer the lead time, the more serious when there is a problem because of how long it takes to correct or replace. Best to best on top of those things.
This may mean every week or it may mean every month.
Now when I say review, I do not mean you have to go back to scratch.
Remember that sheet you made when you were contacting suppliers, from the 10/90 Method? We're going to be getting extra mileage out of it.
It serves as a great review method for your team since it is all the important stuff for your item.
So pull that sucker out and take a quick run through.
Is the supplier meeting all the production needs?
Are you happy with all extras? (Packaging, inserts, etc)
Is the art still on brand or have you started in a different direction and this item needs to be updated?
Do you want to make a variant?
Spend just a couple of minutes making sure the item is healthy and you'll be surprised what new ideas spring up from just looking at this sheet again.
You can expand this process to bring in other elements or include them in existing processes.
Do you have an inventory meeting? It's also a great time to review the relationship with the supplier and how they're delivering on the item.
Doing new product development? Perfect time to review how the new items will fit in your current brand line.
It is in this way brand, team, the company will become more efficient. You'll have a repeatable system that everyone will come to know and follow.
And if shit ever hits the fan? You've recently been flexing that muscle, not wondering what to even ask a new supplier.
.•.
How to hone your craft.
So you got some products.
Sold them.
And you're back for more.
Good.
I am going to cover some things you can do to take your sourcing and your brand's products to the next level.
There are many paths up the mountain, I am going to point you towards a few.
Some of these will not apply to your business.
Others will help you double, triple, your profits or more.
Freight forwarding
We discussed how expensive shipping using places like Alibaba can be.
But why?
Well they ain't Amazon. They don't have some centralized shipping locations or a fleet of parcel workers.
If you order from three different suppliers, that's three separate shipments, and plenty added on to cover the wildly changing shipping prices.
Not too efficient.
Freight forwarders help solve this problem. Their whole deal is specializing in coordinating your shipments together for lower shipping prices and smoother delivery.
The catch?
This only starts making sense when you are moving some serious freight.
Dropshippers and small batches need not apply.
Customs Agents
If you ever had a shipment held for inspection or stopped until you filled out a whole new set of paperwork to get released...then you know how much that hurt.
Customs agents are there to make sure you don't feel that again. They know all the new procedures and filing requirements to get through customs the quickest and avoid any mistakes that can lead to your shipments being held for inspection or worse have them confiscated.
Offshore storage & raw materials purchase
After you can no longer stuff your garage and closets with your products, you have to find a place to store your inventory.
Warehousing can be expensive (we know, we run that too).
If you have a consistent inventory you can look into securing storage in the country of your good's production.
You want to get really geeky about it you can work with your supplier to purchase the raw materials to produce your goods at a cheaper time of year.
This lets you reduce you're overall costs of your brand line by cutting production costs and storage fees.
Simply watch your sales trends and ship additional inventory from your foreign storage and then produce new replacement inventory.
Include your supplier in your product development process
After you establish your relationship and you like their work, it is time to have the supplier really start working for you.
Planning a new product launch?
Run it by them and see what extras they'll throw in at a discount or for free. Special packaging, promotional inserts, etc.
Planning a lot of holiday variants?
Discuss this before the holidays and get special treatment on variant numbers and such.
The idea is leverage your working relationship to upgrade your entire brand over time.
.•.
Make them want you.
Some of the smarter readers among you may have noticed a theme running through this:
Process = Profits
When you started out, your knees were wobbly and a lot of money fell out along the way.
As you continue to find, vet, and work with more suppliers, the more efficient you will be. The more efficient you are the better products you can get for lower pricing, which means you can grow your profit margins even fatter.
Pretty soon you'll be scooping up money in both hands.
You'll notice something else along the way too.
Suppliers will want to work with you and eventually you'll have suppliers consistently contacting you, begging to make your products.
Now for the grand finale...
To begin, thank you for buying this guide.
Hemmingway once said that "writing is easy. You just sit at your typewriter and bleed." Well, I don't know if this would be considered writing but I certainly bled for this.
It means a lot that my years of studying, practicing, mistakes, and triumphs made into this run down sounded like it would help you enough to take a leap.
Typically sourcing and production are a behind the scenes and sometimes thankless jobs, so I'll get asked why I do it.
For a long time, I did not have a great answer.
You have trouble telling people that you quit your job and are in it for the money to pay your bills.
But as I gained more success, started my own agency, and chose clients I was excited to work with?
I came on my answer: I like helping people do the impossible. I get to make people's dreams become reality, literally.
When you see your clients grow, take on more employees, open new locations, launch new brands, you know that means a whole lot of lives are better with all the beautiful things you helped build and share with the world.
When I work for those clients, I'd eat a fistful of glass for them.
So if you ever need help building great things to share with the world, don't hesitate to give me a call.
That being said, I truly believe anyone who reads this and works to apply the lessons will find success.
Take what you've learned, your hard earned experience, your grit, and don't stop until you're proud.
The shortest goodbye is the best, so adieu for now.
There will be more to come.
Until then, give 'em Hell.
Best,
Stephen Bivens
Partner at SB&P
Coming in hot from 2021.
Holy shit what a year.
By now your brand is either dead, dying, for bringing in money like it beat up a leprechaun.
If it died, maybe you didn't get here quick enough, lets see if we can raise it from the ashes. For the rest of you, I am going to take the lessons and winning moves we played for our clients and boil it down to fit this format we have going.
You'll need to take this to heart because, despite what all the politicians say otherwise, 2022 ain't getting better any time soon and we actually have to earn a living.
So without further ado, we're adding bonus content to get ready for next year. Everything in the above guide still applies, in fact, it's more important than ever, but I am going to add some points that everyone can apply to their brand.
Start your product development yesterday and don't stop.
We're going to get the big one out of the way. The most over looked part of every brand line.
Your product development process. I've changed businesses with this one lesson.
Most brands think of making money something like this
This is typically what most people in a company think about when it comes to their brand.
If you have a specialized job, maybe buyer or logistics specialist (or read my How to source products like it is your damn job guide) it might look something more like this:
This is getting better. This is what the majority of profitable businesses knew before the global lockdowns and logistics crisis.
That is why many of them are out of business now.
When their normal factory couldn't meet their needs, many reasons we won't go into here, they were screwed.
They did not have back ups and most didn't know the first thing about finding one.
Those that did had a weak system, weak product development and sourcing.
So they did not stand out or were not fast enough to beat out the stronger companies.
It is not as simple as emailing some designs and wiring some funds.
Especially now.
You need something like this
This isn't just a timeline of how a product is made, it is the playbook of what you need to be doing.
You need to be dedicating work day hours to thinking about your brand, it's new products, and how to get them ASAP.
What a load of ships.
Ok, I'll admit I couldn't think of a good ship pun and settled.
Listen, here's the bad news: You can't do anything to clear the ports.
They will not be unclogged any time soon.
What you can do is make getting there like greased lightning.
Let me break down what is going on over there.
So the shipping containers, and space in them, are sold to get on a ship.
The prices of those containers have skyrocketed during this thing.
They change prices every day.
Up. Down.
It's like a fish market.
Now what most suppliers are doing is quoting you a price that includes this.
They don't want to come to you on the day of shipping and tell you they need more money and they do not want to cut into their profits.
So they wait for the price to drop. This may take some time.
I have seen someone wait two months in port to get loaded onto a boat.
How much would a two month delay cost you?
Just to get loaded!
So here's what you need to do ASAP.
Get in contact with your supplier if they handle delivery or your freight forwarder.
Discuss with them their policy on this and work out a plan that fits your needs.
I have seen some companies take this on by individual order even.
Working out which items and shipments simply cannot wait and budget out extra funds just in case they need to get things loaded.
Some shipments are not as crucial and can afford to wait around for cheaper shipping.
Now more than ever you need to be able to time your shipments as accurately as possible.
So reach out to the people moving your goods and discuss.
Burdens shared.
It is time to better secure our suppliers.
It is about to be 2022 and even people with long relationships are getting dropped on account of China energy saving laws, high order volumes take capacity, and a general ass kicking the the shipping sector has taken.
Obviously the best way is to make bigger orders more often (so sell more).
But that is outside the scope of this sourcing guide and may take time, so what can you start doing right now?
You can have your supplier do your work. I don't mean hire them.
I mean have them share your burdens.
You won't present it like that and if you do it right they won't see it that way, but that will be one of the benefits for you.
The others could mean preferential treatment, access to new stuff first, cheaper pricing, and just an overall more solid relationship with your supplier that will begin to be closer to a partnership than a simple transaction process.
As always, you'll be using the following as a template.
Build, break, build.
Start out small using this build, break, build routine.
Something good they did, something you want changed or better, ask for directed but open ended options.
Example: "The new sock designs look great, they are selling very well. We're currently planning the details of placing a new order of them with you. We have an issue though, the packaging isn't as secure and sometimes the socks fall out. We don't want our customers to think they're cheap. Do you have any ideas or options we can do to fix this and keep the cost the same?"
There is a deceptive amount of information included in that short email. It is all designed to start turn the dynamic from
A) You doing all the work to design your product, then paying the supplier to execute.
to
B) Leveraging your supplier's industry knowledge and capabilities to inform you on how to improve your product.
This also starts to establish a relationship where you establish a few reasons for them to want to help you.
One, you're planning future orders, they want that.
Two, you politely cast doubt on their service to you with a problem in the item, they'll want you to be happy with the work.
Let's make this a regular thing.
Now we're going to take this blossoming relationship to the next level. Before you were involving them in one aspect of an item or something similarly small.
Now we're going to set a regular check in time. This will depend on the frequency of your orders, the variety of product they are making for you, and so on.
You don't want to come off as a needy weirdo or spam them with useless platitudes.
So instead you'll always attach it to a matter of business you could be speaking to them about anyway. Imagine them as a different department in your business instead of a separate entity.
This may be before a big order, every quarter, when starting a new entry into seasonal items, you get the idea.
But you want to do this before you are setting orders for these.
Example: In the middle of summer you'll want to check in with them about your plans for Q4/Christmas and let them help you craft your strategy.
"Hey we were in the planning stages of our Christmas sock variants we will order from you for later this year. Do you have any suggestions of popular patterns you could do for us or any new items you've recently developed?
We're also looking to add a couple of holiday variants to our normal ankle socks, how many can we add without increasing our price or usual order size?"
Let them help you build and guide your order details.
You don't have to follow everything they say, but by including them in these orders and building a collaboration, you have them invest in your success.
This drastically lowers the likelihood it'll be you that gets cut when the factory starts reaching capacity.