While the internet has improved our ability to connect across borders and time zones, there are still considerations to be taken when looking to source products from other countries. It is true that using the internet is easy and convenient, but there can also be a significant investment of time and resources to complete necessary sourcing activities online. It's paramount for any business considering this route to understand the realities of using an internet based global sourcing strategy. While not a comprehensive list, these items can provide a clear direction if your business is considering manufacturing or sourcing products from overseas via the internet.
#1: Does Your Product Require Engineering or Product Design Work?
If you are sourcing a simple product, it can be easier to use the internet to dig through the thousands of global suppliers and find options that are suitable. The more your product requires engineering or product design work, the more manufacturing complexity is a necessity to the process. Some factories may not be able to take on a higher level of complexity; however, you may not know until time is spent discussing the specifications with them and vetting that they can do the work. While the internet can be a good place to start for complex products, additional follow-up is required to ensure the supplier is right for your business.
#2: Does Your Product Require Testing Certifications?
If the product will be sold for use in the United States or countries in the European Union, there are often product quality and compliance regulations that must be met. Due to these regulations, a sourcing strategy implemented via the internet must be meticulous and stringent in the types of manufacturing partners considered. The supplier must be able to produce to the US or EU standards, and also provide documentation of their compliance. Overall it is the buyer's responsibility to ensure their supplier has met the required product standards, as the buyer will be responsible for importing it into the country of final sale.
#3: Do You Need to Have a Direct Representative at the Factory?
In your business will it be necessary to have a direct representative meet with the factory in person? If not, this is an excellent way to save money in travel costs and save time by using the internet to find adequate suppliers. It's still important to complete proper vetting of the suppliers, but will be much easier to do without the added expense and effort of sending a direct representative.
#4: Are Small Differences and Variances in Your Product Acceptable?
Some products can accept higher tolerances of variability, while others must be manufactured in the exact same manner and to precise specifications. It will be important to understand where your product fits in this spectrum, as that will influence how valuable using the internet can be for sourcing your product. If small variances are acceptable, it will be easier to select a suitable supplier based on internet research as you will not need to scrutinize the manufacturing processes and equipment as tightly. If small variances are not acceptable, using the internet to source a supplier is still possible. The caveat is that it will be important to ensure the quality control at the factory is extremely tight. It is also recommended that your company has a representative on-site or hires a third party inspection service.
Ultimately, using the internet as a sourcing tool is a powerful time saver and can eliminate costs from traveling to manufacturing sites. It is important to have a good grasp on the attributes of your product in order to optimally use the internet in sourcing products. The key questions outlined in this article can assist you in determining how far to take your internet search, and what types of questions to ask of potential suppliers that you find on the web.