China Sourcing Company

The specific strategies for importers

For businesses interested in buying products from Asia, several options exist:

  • Attempt to directly source from their home base
  • Open a fully-owned buying office locally
  • Work with a Trader
  • Work with a Procurement Service Provider (PSP)
  • Each option can be evaluated through the following criteria: Transparency, Cost, Flexibility, Quality, Lead-time, Human resources, Sourcing efficiency.
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By sourcing directly from your home base you have a totally transparent solution: you know the suppliers, the market price, and you have a complete control of your purchasing strategy. Using your own team may seem as well to be the simplest solution to implement, providing you can find the right skills internally. But the quality risks are the highest of all options. Communications very often lead to a misunderstanding in the technical specifications at the start of the project, and to non-conformity of the final production. Without a team locally to help you deal with these issues it might end up in a financial loss. On the cost side beside the obvious quality costs you should add several direct spends: human resources you dedicate to this task, travels (flights, hotels, time), cost of a third party service to control goods before shipping. And you should consider the sourcing efficiency: finding the appropriate price for a product requires local market knowledge, sourcing time, frequent fair visits, local negotiations, etc..

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Sourcing through a fully owned buying office is a safe way to deal with quality issues and suppliers management. You might achieve as well with a dedicated team an efficient sourcing, if your team can benchmark several countries. The main cons of an internal office are the costs and human resources issues it brings along. As for the cost it is frequently evaluated that seeing the fixed costs of a local structure, a company should consider this option above 20 million USD purchasing in a country. The human resources can be as well challenging issues: high staff turnover in emerging countries, corruption, lack of skills, cultural problems are amongst the main concerns.

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Work with a Purchasing Service Provider will generally not be an option anymore if a company has purchasing volumes of above 20 million USD in a country, except if the company want to remain flexible, do not wish to deal with human resources issues, or want to profit from the expertise of a specialist. But below that amount it will be the most efficient solution to:

  • Achieve savings: get the right price through market knowledge, volume aggregation across multiple clients and global benchmark in several countries.
  • Secure the quality: have an onsite team to explain clearly in a local language the technical specifications, and carry out systematic quality controls during production and before container loading.
  • Reduce overheads: PSP’s deliver rapid results without adding fixed costs, infrastructure, people and all the attendant risks
  • Improve quotations cycle times: Experienced agents use extensive sourcing databases, RFQs methodology to deal quickly and efficiently with your requests.
More information about Procurement Service Providers


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