5 Common Product Sourcing or Product Procurement Errors

China Factory Wood Working

Tips To Help You Procure and Import Products From Overseas.

It cannot be easy to source new suppliers and new products.  Mondoro has sourced many products in many countries throughout our many years in operation.  And with that product sourcing, we have also learned a lot of costly, complicated, and complex lessons.

Some of the 5 most common product sourcing or procurement errors we have found include, if it looks too good to be true, it probably is, or a supplier is trying to reel us in with a catch and bait kind of pricing scheme, or not understanding what the vendor can do for us, or the vendors expecting more orders and quantities than we can give them and not properly vetting the vendor and who they are are and are capable of manufacturing.

Here are some common sourcing errors that we consistently see:

If It Looks Too Good To Be True, It Probably Is.

Many manufacturers, especially those manufacturing furniture and home décor products, may have beautiful photos on their websites.  Many will take a photo that is either a stock photo or takes someone else’s photo and passes it off as their production.    If the photos are so beautiful, so well set up, and of such high quality that it looks too good to be true – it probably is.

We have also had vendors give us catalogs and other marketing materials, and unknown to us, the vendor had used someone else’s photos or pulled photos from the internet. I know it can be hard to have a lot of samples in-house. It is costly, but if they tell you they can produce solid wood furniture but have never done any solid wood production, there is a huge problem.

The only way you can really know if they can do what you need them to do is to visit them. If you live in the United States, making these trips can be very costly. That is why, especially in our industry, having a partner as a reliable agent on the ground that you can trust is essential. You can see so much on a factory floor that you will never see in a catalog or just by photos alone.

Catch and Bait Pricing

Many suppliers will post prices so cheap to get your attention.   The costs many times are way below even the actual material costs.  This is a catch and bait scheme where they want you to contact them because of the low price, though they never intend to produce at that price. 

I see this a lot on Alibaba, where suppliers say that a large lacquer bowl is about 1 USD. Sometimes even my clients will look at that and think our price is too high as on Alibaba; someone is posting the price as 1 USD. But there is no way they can sell the bowl for that price. It is way below the cost of the materials.

This kind of pricing is a kind of catch and bait scheme. They hope that you will contact them, and then they will turn around and give you the actual price. I honestly find this kind of game a complete waste of my time.

This is also why you must know about the price for an item or what it should be for an item. Then you do not waste your time with these kinds of catch and bait game players whose only thought is how do I get you to contact me.

Not Properly Vetting the Vendor

Before we work with a new vendor, we will always go to see them. This may not be possible for many of you as this takes a lot of time and money, so if you cannot do this yourself, get yourself a reliable agent or partner on the ground to help you. 

Going to see someone and their production or other abilities is very important. You can always see a lot on the factory floor or in the showrooms that you would never see by email or online.

Also, relationships are significant in Asia, so take the time to see someone face to face and get to know them. When you need help, they will be more likely to help you.

Order Quantities Disparity

One of the most significant sourcing errors is that many people try to work with huge factories, and they talk them into minimal quantity orders.  They often do this on the promise that larger orders are “just around the corner.” These vendors will figure this out very quickly and often refuse to do the order or will do the order but push production back so far that goods are always late, or they will ask for large price increases.   Long term, this is not a good sourcing situation.

Years ago, when I was in the shoe business, I had a customer who would go into the factory and tell the factory that he would place an order for 100,000 pairs of this shoe. He would bargain hard on the price for the 100,000 pairs price. When the actual order came, the order was only 10,000 pairs or even less. The vendors were, of course, not happy, and the next time he came around, they did not have time for him. This kind of game does not build any trust with the supplier and hurts the relationship, usually to the point that the supplier will refuse to work with you again.

As Tom Peter, the author of the book Seach for Excellence, defined the formula for success:

“Formula for success: under promise and over deliver.

Tom Peters

Not Fully Understanding Vendors Capabilities.

To work well with any vendor, you must fully understand their capabilities.   In our design-driven industry, we need to push vendors to do something unique that no one else has.  It is always a very fine line between success and failure.  Not every vendor can or wants to do this kind of production to fully understand your vendor’s capabilities to have a perfect fit between quality and production. 

This is also another reason why having a reliable partner or agent can make all the difference between success and failure in product sourcing. Many feel well why do I want a middle man? Well, if that middleman or woman is doing their job, then they are the ones that are helping you to be able to produce the quality and level of products that you need at the designs you need them.

Many think that sourcing products are effortless. All you need to do is go online and then find a supplier. But the truth is much different than that. Finding a really good vendor or supplier, especially in Asia, can be very difficult. It also takes time, money, hard work, and effort.

If you are interested in finding out more about how we can help you create, develop, and manufacture home decor and home furniture products in Asia, we would love to hear from you. Feel free to contact Mondoro and Anita by clicking here.

What are the risks in procurement and product sourcing?

There are many risks associated with the procurement and sourcing of a product, especially a product from overseas. One of them is that the product will not be of the quality you require. The other risks would be fraud, costs, and delivery risks. If you have a good partner or agent helping you, all of these risks can be mitigated.

What is the procurement or product sourcing process?

The process of procuring or product sourcing is purchasing goods or services from an outside source. This requires that you find or source the product, then agree on a price and delivery terms. The outside supplier will then manufacture or supply the goods and services at the agreed time and place.

Anita Hummel

Hi, I am Anita Hummel. I am the President of Mondoro. I am passionate about helping you CREATE, DEVELOP, and MANUFACTURE home decor and home furnishing products. I am also an avid blogger with a love of travel and riding my motorcycle around the streets of Hanoi, Vietnam.

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