How to work with your suppliers during uncertain times

How to work with your suppliers during uncertain times

Industry experts share business strategies on how importers can source wisely amidst the global pandemic.

Sourcing never stops – not even a global pandemic can cease worldwide trade. Businesses are slowly  adapting to the situation – this includes importers and suppliers. During the Global Sources Virtual Summit in April, eCommerce experts Gary Huang, Margaret Jolly, Sajag Agarwal and Sophie Mao gave valuable advice to buyers who are sourcing during these uncertain times. Here are five key takeaways from the panelists:


  1. Get in touch with suppliers ASAP – As early as right now, buyers who want to get ahead of their competitors need to message their suppliers to discuss product development ideas and business terms for Q4 and beyond. Constant communication and updates help get business moving. Getting to know the suppliers and building genuine rapport is also essential in the process. eCommerce seller and coach Margaret Jolly says that once full production capacity is back, manufacturers will get larger amounts of email from other buyers. Gary Huang, founder of the 7 Figure Seller Summit, adds that Chinese factories are eager to do business right now. Hence, contacting them today is a smart move. In this case, “the early buyer catches the worm.”


  1. Place high importance on QUALITY – Due to social distancing, a lot of companies have cut down on their QC steps, as noted by Sajag Agarwal, CEO and founder of Movley. For instance, what was once a five-step process could have gone down to two. As a result, visual, technical, and chemical defects in products can arise. It is important for buyers to establish more thorough product inspections before or during shipment. Having larger sample sizes, setting up tighter acceptable quality limits, researching reviews and doing more thorough product and function tests can aid buyers in spotting quality problems. ISO-certified companies have a more efficient and productive manufacturing process with fewer errors compared to the ones that don’t.


Huang also suggests hiring a QC inspection agency that can better test products beyond visual inspection, as some errors could be under the hood. Withholding payment terms can be done as well, until the factory agrees to fix any product issues. This upholds the quality standards of the products.


  1. Work with bigger, more STABLE suppliers – Partnering with more established suppliers can protect buyers from possible risks in payment and even bankruptcy. Bigger factories, according to Huang, are more stable. They have a greater risk tolerance and are least likely to shut down. They also have more employees compared to smaller factories, which have at stake when they lose workers, hence affecting the production.


  1. Stay in touch with suppliers to GAUGE RISKS – Asking the factory’s situation, working condition and the number of employees can help buyers assess where their suppliers stand. For instance, if a factory is hiring new workers or is losing workers, then one can expect a lower production capacity on the supplier side. Agarwal mentions that a lot of companies have shifted to manufacturing medical supplies because of the high demand. Importers should bear this in mind if they are sourcing non-medical supplies, since their supplier’s product focus may have shifted. A longer lead time may be expected.


  1. Do DUE DILLIGENCE – It is important to enforce proper contracts, research diligently about the suppliers if they are still active and look for red flags, as one of the first lines of defense in today’s sourcing field. Buyers also need to make sure they are dealing with legal factories to avoid working with companies that suddenly close. China Law’s Sophie Mao stresses these points.


Aside from the five main things buyers must do, the speakers mentioned a few things to note when sourcing during these times:


  1. Expect longer lead times – This might mean two to four weeks longer than usual. Not all factories providing the raw materials may be back in production. They may also be hiring new workers and are practicing social distancing. These situations can all slow down the manufacturing process.


  1. No large orders just yet – This is to limit risks if buyers are working with new suppliers.


  1. Import from Verified Suppliers on Global Sources – Buyers need to be careful with sourcing from suppliers that aren’t referred by Global Sources or by other reputable persons, as they can end up dealing with local traders instead of export traders. Hence, it’s best to source from authenticated suppliers.

When asked about where they see the China manufacturers within a year or so, Huang says that the situation will depend on the global recovery. China’s factories, however, are too big to fail. China is still going up the value ladder thanks to their focus on releasing high-tech products, including Artificial Intelligence.


For the complete scoop on the panel’s discussion, watch the FULL VIDEO HERE.


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