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Sourcing Inventory for Business: Top 3 Questions Answered

#Sourcing
Tim Editorial Zilingo
June 06, 2020
Though sourcing is without a doubt a fundamental aspect in any sort of business, perhaps nowhere is this more true than in the world of retail. This is because sourcing can best be defined as a crucial balancing act- -you want to be able to buy raw materials at a cheaper price in order to boost your profits, but you also want material that you’re sure can hold up to your customer’s standards.
Considering the many nuances involved in sourcing, it follows that wholesalers, retailers, merchants and entrepreneurs have a wide range of questions, especially when starting out and first learning how to manage relationships with suppliers. Below is a closer look at some of the most frequently asked sourcing-related questions and how your business can engage Zilingo Trade as your one-stop sourcing destination.
1. What should I consider when finding a manufacturer?
It’s an all too frequent scenario: a budding business carries with it the right vision and ideas, but hits a brick wall when it comes to the rigorous logistics of actually making the product they have in mind. Compounding the problem is the fact that there is now a vastly overwhelming number of potential suppliers all over the world competing for your attention.
There are a number of factors to consider when narrowing your options down. Am I willing to endure longer shipping time for lower costs? Is there a marketing appeal to be had in sourcing from particular countries (ex: “Authentic from Thailand”)? Can I easily verify this manufacturer?
For a long time running, Asia has been the world’s number one manufacturing hub for the reason that they simply have lower manufacturing costs. Though this once automatically meant China, other countries are now becoming more attractive as low-cost manufacturing hubs. In fact, 68% of companies are now exploring new sourcing regions, with India and Southeast Asian countries like Indonesia and Vietnam gaining special attention in particular.
Though rising costs of doing business in China is one of the main reasons companies are now shifting away from there, events such as trade wars and its subsequent tariffs have contributed substantially to this diversification of sources. Thus, it’s advisable to keep in mind manufacturers from alternative countries such as those mentioned above.
Once you’ve decided where to source manufacturers from, there’s still a few more things to consider. First, how responsive are they? A sourcing partner who readily emails back builds the foundation for a much easier working relationship (more on that down below). It should also be clear who your main contact person will be, as well as their capacity to relay your needs to their team.
Second, how committed are they to providing high-quality products? Check if your prospective partner measures up to internationally recognized standards like the ISO 9001. Working with an ISO-certified manufacturer ensures that their quality management, resource management and product realization systems have all been checked by a neutral third-party. ‘
Third, substantiate the financial capacity of your suppliers. This can be accomplished by asking for figures not only on profit in the past years, but also asking about any financial issues they may have had in the past.
Finally, are your supplier’s production methods ethical? Is their work environment friendly for their employees? You don’t want to associate with a partner that doesn’t value their talent- -and more often than not, how they treat their employees is a reflection of how they’ll treat you.
2. How do I build a good supplier relationship?
As with any relationship, interacting with your supplier is a two-way street.
For the best results, do ensure that your suppliers are given ample lead time. The best way to do this is to understand exactly how they go about their manufacturing. Furthermore, be clear from the onset about what your expectations are. If there’s a possibility of further changes, be prompt in relaying the relevant information.
Speaking of information, even sharing things like the names of your key personnel, product launches and your brand’s promos can help to personalize the relationship between both parties. Also, be clear about the terms of your payment. Delayed, incomplete and missing payments can quickly squander all the goodwill you’ve built as it sends a message that you don’t value their hard work. Make it easier by deciding on one, singular platform by which all communication will go through. This will go a long way towards avoiding any miscommunications, and can surely open the door for additional opportunities.
Creating an atmosphere of transparency and connectedness promotes trust and increases motivation between both parties. Being transparent can even foster professional growth by encouraging the sharing of ideas and practices, a definite asset for growing your brand.
3. How do I secure my sourcing in the digital age?
Sourcing isn’t exempt from the tidal shifts brought upon by the digital age. In fact, ongoing digitalization is predicted to be one of the most relevant trends for sourcing in 2020. The most important tools for businesses will most likely be the ones targeting tracking, spend analytics and risk management.
Yet there is also a challenge to the ongoing digitization. According to a study done by Opus and Ponemon Institute, as many as 59% of organizations have experienced a cyber attack through a third-party company. Perhaps more troubling however, is that only 16% of organizations reported taking the proper steps to minimize security risks from third-party partners. Security breaches such as these can cost your business a massive amount of money.
Of course, the good news is that committing to secure practices is all it takes to weather the potential cybersecurity risks. Deploying a thorough assessment of the security measures employed by any outside company you work with (do they use any computer security software? Are their employees trained in confidentiality?) can prevent major problems down the line.
How Zilingo Trade can help
Having a global view of your potential manufacturers is crucial in determining the best option for your business. Fortunately, Zilingo Trade offers up to 4000+ hassle-free manufacturers with low prices across a diversity of countries and regions: the USA, Thailand, Indonesia, Vietnam, Australia, Europe and the Middle East among many others. Aside from ensuring that our clients are never limited to a single corner of the world, the abundance of places Zilingo Trade operates in also shields them from any disruptive geopolitical event (trade wars, outbreaks, etc).
Additionally, Zilingo Factory Softwares can contribute to transparency and connectedness by way of real-time data analytics. How this works is that line managers in the factory can easily report errors in the production line by way of an easy-to-use design interface. Zilingo Factory Software then crunches all the data on the factory’s performance and breaks it down into insights that factory owners can access on their phone, from anywhere in the world.
Zilingo Trade has a proven track record working with multiple businesses in the Asia region. Brands such as 2nd Red jeans and Shafco have all taken advantage of Zilingo Trade’s friendly interface and amiable manufacturers to elevate their businesses. Manufacturers like Tex India and Harapan Kurnia Textile can attest to the pleasure of working with Zilingo.
Finally, the downloadable Zilingo Trade app promises a secure and easy payment system. Payments can even be made from anywhere in the world at any time through major credit cards such as Visa and Mastercard. There’s even a generous Buy Now, Pay Later option for businesses. Meanwhile, a quote on how much an order costs can be done in just a few easy clicks on the Zilingo Trade website.
Tim Editorial Zilingo
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