Sourcing is the latest buzzword in the manufacturing and the supply chain. As the business environment is becoming more and more competitive, companies are trying to maximize their gains by sourcing raw materials or finalized products from cheaper destinations. As per the findings of Harvard Business Review and other research publications, certain countries have an inherent advantage in succeeding in particular industries. This is why more and more cost and quality conscious businesses all over the world are turning to overseas sourcing.
However, international sourcing is also a risky maneuver as a lot of your money is at stake. You are not physically present at the location and your money is in a foreign land so you do not have full control over the process. At BlinkGlobal, we help our clients get the best solutions when sourcing from overseas. In this article, our experts share 5 mistakes that you must avoid when sourcing from overseas.
1. Choosing Vendors Without Research
Right vendor selection is the most crucial decision that you need to make when sourcing from overseas. The most important factor to consider when selecting suppliers is to first make sure that they are able to provide what your business actually needs, rather than randomly selecting suppliers who just want to sell.
A good way to get a reliable supplier is by seeking recommendations from your business acquaintances or you can also look for online reviews about different suppliers. Suppliers also have certain rules and requirements like minimum quantity and advance payment. Be an informed consumer and ask important questions like shipping time frame and shipping charges as well as legal requirements such as taxes and duties.
2. Paying Everything Upfront
Since many suppliers offer discounts on paying the total amount upfront, many buyers fall for the temptation which can be risky. If you have a long-term relationship with a supplier, getting a discount by paying everything makes sense but if you are dealing with a certain supplier for the first time, it’s better to obtain credit terms from the supplier. It will encourage the supplier to ensure quality and make the deliveries on time. While developing the contract, clearly mention the specifications and expectations.
3. No Information Security Program
If you have to pass data and sensitive information to your vendor, it is important to make sure that the vendor has an information security program in place. Moreover, the program should highlight its capacity and strengths to protect sensitive information. The program must include administrative safeguards such as strong password requirements as well as physical safeguards such as Account lockouts.
4. Not Asking for Product Samples
Don’t hesitate, ask for product samples. Product samples depict the supplier’s capacity to cater to your quality requirements. Most of the vendors will agree to this and will let you inspect the quality of the product. This will also help you analyze if the product can meet your customers’ expectations.
5. Choosing Sourcing Agent over Sourcing Company
Sourcing agents or sourcing companies deal and communicate with suppliers on your behalf. They are supposed to ensure transparency and make decisions that are right for you. Sourcing agents are essentially freelancers with no reputation to uphold. Sourcing agents are present in the country where you want to source from, meaning you can meet them virtually not physically.
Sourcing companies have a vast network and global diaspora of agents with specialized backgrounds in various industries and extensive experience in global trade. As opposed to sourcing agents, sourcing companies have a reputation to uphold.
Reliable sourcing companies such as Blink Global, offer clients a fair comparison of different vendors based on their terms of production, quality, and pricing!
Sourcing AgentsIn a nutshell, a sourcing agent is a freelancer hired on a fixed fee or commission to source products for you. Since they are typically freelancers, they can be found through sites like Upwork and Elance, referrals, or they may approach you via cold contact through email or social media, such as Facebook/LinkedIn. Sourcing agents are present in the country where you want to source from, meaning you can meet them virtually. A sourcing agent will get you quotes from different factories and suppliers, establish a deal, and ship products to your home. The problem with sourcing agents is that they have no reputation to uphold. If things go wrong, it’s very hard to hold them accountable. They are in another country and you cannot just walk into their office and give them tough looks.
Sourcing CompaniesSourcing companies have a vast network and global diaspora of agents with specialized backgrounds in various industries and extensive experience in global trade. The procurement officers have forged long-term relationships with reliable sellers to get the best products at an excellent market price. Here are some benefits of sourcing companies:
Global Reach & Limitless IndustriesSourcing companies have global reach and they have agents around the world. They have connections with manufacturers across various industries.
They Provide Complete 360° Sourcing SolutionsThey provide 360-degree services that include:
- Supplier Research & Factory Audits
- Contract Negotiations & Verifications with Analysis
- Order Monitoring, Product Development & Dispute Management
- Quality Control, Inspection & Reporting
- Logistics, Shipping Consultancy & Payment Management
Quality AssuranceAs opposed to sourcing agents, sourcing companies have a reputation to uphold. They ensure high-quality products and monitor the production process while also running quality assurance tests. Reliable sourcing companies such as Blink Global, offer clients a fair comparison of different vendors based on their terms of production, quality, and pricing.
What is MOQ?The definition of the term Minimum Order Quantity is pretty self-explanatory. MOQ is the lowest set amount of stock that the supplier is willing to sell. International suppliers have set an MOQ on many of their products and don’t cater to orders that fall below it. MOQ varies from product to product and supplier to supplier. However, when dealing with suppliers overseas, MOQ is always a factor.
Why Do Suppliers Have MOQs?In a nutshell, wholesale suppliers need to place MOQs to stay profitable. If they cater to orders of very small sizes, they won’t be able to manage their costs and stay profitable. Suppliers need to cover all the costs and MOQ helps them earn profits from the coordination.
How to Deal with MOQ When You are BuyerLike we mentioned earlier, there are walkarounds that you can try and ensure the profitability of all parties involved. Here are some tips:
Negotiate on a Lower CostMOQ may not always be flexible and negotiable, but prices most certainly are. When a supplier is stringent on MOQ, try to negotiate on the price of the minimum order. Work toward a lower price but don’t risk your investment by insisting on a price so low that the supplier may compromise on the quality.
Work with a Small SupplierIf the scope of your ordering is small and limited, it is wise to partner up with a small-sized supplier. Small suppliers usually don’t have stringent MOQ requirements and are often ready to negotiate on the terms. There are plenty of small-scale suppliers that provide high-quality products at very competitive prices. So if you are just stepping into international sourcing, start with a small supplier. However, you should always make sure that the supplier is reliable and authentic.
Sign Up for a Long-Term Contract:The best way to get the supplier on your terms is by signing a long-term with a supplier. Overseas suppliers are looking for long-term contracts and partnerships and if you ensure a supplier that you are going to work with them in the future, they’ll compromise on their MOQ terms and will cater to your small orders as well.
Partner up with a Sourcing CompanyThe best strategy is to partner with a sourcing company. An experienced sourcing company like Blink Global has vast experience in dealing with suppliers and helping clients get the best products at competitive rates. Our agents also deal with industry-specific suppliers and are masters of creating win-win solutions. Get in touch today!
90% of the world trade is carried by sea. Maritime transport is the most cost-effective way to mobilize goods and raw materials around the world. However, maritime transportation of goods takes a lot of time and if you want to get your goods shipped ASAP, air freight seems like the obvious choice.
Despite how appealing it seems, air shipping is not always that convenient. We are listing four important things that you must know about air freight.
Air Freight May Not Always Get Goods Delivered ASAP
Time is the most important factor why many businesses decide to choose air freight over sea freight. However, air transport is not always reliable as the air traffic is very vulnerable to weather conditions. Flights get delayed when the weather is not certain. Since air traffic can be affected by adverse weather conditions, you must always be prepared for unexpected delays.
It Can Get More Costly Than You Think
Many business owners realize that air transport is costly but often find themselves asking, “How costly can it really be?” Well, it turns out that it’s very expensive and can get 10 times to 100 times more expensive than maritime transport. Airfreight is regarded as the most expensive mode of shipping. Air freight rates are so high that it usually isn’t practical for transporting low-value products.
Be Careful With the Packaging
If you are shipping internationally, your cargo is going to have to be properly packed for the long, arduous journey. Many business professionals believe that air shipping is totally safe for the cargo but it’s important to remember that just like ocean shipping, your cargo is going to be handled by different people multiple times during transloading and other operations. So it’s imperative that you put in the time and money to make sure that it’s packaged properly. It is wise to apply ample amounts of padding and add more protective layers to give your cargo the extra cushioning it needs.
Air Freight Isn’t Very Eco-friendly
Lately, we have seen large corporations taking on “green” initiatives as there has been a great deal of scrutiny on businesses to pledge to sustainability with more eco-friendly operations. While major environmental risks such as oil spills are also associated with oceanic transport, the carbon emissions in air freight are guaranteed. Air transportation poses a more consistent threat to the environment so if your business has or wants to create an impression of eco-friendliness, air freight is certainly not a wise choice.
About Blink Global
BlinkGlobal is your next Global Sourcing Partner. We excel at B2B industrial and consumer products with centralized procurement and precise delivery. We are ready to help you make the right decision, get in touch with us today!
Maritime transport is crucial to the world economy and global supply chains as over 90 of world trade is carried by sea. Maritime transport is the most cost-effective way to mobilize goods and raw materials around the world.
At Blink Global, we provide our clients with all types of freight options but for shipment over 100lbs, we recommend our clients to opt for ocean freight. It is the cheapest and the best option as shipping by sea scales well. For instance, a shipment of X lbs might cost you Y$; whereas a shipment weighing 100X lbs might cost you only 20Y$, making it the best option for transporting in bulk.
However, for someone who is new to international trading, ocean freight may appear a little intimidating. In this article, we are addressing 3 of the most common and pressing concerns that our clients have about ocean freight.
You Don’t Need to Book a Full Container
This is a basic concern that many people have. There are two types of options in maritime logistics: LCL and FCL. FCL, or a full container load, is a shipment process where you get a full exclusive container for a single shipment. In FCL, your cargo space is not shared by any other cargo. However, in LCL you do not get an exclusive container, instead, you pay for the share of the space you use. With LCL, you are not required to book for a full 20 or 40-foot capacity container.
Customs Clearance at Ports Isn’t That Complicated
Many people believe that customs clearance at seaports is way too complicated compared to airports. A good freighting partner such as Blink Global will make sure that you meet all of the legalities, have adequate clearance documents, and have paid all the necessary fees beforehand. Meeting all of these simple pre-reqs will ensure a smooth passage of goods from the port authorities.
Pricing is Not Complicated
Calculating ocean freight is in fact easier than air freight or land freight. LCL shipments can be expensive in terms of price per unit. However, since you are not required to book a full container, you can ship limited goods at a fair price. For LCL shipments, the freight is calculated in terms of the volume your shipment will acquire (for exceptions like fragile or extremely lightweight cargo, the pricing may be different). For FCL, you have to pay a flat price for the container.
About Blink Global
We’re your Global Sourcing Partner. With our deep understanding of global sourcing, we supply B2B industrial and consumer products with centralized procurement and high delivery precision. Get in touch with us TODAY!
Freight and cargo is the most widely used terms in the business and commerce sectors. Many entrepreneurs confuse freight with cargo and vice versa. Generally, the two terms can be used interchangeably, but in supply chains, the two terms cannot be cut from the same cloth as it may cause confusion.
In this post, we are going to compare freight and cargo. What both terms stand for and the differences and similarities between them.
The term cargo refers to the shipping of goods and supplies via sea or air. Cargos are usually sent on ships and planes. For a certain shipment to be classified as “cargo” it has to travel over large bodies of water, meaning going from one continent to another. Cargo vessels and planes are meticulously designed to carry bulk quantities of goods and raw materials across the world. The term cargo is often used when discussing international shipping.
As opposed to “cargo,” the term freight refers to the shipping of goods and supplies via roads or railroads. This shipping typically uses tractors, trucks, and railroads, hence the terms freight truck and freight trains. For a shipment to be classified as freight, it has to remain on the land. While some goods may be moved across a country via air, it resorts to being freight as it resumes travel overland.
The Term Air Freight
As we mentioned earlier, goods are classified as freight when they travel across the land but lately, we have also seen professionals using the terms “air freight” and“sea freight,” which is also commonly accepted as correct usage. This is primarily because the term freight is also used for the payment when certain goods are being transported.
It must be noted that mail cannot be classified as freight as it generally does not include commercial goods. The right term for mail, whether it be bundles of letters or packages or parcels, is cargo. Mail is never referred to as freight, whether it is transported via air, land, or sea.
Difference Between Cargo & Freight
The main difference between the two is the medium and vehicle of transportation. Cargo is usually moved by large vehicles, such as vessels and cargo aircraft, whereas frights are usually moved by smaller vehicles such as trucks and vans. Like we mentioned earlier, the term freight also refers to the cost/payment of the goods being moved from here to there, cargo does not refer to anything else except goods or products.
Freight Solutions by Blink Global
Ocean freight is the most cost-effective solution for shipment on a large scale. At Blink Global, we have partnered with the world’s leading shipping and container transportation companies to provide you the most efficient, reliable, and cost-effective services. Get in touch with us today!