Three ways how sourcing agents help manufacturing companies cut costs

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Despite the clear cost benefits of manufacturing in low-cost regions such as China, several western companies hesitate to bite the outsourcing bullet because of the sheer amount of work required.

The work is significant indeed: identifying potential suppliers, verifying their credentials, making requests for quotations, negotiating terms, commissioning sample runs, supervising production and conducting pre-shipment quality checks. All this must take place halfway across the world, in a different time zone, and in a language not many westerners can comprehend.

But there is one efficient way to handle an outsourcing project: Hire a sourcing agent such as Sourcing Allies.

Sourcing Allies has been helping companies in the US and western Europe manufacture and source industrial goods from China, India and eastern Europe for over a decade. We are China sourcing experts in die casting, metal stamping, plastic injection molding and other manufacturing processes for metals and plastics, and have developed a successful sourcing process along with our China-based team.

Here are three ways how Sourcing Allies helps manufacturing companies reduce costs.

  1. Businesses get the best price: Western businesses outsource abroad because the low costs of manufacturing in these regions helps them stay competitive. When they hire Sourcing Allies to handle their outsourcing project, we ensure that they get the “best price”. We say “best price” not “lowest price” because in our experience, price is directly related to quality, and inferior raw materials are usually used to manufactur e products for the “lowest price”. This, however, reflects in quality of the end product, which can harm the client’s reputation. At Sourcing Allies, we take everything – the client’s quality specifications and desired cost – into consideration while looking for a supplier who can manufacture for the “best price”.
  2. Reduced logistics expenses: Businesses in the outsourcing game for the long run need a representative on the ground to negotiate terms, handle sample runs, tackle problems that pop up during the production process, conduct quality control inspections and do a pre-shipment check. They also need to draw up NNN (non-disclosure, non-use, non-circumvention) or NDA (non-disclosure) agreements, and might need to hire China-based staff for this. All these hidden expenses add to the overall cost of production. A sourcing agent takes care of all this. Their costs for doing this is included in their fee, which is quoted upfront and can be factored into the total cost of the project. Basically, there are no hidden charges that pop up later.
  3. Increased safety for your investment: Any decision to outsource manufacturing is a risk. Manufacturing in a country thousands of miles away from home is more of risk. Sourcing agents help reduce that overall risk because they work as the eyes and ears of their clients on the ground. Their experience on the ground helps their clients avoid costly mistakes – such as putting the wrong HSC code in the consignment, which can lead to long delays at customs. Experienced agents also know basics – for instance, that a manufacturing order in China must never be commissioned right before Chinese New Year, a week-long mega festival that causes immense production delays because factory workers go on holiday, leaving factories shut for long periods. Sourcing Allies takes all these factors into consideration. It ensures businesses are not stung by costly delays by ensuring production is commissioned at the right time and the consignment is shipped to clients as scheduled.

 

Sourcing Allies guides you through the process of getting quotes, evaluating factories and managing the complexities of manufacturing and shipping. We ensure your goods are delivered where you want them – all for the best price, quality and lead time.

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