Beyond Alibaba!

If you have sourced in China before, I bet the first thing that comes to mind is Alibaba.

This is a perfectly normal reaction. Alibaba is a very useful and convenient sourcing platform.

Post a buying lead, and you will have dozens of responses within a few hours. Even some in a few minutes. You can just sit back and relax while suppliers come to you. To most this is ideal. Put in minimal effort, for maximum returns.

But have you ever asked yourself whether there are alternatives to Alibaba? The answer is a resounding “Yes”. And many might be better suited to your needs.

Before we look at a few alternatives beyond Alibaba, you might want to know why you should look any further, if Alibaba has worked for you.

Simple logic is that you can only judge the effectiveness of Alibaba if you have something to compare it to. If you have not looked any further than Alibaba, you have nothing to measure it against, objectively or even subjectively.

I could write about the shortcomings of Alibaba, but this is not what this article is about. A simple Google search provides enough of these.

Instead we will simply look at some alternatives you can explore.

Business Networking

A useful alternative to Alibaba is networking, both offline and online.

I am sure that you have colleagues in the same industry as you. Ask them for a supplier reference, or if they know of any good suppliers.

It is in their interest to give you these details. It might seem counter intuitive for a business to share its good suppliers with anyone else. It actually gives them a valuable tool. Leverage.

Think about it. If the supplier misbehaves with an order, it also risks the referred buyer’s order. The supplier knows the two buyers are in contact, and that they will probably discuss any misdeeds by the supplier. Therefore, the supplier risks losing more business than it would without the referral.

Make use of professional networking sites such LinkedIn . There are thousands of suppliers in every industry here, and they are connected to thousands of buyers. There are also plenty of industry specific groups that are also a good source of suppliers.

One of the best things about LinkedIn is that you can get supplier references by connecting to a supplier’s network.

If you use a supplier you have found on LinkedIn, and there are problems with your order, the supplier risks this being discussed on the site. If a supplier does a good job, you can create some goodwill by mentioning this to your network.

The main downside with LinkedIn and other professional networking sites, is that it takes time to build up a network, and use it effectively. A strong network can also take a few years to build up.Joining groups is far quicker and will result in quick references and advice.I suggest checking out the following link; LinkedIn-Beginner Tips.

Joining your local Chamber of Commerce, is also a way of networking with others. So is joining the local federation representing your industry.

Trade-Shows

There was a world before Alibaba, and many businesses sourced through trade shows, both in their native country, and abroad. There are still thousands of trade-shows every year, and they are still valuable as sourcing tools for a number of reasons.

You can meet suppliers face to face. This goes a long way to establishing a relationship. It is far better than an “email” introduction.

Face to face meetings usually result in clearer communication. Important points can be stressed.

Face to face meetings give you the ability to “feel out” suppliers before doing business.

The supplier will have physical samples of its products.

There will be multiple suppliers in one venue.

Business deals can be done immediately at a trade-show if you so desire.

 

Here is a link to the important annual trade shows in China. China Trade Shows.

Many Chinese suppliers will also exhibit at local trade shows in your country. A good example is Magic in Las Vegas every February.

There will be plenty of trade shows in your country, too. An internet search is a good start.

 

Other B2B Websites

Although Alibaba is the biggest and most well-known B2B site, there are many more. Some of these tend to offer a better user experience. I personally prefer the interface (less clutter) and ease of Global Sources. You can also check out Made in China.

Another advantage of alternative sites, is the lack/reduction of spam. I can honestly say, out of the numerous sites I use, Alibaba creates the most spam. They are also extremely pushy in their mails trying to sell me Gold Member status, which I do not appreciate. It often borders on unprofessional behaviour

A Web Search

An old-fashioned internet search often leads to good results. Not all suppliers have Alibaba membership, for a multitude of reasons. An internet search often gives you more detailed and accurate information about a supplier than Alibaba. It is not in Alibaba’s interests to police poor performing suppliers, as they risk losing these fee-paying suppliers. The internet is not as kind.

 

A simple Google search of Ningbo, China apparel factories nets a lot of options. There are the usual suspects such as Alibaba and Made in China caught in the search. It also gives some other B2B sites, as well as direct supplier websites.

Another good thing is that peripheral information is caught up in the search, such as advice in finding factories and other useful articles. Some of this makes interesting reading.

In conclusion, a sound sourcing strategy requires that multiple channels are explored.

Being prudent and ensuring all possible channels are explored will not only improve your sourcing ability, but will give you access to new connections, up to date information, and industry news that can directly affect your business.

Email only, please.

People often ask me why I refuse to use any of the instant messaging services (Line, What’s App, We Chat, etc) for business.
I always reply, that today, email is also an instant messaging service. Everyone has their email app on their phone.
What is important to me, is that it creates a chronological paper trail that cannot be disputed, accessable through any computer or smartphone.

Prices, prices, prices! 

Never be reluctant to ask a supplier about a price quoted for a garment, or anything for that matter.
Some people often seem reluctant, especially if the price is good. 
They think questioning it will somehow let it slip, that its a good price. 
But, keep in mind, it could be a mistake on the suppliers part, and when the supplier realises it, you could be in for a shock.
Always double check what a quoted price includes.
Is it for your Incoterm specified? 

Does is include all raw materials and inputs? 

If you have a nominated supplier for trims etc, does it include this cost? 

Does it take into account your payment terms? 

What is the validity of the price? 

How will any exchange rate or commodity price fluctuations impact the price? 

Does it include all sampling required once the order is confirmed? 
I am sure you can think of some more questions, but never be afraid to double check every detail.
#correctcosting

#rightfirsttime

Excuses anyone? 

Everytime I visit a factory that is not busy, I get the same answer, without even asking the question.”This is our quiet period. In a month, we’ll be full.”
The strange thing is that, I get the same answer no matter what time of the year I visit.
From January to December, I get the same story from about every factory, working well below capacity.

Now we know a lot of business is seasonal, to the extent that there are usually specific times during a year when brands place their bulk orders. 

But, a lot of business is not, where buyers are placing orders throughout the year.
That’s why it was refreshing to get a mail from a Chinese supplier, asking for suggestions to increase business, due to so many buyers moving to lower cost countries, and/or countries with import duty benefits.

The Commercial Decision

This has been something I have meant to write about for a while. It will be short and sweet. I was reminded of it by a client of mine, who has come to this crossroads.
In apparel manufacturing, mistakes are often made, and in some cases they cannot be rectified, without delaying your shipment.
Thus a decision needs to be made as to whether or not to accept the mistake. Will the mistake have material impact on sales? This is what I define as the commercial decision, and have faced it numerous times.
A recent example was for yarn dyed shirts. As these were what is known as “engineered”, it means when the front panels are sewn to the back panels, the stripes need to line up. Buyers pay a higher price for these items, as there is more wastage, than if the stripes did not have to line up.
On seeing the final product, I noticed that the stripes did not line up. Decision time. I decided that a 0.5 cm deviance, was commercially acceptable. Most items fell into this. The supplier breathed a sigh of relief. This was short lived, as I then required a 30% discount, or would cancel outright. “But why?” bleated my supplier. Answer; “You did not show the correct care when manufacturing my order, and you cocked it up. You need a reminder, not to do it again”.
He took the hit.
Never accept something a manufacturer does, that is incorrect, even if it will not have a material impact on your business. There has to be a penalty involved. Otherwise you are setting a dangerous precedent, for two reasons.
Firstly, the supplier will see you will accept sub par goods, and he will see $ signs, knowing he can cut the corner on purpose next time, and you will accept.
Secondly, if it does happen again, he has the “But it is minor problem, and last time you accepted it.” argument.
You also set the precedent that you are serious, and not to be trifled with. Manufacturers love to cut corners, and the only way to penalize.
Whether it was a genuine mistake (I always give the manufacturer the benefit of the doubt), or not, it is neither here nor there. A mistake was made, and someone needs to take responsibility. In this case the factory owner, for not showing proper care.
As a buyer there is pressure to buckle if the mistake is not material, as you are under time pressure. Do not try to negotiate a discount, as the manufacturer knows you are under pressure. State your terms and walk. If the manufacturer comes with a counter offer you feel is fair, accept. But, do not waste time in protracted negotiations, over this. The only thing you need to say is “no”, until an acceptable settlement is reached.
If it destroys your relationship with the manufacturer, you have back ups for your next orders (if you followed my previous advice, that is).
Such is the nature of this beast.
Till next time.