Aug 12 2020 74 mins 3
What are the secrets to sourcing products? Today we talk to an expert who will reveal his 7 secrets. Norman Farrar is a entrepreneur who provides online marketing and managed eCommerce solutions for brands. He has worked with Fortune 500 companies such as Coca-Cola, Mercedes-Benz and 20th Century Fox. Since the early 1990s, Norman has focused on helping entrepreneurs optimize their operations and unlock their business’s potential. Pay my tax - experience is key to sourcing. Inspection and broker nightmare story - liner on wipes was not in place. 4 containers wasted. Buy a factory if you can. Secret 1 Never contact online suppliers Alibaba is a broker. 5 brokers are bad. 30% tax foreigner No manufacturer will talk to you directly for 1000 units MOQ. Brokers are good - but only for beginners Secret 2 Do not pay or get quotes in USD Increases 5-20% extra due to hedge due to RMB fluctuation Sending money through bank - foreign exchange company like seller funding can be very beneficial and saves cost. Secret 3 Know when to negotiate your prices. Don’t negotiate packaging or insert. Negotiate the product pricing. Then talk packaging. Can bring packaging to manufacturer. Store extra packaging at manufacturer if needed. Tell them I’m shopping around and go silent. “I talked to my manager and they approved an extra 7 cents” Secret 4 EXW, I’ll take care of it, instead of FOB EXW works FOB costs 30% more Talk to freight forwarder that’s what you want to pickup. Secret 5 - Supplier is not a Shipper They will use their buddy. Never use a site for instant shipping quotes Hidden fees Secret 6 - HTS Code Harmonized tariff system Save money with proper code. Example: Magnetic tape 4.9% + 25% in duty classification cost $2400 + $13,000. Reclassified 2.1% truthfully saving $14,500. Was classified under aluminum. We looked at it and reclassified as item displayed as warning. Secret 7 - Inspections - HAVE ONE Cost is low $300 or less. Inspect agent doesn’t know what to look for, give them instruction. Example: Skateboard - inspector had to test going left, right, pulling. Bonus Secret- Consolidate Samples Save a couple hundred bucks in shipping costs. Packaging - wooden box can drastically increase value. BIGGEST Golden nugget - Think about how you communicate. In states we use Purchase Orders or POs. In China POs are paper. Pro forma protects you - molds being reused by manufacturer. . Acceptable defect rate in Pro forma for credit. Who owns the product? Molds Get in contact with Norm for product development, sourcing, honuworldwide.com Or email Norm at [email protected] https://honuworldwide.com/product-sourcing/ Future of manufacturing, coming to the states any time soon?
