compliance course sourcing 101...trip to india - entry 8 - full day in delhi 22 trip to india -...

SELLER SOLUTIONS

Sourcing 101

© Cascadia Seller Solutions

SELLER SOLUTIONS

Sourcing 101

By Rachel Greerwith Emily Murray

C O M P L I A N C E C O U R S E

SELLER SOLUTIONS

Sourcing 101


Table of Contents

Sourcing domestically vs. abroad 3

Importer of record 4

Legally required documents 5

Penalties or failures when you’re the IOR 6

Incoterms 6

Timelines for reorder 11

Working with a Chinese factory 12

China Study Tour: Brother Machinery Co. Xi’an 14

China Study Tour: U.S. Embassy 17

China Study Tour: ENN – Butterflies and Children 19

Working in other parts of the world 21

Trip to India - Entry 8 - Full day in Delhi 22

Trip to India - Entry 21 - Accenture 26

Working with a US domestic manufacturer 31

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Q: What is the primary difference between sourcing domestically and sourcing abroad?

A: Liability.

When sourcing domestically, in most situations, the private label holds no legal

liability for the product’s safety where regulatory requirements are concerned.

Typically, domestic companies will allow you to be added to their product

liability insurance, and thusly be covered from potential issues resulting from

lawsuits.

A major exception to this is that the CPSIA (Consumer Product Safety Improvement Act)

does NOT exempt children’s products – a private labeler of domestic children’s products is

still jointly liable – in this case, the manufacturer probably has it handled, but you should

always be aware of your obligations.

When sourcing abroad, the importer of record is solely legally liable for the

goods, in most situations, from a regulatory and litigation perspective. There

are situations in which liability can be joint, as in jewelry, where the seller is

jointly liable with the importer and retailer, or if someone were to private label

your product and it fits the above requirement under CPSIA, then you’d be

jointly liable.

But if you import, there is not a time in which you’re NOT responsible for the

products.

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You must get an LLC to protect yourself from risk. Do not EVER import

products with your personal social security number! If you have to, save up

until you can afford the LLC filing, rather than put your personal finances at risk

for this business. I cannot stress this point enough.

Q: What is an importer of record? A: If you’re sourcing the product, it’s you.

Importer of record is a term used in customs law. It refers to an importer,

whether an entity or individual, who is responsible for ensuring that compliant

goods are imported in accordance with the law of the place. Importer is

responsible for filing legally required documents.

As I said above, get yourself an LLC! But when would it be reasonable for an

individual to be IOR (importer of record)? Let’s say you’re on Amazon as a

customer, and you see a totally adorable owl necklace, or THE perfect leather

wallet for a great price. You then purchase it, and enter in your shipping details

so that the item can ship from China. By putting in your details and allowing it

to ship you by mail, you are personally the importer of record from China.

Why is it alright to be an individual importer in this context? I’m harping on

you getting an LLC, and now I’m saying it’s OK to be an individual IOR? It is

because the item is classified for personal use, not resale. Your legal liability is

virtually nil if you’re the one using it; you can’t sue yourself for importing faulty

or dangerous products. But think about that now in the context of a whole

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SHIPMENT of adorable owl necklaces, or perfect leather wallets, for resale to

people everywhere who can sue you...

Q: What are the legally required documents? A: It depends largely on what product you’re importing, but typically you can expect to include security filings, bill of lading, commercial invoice, and HTS classification.

New sellers, please review this basic importing and exporting information

from US Customs and Border Protection (CBP). It’s packed with useful

information.

Experienced sellers (or those buying large ocean going freight all at once),

check out this book (literally, a book) with everything you need to know about

importing into the US.

https://www.cbp.gov/trade/basic-import-export

https://www.cbp.gov/trade/basic-import-export

https://www.cbp.gov/sites/default/files/documents/Importing%20into%20the%20U.S.pdf

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Q: What are we talking about when we reference penalties or failures to declare properly when you’re the IOR?

A: Check out the following 2 videos. You definitely do not want to be on the wrong side of CBP.

CBP News: Unsafe Mattresses

CBP News: Unsafe dolls

Q: What are Incoterms?

A: Incoterms are a set of rules which define the responsibilities of sellers and buyers for the delivery of goods under sales contracts. They are published by the International Chamber of Commerce (ICC) and are widely used in commercial transactions.

https://youtu.be/6l0mxdhw7gI

https://youtu.be/5N3wsmDmmsA

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The terms found in the column marked FCA is most common for air freight,

while FOB is most common for ocean freight. DDP (Delivery Duty Paid) is also

a common air freight shipment method, wherein the seller is fully responsible

until delivery. EXW is the exact opposite, where the buyer is responsible for

nearly every part of the transportation, freight, clearance, and insurance.

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This infographic shows us that the responsibility for loss transferred to the

Buyer upon being loaded onto the boat – this means Customs filings, legal

responsibility, etc. However, the seller insured the shipment and paid for the

boat transportation, rather than the Buyer, leaving the Buyer to insure the

shipment and arrange transportation after arrival.

Here is a nicely detailed example for CIF:

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In this case, the ownership transfers at the point at which the container crosses

the bow of the ship.

Here’s another visual way to imagine this for FOB:

Why do Incoterms matter?

1. You need to know who’s legally responsible for the shipment, and who is

the official IOR. If it’s you, you’re on the hook for the filing and for the legal

compliance of the product.

2. You need to plan for additional costs if you’re shipping anything other than

DDP. With EXW, you must get quotations and manage costs for the entire

supply chain, which is why pricing can be so attractive with that term.

3. If something goes wrong – say your container falls off the ship, or a machine

smashes the container while loading – the terms clearly spell out who

owned it, who insured it, and whose loss that shipment is.

Check out this video that explains Incoterms in a very accessible way.

https://youtu.be/Ek25Y23XGFg

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Q: What are the usual timelines for reorder? A: Re-order is dependent on a few different key factors.

1. Factory production lead time (raw materials purchasing, production,

inspection/shipment)

2. Port of export and port of entry

3. Holiday schedule (very little happens in February in countries that follow the

lunar new year, such as China, or Vietnam)

Interactive Map of Ports of Entry: https://www.cbp.gov/contact/ports

Here is a reasonable timeline you can expect for a reorder:

Place Re-order May 1

Factory sources materials May 21

Factory produces product May 31

Inspection and Shipment June 11

Ocean Freight July 5

Customs Clearance July 18

Prep & Truck Shipment July 31

https://www.cbp.gov/contact/ports

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Typically, the import supply chain is about 12 weeks. With your first order,

which is at best 12 weeks, we save a lot of time by going air freight, which

typically takes 5 days instead of closer to 5 weeks, with all shipping, loading,

transit time, and so on factored in.

For domestic shipments, the factory lead time is far more important than

any other factor. This is because most shipments can travel by truck or rail

within the United States within a week, about the same timeframe as air

shipment overseas. Some smaller factories can produce and ship within a

week, making your re-order time only a few weeks, and some factories in the

US are so busy that you’ll be in line for months before your next order can be

completed.

An important note – Mexico and Canada are both import countries, but the timelines

are much more similar to domestic production. So your legal responsibilities are like

an overseas import, but your reorder process and timelines are more like domestic.

Q: What can you expect working with a Chinese factory? A: This is a very broad question, and there are a lot of factories in China. But, to paint with broad strokes, you can expect a few things when working with Chinese factories.

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1. If they have any belief they can produce a product for you, they will say yes,

even if they have never done it before, don’t have the equipment, or don’t

have the expertise. If they really, absolutely don’t think they can do it, they’ll

tell you maybe. Always be specific in asking what their capabilities are so

that you can determine yourself whether they can meet your expectations.

2. You must spell everything out. When contracting in the US, you can expect

that the factories you use will ensure legal compliance is met. This is NOT

something you can assume when working with China. You must spell out

precisely which regulations, and which test methods are to be used to

verify compliance, simply saying that they must comply with US law is

insufficient.

3. Because they want your business and want you to be happy, Chinese

factories often will not clarify terms for overages or for costs if you

change your inspections AQL, or if you need a different package. They will

try to quote you the most advantageous and nice looking price up front,

to make you happy and gain your business. They know you may not know

all the costs involved, and may choose the best looking price, even if it’s

incomplete.

4. If they have agreed to terms, they will fix the problem for you. I have never

encountered a situation in which the factory failed to make a wrong right, if

the terms were discussed and agreed to before production started. They will

not try to cheat you; but you must be aware that they will also not go out of

their way if you haven’t put in the procedures to protect yourself in advance.

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China Study Tour: Brother Machinery Co. Xi’an

Brother is a Japanese company that initially began a joint venture with

a Chinese firm in Xi’an in 1993. In this location, they make low-end to

high-end industrial sewing machines as well as machine parts for large

machinery primarily located in the south of China.

Our presentation was made by a Japanese employee who was fluent in

Chinese, and reasonably good at English, although he kept distrusting

himself and switching to Mandarin and one of the Mandarin speakers

in our group would translate, usually Derek. He said that there were 11

Japanese employees at the plant, and only one of them spoke Mandarin.

Their upper level plant managerial staff all spoke Japanese, and workers

could attend Japanese courses if they wished. We found this very

interesting – this is something seen in France and Japan, I would say

most, this sense of national pride and an unwillingness to compromise

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national culture in a multinational venture. This is in reality too broad an

indictment of all Japanese and French firms. However, I do believe that

firms in China

will either

wish to speak

their own

language,

or expect

to conduct

business

in English.

I feel that

the Chinese

have not yet

attained a

level of status

in the world that would force those who wish to do business here to learn

their language. Until then, I will be pleased that my language is now the

language of the world, making my life much easier when traveling.

Our presenter wasn’t actually prepared for us when we arrived. He said

that Chinese people are usually 1-2 hours late, and thus he didn’t expect

us to be on time (we were five minutes early). Thus, some of the charts

weren’t in English, and he seemed very flustered and unsure of how to

structure what he had to say.

The most surprising part of visiting Brother was in hearing how not lean

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the processes at the plant were. Brother is headquartered in Nagoya, the

same city as Toyota, and they ascribe to lean principles and the Toyota

manufacturing method, and yet the volume of work in process inventory

just sitting on the factory floor was staggering. The workers also weren’t

wearing hard hats or safety equipment, but that is probably beside the

point. The company’s core values, dress code, and team metrics were

posted in prominent places in the factory. But, I just couldn’t get over the

volume of inventory lying about – it was clearly not a just in time sort of

operation.

The most interesting part of the presentation to me was the discussion

of profit, or lack thereof, in the operation. Brother already makes virtually

no profit on their lower-end sewing machine, which retails for $300, and

is primarily intended for markets such as Bangladesh. They do quite well

on their high end machines, but the presenter was saying that wage

increases and logistics difficulties in transporting parts and finished

goods were seriously eating into the potential profits of the business.

I really appreciate the time that Brother gave us in Xi’an. This was a real

business tour, not a sanitized version for public consumption. We got

a real picture into difficulties running an outsourced manufacturing

business in China... something China is famous for in business worldwide...

the ways in which it wasn’t a successful venture, and the ways in which it

was.

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China Study Tour: U.S. Embassy

As much as I like to complain about my country, I am, like many

Americans, very patriotic. There would be no sense in complaining unless

I actually cared about the place that I live. So, it was really fun to see and

visit the U.S. Embassy in Beijing for that reason only – seeing the Great

Seal of the United States of America. It took awhile to get inside, though,

due to security measures. Since my name was submitted with my old

name, it was confusing to the officers. Three of us in the group have

different names, due to marriage, and apparently this completely threw a

monkey wrench into their well-oiled security machine. In all seriousness,

though, the security was quite good just to get inside to see the Marine

military guard. The doors are strong, and there are multiple doors to get

through before you’re inside. It makes me feel happier about the level

of security that our diplomats and local staff enjoy when working at the

Embassy.

The presentation by Rosemary Gallant of the U.S. Chamber of Commerce

was the most candid and realistic picture of doing business in China that

we’d seen or heard . She was very clear about what the U.S. government

could and couldn’t do in terms of facilitating trade, advising companies,

and working to improve the balance of trade. Being there made me want

to apply for the Foreign Service again.

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Some of the most interesting things she told us:

• 30% of the water supply is contaminated

• 20 new nuclear sites are under construction (none have been

approved in the U.S. since Three Mile Island)

• There are 53 open positions in Rosemary’s team, but she has only 40

employees due to the hiring freeze

• 70% of healthcare costs are incurred by urban population, but 70% of

the population is rural

• All Americans visiting China should assume that they are being

watched, and their goods are subject to snooping at any time

Overall, the visit to the Embassy painted the clearest picture so far

of what American businesses would really need to deal with when

doing business in China. Also, the bathrooms were standard American

bathrooms – it was heavenly.

And I didn’t see any pictures of children or butterflies anywhere.

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China Study Tour: ENN – Butterflies and Children

The visit to ENN was interesting for a number of reasons, not the least

of which was that it was very clearly a marketing presentation. The first

place we went into was a very expensively decorated room, with TV

screens and interactive display. The history of energy usage was told in

the “progress” perspective, and was concluded with a presentation on

“clean coal.” After the visit, I discussed with some of the others on the trip

that there really isn’t any such thing as clean coal – just potentially less

dirty coal. I understand they’re using “clean” to refer to the burning of the

coal, but I think that any “clean” energy technology needs to be viewed

in aggregate before saying that it is, in fact, clean. Upon leaving the first

building, we saw a video of children laughing and butterflies.

The second manufacturing site we visited was for solar energy. This was

actually quite fascinating, as I didn’t realize that solar panel technology

has changed so much in the past decade. No longer is a clunky large

silicon based panel necessary; thin-film technology fits between two

sheets of glass. Potentially, an entire high rise could be powered only

by its windows. Even here, though, in such a high-tech area – and there

were a lot of machines, this was not a labor heavy manufacturing center

– there was a leaky roof, and a sketchy walkway that made people in the

group feel slightly uncomfortable walking on it.

The last area we visited was the algae facility. This was merely a

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demonstration facility, the real gas production from algae facility is

in Inner Mongolia. The machines looked a lot like flash pasteurization

machines that I saw at Beecher’s cheese in Seattle.

Overall, the work they’re doing is very interesting, and it’s good to see

that China is so concerned with green energy and green technology.

I simply found it rather suspicious how impressive and developed the

presentation was – and there were five other groups that day other than

us – and it makes me wonder what exactly they aren’t saying.

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Q: What can you expect working in other parts of the world?A: For the most part, you can expect working in SE Asia to be similar to working in China, except even more willing to please and work hard for their customers. They like import shipments because usually they can charge more, and it helps increase their prestige with other potential buyers to supply to the US or Europe.

If you’re sourcing from Africa, you can

expect longer shipping times, more

delays overall, and the potential for

higher “fees” or corruption charges.

This can be seen in nearly all less

affluent parts of the world where

customs inspectors augment their

income through careful search of your

shipment for errors.

In my experience, sourcing from the

Indian subcontinent can be a real trial

for US based sellers because they’re

not aware of how manual everything

is in this region of the world. Products

are often made by hand, packaged

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Trip to India - Entry 8 - Full day in Delhi

Yesterday was a less early morning than the morning before, with a wake

up call at 6:30 rather than 2am. That’s always good.

In the morning, we went to Hewitt, an HRO – Human Resources

Outsourcing – company. I found their optimism and can-do attitude

particularly worthy of note. All of us found a great deal of negativity

in the readings we had about India for our papers before arriving. For

example, comments about the infrastructure, which is to our minds

quite terrible, or about a lack of potential qualified workers for the BPO

industry. And yet, the speakers mentioned oh yeah – we do have to have

our own generators and we do need to provide a shuttle service for our

employees, or yes, it takes four years to fully train someone on our system,

so it’s a really big deal if someone is lost due to attrition – which would

all appear to be huge issues, but the attitude was that it was no biggie.

If I were in the position of deciding where to open a new call center,

by hand, transported by hand, and loaded into containers with hand dollies.

Because everything is done by hand, there are a lot of places for errors, and

frequent inspections are required to ensure consistency of quality.

Here’s an excerpt from a business study trip I took to India a few years ago,

visiting a factory in Gurgaon (north of New Delhi), and some other local color

aspects of visiting factories in this part of the world...

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I believe that the additional cost of running my own generators and

shuttling my employees around would be a factor – it makes me wonder

how long India can maintain cost leadership when wages keep rising and

infrastructure is still such a huge issue for new ventures.

Another aspect of the company visit I found to be very interesting were

the people we got to talk to. One of our speakers, Akshay, is head of

global talent acquisition – not just Indian talent, but ALL talent acquisition

globally. That guy is pretty high up, and he showed up and was like hey…

what’s up? It’s really quite amazing, the kind of people we’ve been given

access to here in India.

One of the items I found very interesting from the Learning &

Development manager who spoke was the training program they have

for new associates. This reminds me of the training that is necessary for

associates in my department in Amazon. American associates can get

by on minimal training and reliance on “tribal knowledge” – and while I

personally feel that this is not ideal, most associates will do fine on this

model. I have yet to meet a German or Indian associate who can manage

without significant written material and clearly drawn out SOPs. I find

this cultural difference in terms of training and individual expectations

regarding self-sufficiency to be fascinating. Indian associates at Hewitt

also have their career progressions mapped out for them by their

managers. Those of us speaking about this at our lunch table agreed

that one of the primary factors in our career development was our own

engagement in the process, and willingness to both manage up and

manage down in an effort to make our own career progression happen.

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It is interesting to me to speculate on the value of engendering such

intense self-driven attitudes in one’s American employees, while other

locations worldwide are far more paternalistic in nature.

Our second visit of the day was to the Gurgaon manufacturing plant of

Hero Honda, a joint venture between the Indian Hero group and the

Japanese company, Honda. Their sales of 100cc two wheel motorbikes in

the past decade have been astounding, and the growth has simply been

exponential since the effects of 1991’s liberalization policies began to have

an effect on the disposable incomes of Indian workers. The ability of even

relatively poor people to purchase these items now was my personal

major takeaway from this presentation – it took Hero Honda 20 years to

sell 10 million bikes (they began their venture in 1984). They sold another

10 million from 2004 to 2007, and sold 5 million from 2007 to 2009. That

kind of growth is simply mind boggling.

The visit to the manufacturing floor was amazingly impressive, as there

are three production lines producing a bike every eighteen seconds,

thus the plant produces one bike every six seconds – there are three

plants doing this, and thus Hero Honda produces a motorbike every two

seconds. It was incredibly noisy, busy and fascinating – and I couldn’t hear

a word our guide was saying. One item upon which nearly all the females

in the group agreed – the guy at the engine room assembly line putting

on the green squares was definitely hot.

Since our company visits took so much time, we didn’t have much time

for shopping as planned, but instead went to the Cottage Industries

Emporium to check out some of the items there. There was some pretty

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amazing stuff there, but what in the world I would ever do with a life size

wooden carved statue of the Buddha, I have no idea.

We then went traipsing through Delhi on our empty stomachs to get

to our restaurant. It is amazingly dirty. The smells, the general state of

disrepair throughout much of the city actually reminds me quite a lot

of Yangon, Myanmar. The major difference is that this is ALL that Yangon

is, while Delhi is also high rises, Mercedes, and Hero Honda. You would

never see such an incredibly complex and high quality manufacturing

venture in Myanmar. Also, I think the attitude is a major difference – most

Burmese people I met had a very laissez-faire attitude and didn’t think

twice about toilets not functioning, or the fact that half the sidewalk had

been torn up months before and nothing had been done about it – in

India, the toilets sometimes don’t work and the sidewalks are torn up –

but I get the impression that when asked, someone will attempt to fix

the toilet, and the sidewalk will eventually get repaired.

The food, once we finally arrived… was quite good. I really love the naan

and the sauces – those seem quite safe and delicious to me. The meats,

I’m very leery of, and am unable to eat more than a few bites before

caution takes over. I feel the same way about any dairy or water. I have

only two weeks here – the last thing I need is to be puking and or on the

toilet for a significant part of it.

We finally made it to India Gate – a tomb of the unknown soldier sort of

affair – around 10pm. The hawkers there weren’t quite as insistent as the

ones at the Taj Mahal, and generally responded well to a firmly spoken

NO. They laugh if you say Nahin, in case anyone tries to get you to use that

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if you ever visit India. A firmly spoken NO will get you much farther than

a polite Nahin. Anyway, it was a lovely monument, and a fitting end to a

very long day. I think most of us passed out pretty quickly last night – at

least, I know I did.

This morning, shopping is planned, as well as checking out and flying

to Mumbai. Our airline is on strike, so we might be having to travel on

another airline. Apparently, this is also a frequent issue in India – lot of

strikes. A lot of Indian culture reminds me of southern Europe…. And

striking at the drop of a hat reminds me of nothing so much as Italian

train employees.

But for now… getting ready for a new day, and giving thanks for a healthy

stomach, clear head, and healthy nasal passages…. And we all want to

keep it that way.

p.s. The internet here.... really, really really REALLY is lame. I have no idea

how people deal with this.

Trip to India - Entry 21 - Accenture

This morning, I woke up itching like crazy due to the many bug bites that

appear to have been multiplying on my legs in the past couple of days.

As I am one of those who elected against taking nasty malaria pills, I can

only hope that I do not get the still nastier reason for taking those pills,

malaria.

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Today, we have Accenture in the morning and Boeing in the afternoon.

Never say we didn’t get to visit some significant places of business while

here in India - when I signed up for the tour, I didn’t even realize how

much we would be doing and seeing.

There were two significant parts of the Accenture visit - the first was the

talk given by the Managing Director of Accenture India, Sandeep Arora,

and the second was meeting the mid-level managers and speaking with

them.

Sandeep’s message was that the growth of India means good things for

overall economic growth in the world, and that thinking with an attitude

of scarcity is a negative course of action whenever it is chosen. However,

I think that this attitude is quite understandable, given what I’ve seen

here in India. At Hewitt, Indian managers were discussing how best to

move the non-entry level positions to India after having moved nearly all

entry level positions - other than governmental support positions which

couldn’t be moved - from North America. At Accenture India, Sandeep

took over a group of 15,000 employees in 2006, and in 2009, Accenture

India employs 40,000 people. As an American, one who is working in a

department where more than half of the operations staff are in India,

how am I supposed to look at this as an opportunity? This is a time of

opportunity for Indians and for upper level American managers; I do not

see this as a time of opportunity for the average American wanting to get

an entry level job in HR - because those jobs don’t really exist anymore in

the United States.

However, I noticed the same problem with the person who spoke before

http://careers3.accenture.com/Careers/India/People_at_Accenture/Sandeep_Arora.htm

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Sandeep that I noticed with the Christ U MBA students. One of our group

asked a big picture question, and the speaker went off on a tangent filled

with interesting data tidbits that really had nothing to do with answering

the question. I was honestly surprised to see this tendency with someone

who had so much experience at what is, after all, a global company.

My colleague asked his question three different times, with different

phrasing each time, and still got the same non-response. I also found it

interesting that this speaker was so convinced that India will continue to

be a low cost leader. It would seem from what we’ve learned on the trip,

that cost of living and wages in India are rising at exponential rates. In

light of this, it would seem odd to suggest that the cost of doing business

in India will remain the same without some sort of significant change

in the status quo. One final question which was asked was regarding

intellectual property laws. India has great intellectual property laws on

paper, but truly lax enforcement of those laws, which places the onus of

protection of IP upon the business itself.

It actually seems as though this is a common story in the Indian

businesses we visited - they were all very independent in their

development - choosing generators and their own developmental

structures over reliance on existing infrastructure (because the existing

infrastructure wouldn’t be able to handle the need), and treating it

as simply a by product of having to do business in India. While that is

obvious, it begs the question - can a business which must act like a self-

contained capsule actually be a cost-savings model for the future? Or are

the cost savings achieved by outsourcing to India merely a short term

window of opportunity which will be over within the decade before

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companies move on to cheaper and cheaper destinations?

We did get some great book recommendations from Sandeep, however:

Innovator’s Dilemma, Driven and Tipping Point.

The meeting with the mid-level manager was also very interesting.

She was surprised to see all the notes that Kyle and I had taken during

the lectures, and said that while her team used to be all entirely in the

US, now there’s a whole team in India, and one contact point person

in the US who continues to lead and direct the team at the wishes of

the client. If India is ever to break the mould of just being the “go-to”

person for cheap, intelligent English speaking labor, it would seem to be

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necessary that the leadership on these projects move to India, otherwise,

the entire Indian team is just as replaceable as the entire US team was

before it. Again, as an American seeing a massive recession in the US that

isn’t likely to recover soon due to a lack of jobs, I don’t find any of this

particularly comforting, in spite of being told that an attitude of scarcity

isn’t helpful.

Sourcing in Europe is similar to sourcing in the US, in terms of the quality

and sophistication of the suppliers. I have visited factories in Portugal

that were higher quality and more automated and consistent in their

production than anywhere else in the world. As with the US, however,

there are often

concerns

around

meeting MOQ,

or minimum

order quantity,

because

downtime

is the worst

aspect of

running a

high efficiency

warehouse.

The best part about sourcing in Portugal – the port wine!

SELLER SOLUTIONS

Sourcing 101


Q: What can you expect working with a US domestic manufacturer? A: You can expect that they will do better with nearly every aspect of regulatory compliance and quality than you will, and you can confidently leave this in their hands. If you can find a domestic supplier where you can still make a profit on your product, this is the method that I recommend for sourcing.

However, many industries are completely decimated in the US, and the next

best option is sourcing from Mexico or the Caribbean for freight/re-order

timelines. However, they typically can’t do high end products like complicated

machinery or anything containing electronics/electrical circuitry.

There are also a variety of ways to source and develop products innovatively

in a domestic market – you can create a network of sewists or hand crafters,

people who might try to sell on etsy, but instead you can take advantage of

their ability and time. Or, you can tap into the growing cottage industry of

manufacturing outfits in textiles and small manufacturing, where there are no

more than 5-10 employees, and quality is the name of the game. This is a good

space to be in for delivering high quality goods to your customers.

The last aspect of sourcing in the US is that it may be an option once you

have sufficient capital to purchase from the large manufacturing facilities

that do remain. Many US based manufacturers have higher MOQs for printing

on logos, or for doing custom work, so they’re only cost effective when those

SELLER SOLUTIONS

Sourcing 101


MOQs are met.

Lastly, due to regulatory issues, I highly recommend sourcing food and

supplements domestically, regardless of cost.

I hope that this information has been helpful to you, there is so much to

know! But we’ve got you covered. For help with sourcing, manufacturing, and

importing your product, you’re in good hands! Visit us to see which of our

Management Plans suits you best!

Copyright © Cascadia Seller Solutions. All rights reserved.

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permitted under Section 107 or 108 of the 1976 United States Copyright Act, without the

prior written permission of the author. Requests to the author should be addressed via email to Rachel Greer

at [email protected].

Limit of liability/disclaimer of warranty: While the publisher and author have used their best efforts

in preparing this guide, they make no representations or warranties with respect to the accuracy or

completeness of the contents of the document and specifically disclaim any implied warranties of

merchantability or fitness for particular purpose. No warranty may be created or extended by sales

representatives, promoters, or written sales materials.

The advice and strategies contained herein may not be suitable for your situation. You should consult with

professionals where appropriate. Neither the publisher nor the author shall be liable for any loss of profit

or any other commercial damages, including but not limited to special, incidental, consequential, or other

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