sourcing product from china
DESCRIPTION
Sourcing Product from China. Collaborative Knowledge Development Project. Did you know…?. How do you find and select a Chinese manufacturer?. Sourcing Options. Shipping. Distribution. Manufacture New. Domestic Customs. Warehouse Retail. FOB. Logistics. Source existing. Shenzhen - PowerPoint PPT PresentationTRANSCRIPT
Collaborative Knowledge Development Project
Sourcing Product from China
Did you know…?
How do you find and select a Chinese manufacturer?
Warehouse Retail
Domestic CustomsFOB
Manufacture New
Source existing
Wal-Mart Approach
Logistics
Sourcing Options
• Shenzhen• Shanghai
• Agent• Manufacture
r
Shipping Distribution
Think of Sourcing a Chinese manufacturer as a three-stage process.
Asses Cost-Benefit: China or Domestic?
Identify & Select Manufacturers
Manage Shipping
1 2 3Assess
Identify & Select
Manage
Which product do you want to source?
Key questions:• Do you have adequate knowledge of the product
specifications?• What kind of volume do you anticipate?
Step 1: Assess cost-benefit of manufacturing in China vs. domestically.
For example: Smashpong –A fun variation on ping-pong
1 2 3Assess Identify & Select Manage
Key Considerations:• Use a Sourcing Agent (ask :
5% of shipments)• Websites – Alibaba.com (agent
or factory)• Fairs (e.g., Canton, Vegas)• Relationships “Guanxi”• Domestic-only Chinese
manufacturers (+ courier)
Step 2: Identify and select manufacturers.
Identify
1 2 3Assess Identify & Select Manage
Step 2: Identify and select manufacturers.
Select
Key Criteria:• Specs (leather, durability,
materials); domain knowledge required
• Price (per unit, FOB); payment terms:• 30% upfront• 70% release factory• Per unit $
• Time to FOB
1 2 3Assess Identify & Select Manage
Step 3: Manage shipping.• Pricing - % of container
• $1,500 - $3,000; 20’ container• $3,000 - $5,000; 40’ container (Hi-Q); less restrictive
• Logistics companies (i.e., Alibaba)• Criteria: quality of service, time, price
FOB:• Shenzhen• Shanghai
Domestic Customs:• Physical/self• AgentNote: Manufacturer must produce Manifest
Logistics• Agents• Transport• Manifest• Tax forms• Retail• DC
Warehouse / Retail
1 2 3Assess Identify & Select Manage
The Harmonized Tariff Schedule of the United States (HTSUS) is the primary resource for determining tariff classifications for goods imported into the United States.[1]
The Harmonized Tariff Schedule is based on the international Harmonized Commodity Coding and Classification System (Harmonized System), which has been established by the World Customs Organization. Virtually all countries base their tariff schedules on the Harmonized System, making it easier to conduct international trade.The U.S. Harmonized Tariff Schedule, like Harmonized System tariff schedules generally, classifies a good (assigns it a ten-digit tariff classification number) based on such things as its name, use, and/or the material used in its construction…There are over 17,000 unique ten-digit HTS classification code numbers. Source: http://en.wikipedia.org/wiki/Harmonized_Tariff_Schedule_for_the_United_States
Step 3: Manage Shipping.
1 2 3Assess Identify & Select Manage
What did you learn that you didn’t know before?
Key Take-Aways