How I Learned to Source Things Overseas

How I Learned to Source Things Overseas

For many years of my life, I did international trade sourcing. My first taste was sourcing out silicon dioxide particles for a photovoltaic research lab. Later I did sourcing for a company specializing in industrial equipment.

I wasn’t a fan of using Alibaba. I couldn’t tell which vendor was best. They all looked the same to me. Some slight exaggerations here:

  • “Look at me, here’s my MoQ (minimum order quantity) price, I make good stuff please msg and buy”.
  • “I supposedly manufacturer things for big corporation X because I photoshopped their logo on my product”
  • “I’m a gold Alibaba vendor you can trust me over the non-gold vendors! (JK I just bought the title)”
  • “I’m going give you a ballpark price range for my goods, it’s between 1 and infinity”.

It was very hard as a beginner sifting this out. Note that this was around 2015, so things may have changed since then. I did what every “guide” recommended I do – reach out to every potential vendor.

Bad decision. I registered my personal email on Alibaba. To this day I still get spam messages from vendors asking me to buy silicon dioxide particles. Once your email gets out there, you can’t get it back. It’s even worse than throwing your friend’s phone number into a local dating hotline. At least, those expire after some time.

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Everything I did through Alibaba was just guesswork. I did not know if what vendors said were true and did not believe the metrics Alibaba put out either. For instance, has this person done business for 6 years? Are they as good as their gold vendor rating says they are? In fact, later I actually found these metrics to be many times inaccurate – or even bought out. Much like today you can buy fake BBB review, artificially inflate/buy your Yelp rating, etc.

I thought there must be a better idea on how to source X items from Y industry.

The beginnings of a great idea

I read a story about Boeing having JIT logistics issues streamlining 787s parts.

Then it hit me. I knew the solution. Several years ago I had gone to a Boeing seminar lead by an industrial engineer. She talked about how Boeing had run into some problems sourcing products overseas. It would be freighted over, but then get stuck at customs for whatever reason.

What did they do? They put nuclear materials inside of each container, so it would go through a separate stream at customs. Expediting the entire process.

That got me thinking. After 9/11, many systems were implemented to tracking what came into the US. These include airlines coming from other countries, container freight, etc.

I figured all this data was out there somewhere. I did some research and found all US customs data that were publically available. I could look up trade records, but it was just as difficult as looking up patents through the USPTO.

Through some research, I found a few companies that specialize in visualizing this data. Things like panjiva, import genius, and piers were some of the ones I tried. I settled for Import Genius due to its price range/data visualization mapping tools at the time. It costs me roughly $400 for one month.

So what did I do with this platform?

An example of records with Nike

I figured there was absolutely no point in doing more work than I had too. Why source things out, when your competitors sourced it out already?

What I did was the following in my industry:

  • Search the top 20 e-commerce retailer sites
  • Check how many times different vendor names came up
  • Determine their main warehouse/freight forwarding address
  • Grab the top 20 vendors in Alibaba

I ended up finding where everyone bought everything in that industry.

It took me exactly one month and hundreds of queries to get this to work properly. Along the way, I discovered the following:

  • Some US companies would have secret company names for purchasing overseas. I used the shipping consignee address as the final say instead.
  • 1 to 5 companies dominated the mass majority of private labeled goods coming into the states.
  • Some buyers in the states discontinued buying from certain vendors. This was for a variety of reasons – either (1) the vendor was bad or (2) the US business stopped private labeling. I saw some of both.

I reached out to the 1-5 vendors on Alibaba / their website. One hit it off really well and was very communicative from the get-go, so I wanted to meet them.

Going to China

I got scammed when I got there. I actually speak the Chinese dialect in that region too which is the more ironic part. I was fully aware of the taxi scam happening but my luggage was in the cab, so I just coughed up due to the implications.

Before I went there I read the import bible among a few other books before going to China.

There really isn’t much to say here except that it was much different than what I envisioned. And what I read. Namely:

  • I didn’t have to negotiate at all. There was a pricing excel catalog with 1000+ items for all US customers. I had every intention of buying a 40′ container worth of goods anyhow.
  • I got sensory overload. It took me I believe I walked almost 50+ miles to see everything at the show. Over the course of a few days.
  • Visiting the site confirmed all the US vendors buying their goods
  • I learned how things were truly made. Checkout strangeparts on youtube for some great insights.

From there I just worked with the vendor via email. Then I built a custom solution for sending spec sheet/reference SKUs. Partially because of shipping delays due to so many back and forth email spec clarifications.

After, I designed the logo/box. Worked out any bug fixes then. From there, I worked with my logistics provider who did all the shipping work. Then I got to see the product firsthand.

Overall it was a fun learning experience on how to source things internationally. I had next to no knowledge going in.

What it really made me truly appreciate is the shipping industry as a whole. I later visited the Boeing Factory and Long Beach Port in California to see where all the magic happens at.

 

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