Trade shows like Canton Fair are a great opportunity to network with potential suppliers and learn about new products and trends. However, it's important to have a sourcing plan in place before you attend these shows to make the most of your time and find the right suppliers for your business.
Here is a step-by-step guide on how to create a sourcing plan bound with product research that helps you negotiate effectively, secure popular products and grow profit margins:
Step 1: Set your goals
What do you want to achieve by attending the trade show? Here are some possible goals:
Find new suppliers for your existing products
Source new products to add to your range
Negotiate better prices with your current suppliers
Build relationships with potential suppliers
Learn about new trends and technologies in your industry
Once you know your goals, you can start to develop a plan to achieve them.
Step 2: Identify your target suppliers
Do some research to identify potential suppliers who can offer the products or services you need. Use the trade show website to search for exhibitors by category or keyword. You can also contact trade associations or government agencies in your industry to get recommendations for suppliers.
When identifying your target suppliers, consider the following factors:
Product quality: Make sure that the suppliers you choose have a good reputation for product quality.
Price: Get quotes from multiple suppliers to compare prices.
Delivery time: Find out how long it will take for suppliers to deliver your products.
Payment terms: Make sure that the suppliers you choose offer payment terms that are acceptable to you.
Step 3: Create a product list
Make a list of the specific products or services you are interested in sourcing at the event. This will help you to stay focused and organised when you are at the trade show.
Your product list should include the following information:
Product name
Product description
Product specifications
Minimum order quantity (MOQ)
Target price
If you don’t have a specific set of products in mind think about sub-categories like Pet supplies and characteristics like, shipping weight and/or cost that your business can support.
Step 4: Research your products
Before you attend, take some time to research the products you are interested in sourcing. This will help you to understand the market and to ask informed questions of potential suppliers.
Bringing data to sourcing discussions shows suppliers that you are a serious buyer and that you have done your research.
Some key data points to show suppliers to help them understand what the demand for their products are in the open market
The top-selling products and categories on eBay
The average sales and prices for different types of products
The average gross margin for different products and categories
The listings of your competitors
By sharing this data with suppliers, you can show them that you are knowledgeable about the market and that you are serious about buying quality products and aren’t likely to fall for a weak sales pitch. This can also help to build trust and transparency in the negotiation process and a more strategic long term partnership.
Here is an example of how you could use ShelfTrend data to negotiate with a supplier:
Imagine that you are interested in sourcing fitness trackers. You have used ShelfTrend to identify a particular fitness tracker that you want to source, and you have found a supplier who sells it.
Before you start negotiating with the supplier, you use the ShelfTrend to research the average weekly sales prices for the fitness tracker and the listings of what competitor brands are selling.
Once you have this information, you are ready to start negotiating with the supplier. You can show the supplier the report and explain that you are willing to buy a large quantity of fitness trackers or have an idea for a new type of fitness tracker with new features if they can fulfil your requirements
The supplier might also be able to do this research for you and propose ideas as part of a longer term partnership that uncovers opportunity for both sides
Step 5: Set a budget
Determine your budget for sourcing and analyze the total cost of ownership (TCO). This includes not just the purchase price but also factors like:
Shipping Costs: Factor in transportation costs, whether it's for importing goods from overseas or moving products from one location to another. Shipping costs can vary significantly based on the shipping method, distance, and volume.
Customs Duties and Taxes: When importing products internationally, customs duties and taxes can add a substantial amount to the cost. Research the applicable tariffs and import duties to accurately estimate these expenses.
Handling and Storage: Consider the costs associated with handling the products upon arrival, such as unloading, unpacking, and storage. Efficient handling and storage can reduce operational expenses.
Quality Control and Inspection: It's essential to maintain quality standards. Include the costs associated with inspections and quality control processes to ensure that the received goods meet your specifications.
Lead Times: Longer lead times can lead to higher holding costs, tying up capital in inventory. Assess the financial impact of longer lead times on your working capital requirements.
Inventory Holding Costs: This includes the costs of storing inventory, such as warehousing, utilities, insurance, and depreciation. The longer you hold inventory, the higher these costs become.
Risk Mitigation Costs: Account for costs related to risk mitigation strategies, such as insurance against supply chain disruptions or quality issues. These costs can protect your business from unexpected challenges.
Quality Issues and Returns: Anticipate the costs associated with potential quality issues and product returns. This may include shipping costs for returns, restocking fees, and lost revenue due to unsellable products.
Currency Exchange Risk: If dealing with international suppliers, fluctuations in currency exchange rates can impact costs. Consider using hedging strategies to mitigate currency risk.
By starting with these 5 steps, you can create a sourcing plan that will help you to find and build long term productive relationships.