In international trade, are you often confused about the difference between sourcing and procurement? These two similar words actually have different meanings. After reading the following post, you will have a clear understanding of these words.

What is sourcing?

China sourcing is to select the right supplier by comparing, evaluating, and auditing, then completing the work later including sample production, production follow-up, QC, ship arrangement, etc.

The best value of sourcing companies is to handle the whole sourcing process in China. They help you get a good price, monitor the factories, follow up on orders, and control the quality of your products, thus making everything go smoothly before your cargo leaves China.

For large sourcing companies, a sourcing agent can manage your supply chain very well. For small startups, a sourcing agent is your best choice, especially when you import goods from china for the first time.

What is procurement?

In business, procurement is used more widely. Some large-scale and well-structured companies will have a special procurement department, responsible for purchasing products or services on a large scale.

Procurement is a more strategic and systematic process. It analyzes procurement needs, budget, market, and control risks. It also selects and evaluates suppliers, and maintains good relationships with them. What’s more, it is responsible for cost reduction, new product development, contract management, inventory control, shipping, receiving and storage, etc.

In international trade, most people use sourcing and procurement as synonyms. For example, China sourcing and China procurement both refer to buying products from suppliers in China.

6 steps of sourcing with Jingsourcing as an example

Step 1. Specific sourcing plan

This is the first step of sourcing. As an importer who needs to import goods from China, firstly, you should know what you want to buy. You can submit your requirements through our service page or send us an email, including design drawings, product reference pictures, etc. We will estimate the cost of sourcing or customization based on your project.

Step 2. Supplier selection

Reliable supplier sourcing takes lots of time and effort. It is the most difficult part of sourcing. We will help find suppliers specializing in that item production. Typically, our selected suppliers are located in the industrial cluster. Because compared with suppliers outside the production area, they are professional and can produce at a competitive price.

We will carry out a strict factory audit on the selected suppliers, such as scale and production. Only approved suppliers can produce your goods. This is why many importers trust us.

In addition, many complex products require several factories to work together. For example, for a plush toy, the skin part is produced by a plush toy factory, and the acoustic generator is made by an audio factory. Usually, you can’t find the right supplier by yourself even if you spend a lot of time and energy. That’s the value of sourcing agents. They can help you find the right factories and produce your goods.

Step 3. Sample production and bargaining

We will make samples according to your budget and product requirements. In addition, we will bargain with suppliers to get a competitive price, thus increasing your profit.

Step 4. Contract signing

After confirming the sample and product price, you can place an order, sign the contract and pay the deposit (usually 30%). After that, we ask the factory to start bulk production.

Step 5. Production follow-up

We provide production follow-up and inspection during the production process, to ensure that any problems are found early. At the same time, we are responsible for monitoring and pushing the factory. This ensures the products can meet the agreed delivery deadlines.

Step 6. Quality inspection and shipping

After production, we check the final products to ensure that they are within your required defective rate. If the products exceed the defective rate, we will compensate or coordinate with the factory to fix them. We will arrange shipping to your address after inspection.

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