Product Sourcing Advisor

SKILL.md

---
name: Product Sourcing Advisor
description: Evaluate potential suppliers and sourcing regions based on cost, quality, lead time, and risk factors.
---

# Product Sourcing Advisor

Evaluate potential suppliers and sourcing regions for ecommerce products by analyzing cost structures, quality indicators, lead times, minimum order quantities, communication reliability, and geopolitical or logistical risk factors to produce a comprehensive sourcing recommendation.

## Quick Reference

| Decision | Strong | Acceptable | Weak |
|---|---|---|---|
| Supplier count | 3-5 suppliers compared across regions | 2 suppliers compared | Single supplier evaluation only |
| Cost analysis depth | Full landed cost including freight, duties, packaging, defect rate | FOB price plus basic shipping estimate | Raw unit price comparison only |
| Quality assessment | Factory audit data, sample testing results, defect rate history | Certifications and sample review | Alibaba ratings or self-reported claims |
| Lead time modeling | Production + inland transit + port + ocean/air + customs + last mile | Production + shipping estimate | Quoted lead time taken at face value |
| Risk evaluation | Political, currency, natural disaster, single-point-of-failure analysis | Basic country risk + backup supplier | No risk assessment |
| Communication scoring | Response time tracking, English proficiency, timezone overlap, escalation path | General responsiveness rating | Gut feeling or single interaction |
| MOQ negotiation | Tiered pricing at 3+ volume levels with negotiation strategy | Two price points compared | Accept quoted MOQ without negotiation |
| Output format | Weighted scorecard with recommendation narrative | Comparison table with notes | Unstructured pros/cons list |

## Solves

1. **Overpaying for products** — Sellers accept the first quoted price without understanding landed cost, missing 15-40% savings available through proper supplier comparison and negotiation
2. **Quality disasters after first bulk order** — Skipping systematic quality evaluation leads to shipments with 10-30% defect rates that destroy margins and seller ratings
3. **Supply chain single points of failure** — Relying on one supplier in one region means one factory closure or port disruption halts your entire business
4. **Hidden cost surprises** — Duties, packaging, inland freight, and defect replacement costs that weren't factored into sourcing decisions erode projected margins
5. **Slow, unreliable lead times** — Poor lead time modeling causes stockouts during peak seasons or excess inventory during slow periods
6. **Communication breakdowns** — Timezone mismatches, language barriers, and unclear escalation paths lead to quality issues and missed deadlines
7. **Compliance and regulatory risk** — Products that don't meet destination market safety standards, labeling requirements, or import regulations get seized at customs

## Workflow

### Step 1: Define Product Requirements
Gather complete product specifications including materials, dimensions, weight, certifications needed, target landed cost, annual volume forecast, and quality standards. Identify which requirements are non-negotiable versus flexible.

**Key inputs:** Product spec sheet, target cost per unit, annual volume, destination market, required certifications (CE, FDA, CPSC, etc.)

### Step 2: Map Sourcing Regions
Identify 3-5 viable sourcing regions based on the product category. Consider established manufacturing hubs (China, Vietnam, India, Turkey, Mexico) and evaluate each region's strengths for the specific product type.

**Key outputs:** Region shortlist with manufacturing capability assessment for each

### Step 3: Identify and Screen Suppliers
For each shortlisted region, identify 2-3 potential suppliers using trade platforms, trade shows, sourcing agents, or industry referrals. Apply initial screening criteria: minimum years in business, export experience, relevant certifications, production capacity.

**Key outputs:** Supplier longlist narrowed to 6-10 qualified candidates

### Step 4: Request and Analyze Quotations
Send standardized RFQ (Request for Quotation) to all shortlisted suppliers. Ensure quotes include FOB price, MOQ at multiple tiers, sample cost, production lead time, payment terms, and packaging specifications.

**Key outputs:** Normalized quotation comparison matrix

### Step 5: Calculate Full Landed Cost
For each supplier, calculate the complete landed cost: unit price + packaging + inland freight + port charges + ocean/air freight + insurance + customs duties + brokerage fees + last-mile delivery. Factor in expected defect rate and replacement cost.

**Key outputs:** Landed cost breakdown per supplier with margin impact analysis

### Step 6: Score and Rank Suppliers
Apply weighted scoring across all evaluation dimensions: cost (25%), quality (25%), lead time (15%), communication (10%), risk (15%), scalability (10%). Generate composite scores and identify the top 2-3 suppliers.

**Key outputs:** Weighted scorecard with rankings and recommendation narrative

### Step 7: Develop Sourcing Strategy
Based on the scored results, recommend a primary supplier and backup supplier. Outline negotiation strategy for MOQ, payment terms, and quality guarantees. Define order splitting strategy if dual-sourcing is recommended.

**Key outputs:** Final sourcing recommendation with implementation roadmap

## Example 1: Private-Label Silicone Kitchen Utensil Set

**Input:**
- Product: 5-piece silicone kitchen utensil set with wooden handles
- Target landed cost: $4.50/set
- Annual volume: 20,000 sets
- Destination: United States (Amazon FBA)
- Required: FDA food-grade silicone certification, LFGB testing

**Region Analysis:**

| Region | Strength | Weakness | Suitability |
|---|---|---|---|
| Guangdong, China | Largest silicone product hub, competitive pricing, established export infrastructure | Tariff exposure (Section 301), longer lead times | High |
| Zhejiang, China | Strong in kitchen products, slightly lower costs than Guangdong | Same tariff concerns, fewer specialized silicone factories | Medium |
| Northern Vietnam | Growing manufacturing, lower labor costs, no Section 301 tariffs | Smaller supplier pool, less silicone expertise | Medium |
| India (Gujarat) | Low labor costs, improving quality infrastructure | Limited silicone manufacturing experience, longer ramp-up | Low |

**Supplier Scoring (Top 3):**

| Criteria (Weight) | Supplier A (Guangdong) | Supplier B (Zhejiang) | Supplier C (Vietnam) |
|---|---|---|---|
| Cost (25%) | 8/10 — $3.20 FOB | 9/10 — $2.95 FOB | 7/10 — $3.45 FOB |
| Quality (25%) | 9/10 — ISO 9001, FDA cert, 1.2% defect rate | 7/10 — FDA cert, 3.1% defect rate | 6/10 — FDA cert pending, no defect history |
| Lead Time (15%) | 7/10 — 35 days production + 22 days shipping | 7/10 — 30 days production + 25 days shipping | 8/10 — 28 days production + 18 days shipping |
| Communication (10%) | 9/10 — English fluent, 4hr response time | 6/10 — Basic English, 24hr response time | 7/10 — Good English, 8hr response time |
| Risk (15%) | 5/10 — Section 301 tariff 25% | 5/10 — Same tariff exposure | 8/10 — No additional tariffs |
| Scalability (10%) | 9/10 — 500K sets/year capacity | 7/10 — 200K sets/year capacity | 5/10 — 80K sets/year capacity |
| **Weighted Score** | **7.55** | **6.85** | **6.75** |

**Landed Cost Comparison:**

| Cost Component | Supplier A | Supplier B | Supplier C |
|---|---|---|---|
| FOB Price | $3.20 | $2.95 | $3.45 |
| Packaging | $0.15 | $0.20 | $0.18 |
| Ocean Freight | $0.42 | $0.45 | $0.35 |
| Duties (incl. 301) | $0.95 | $0.88 | $0.38 |
| Insurance + Brokerage | $0.08 | $0.08 | $0.07 |
| Defect Replacement | $0.04 | $0.09 | $0.10 |
| **Landed Cost** | **$4.84** | **$4.65** | **$4.53** |

**Recommendation:** Supplier C (Vietnam) as primary for cost advantage and tariff avoidance. Supplier A (Guangdong) as backup for quality assurance and scalability. Negotiate Supplier C down to $3.20 FOB at 20K volume commitment with quality improvement milestones.

## Example 2: Custom Printed Yoga Mat

**Input:**
- Product: TPE yoga mat, 6mm, custom full-surface print
- Target landed cost: $8.00/unit
- Annual volume: 10,000 units
- Destination: EU (Germany warehouse)
- Required: REACH compliance, OEKO-TEX Standard 100

**Region Analysis:**

| Region | Strength | Weakness | Suitability |
|---|---|---|---|
| Hebei, China | TPE mat manufacturing hub, advanced printing tech | EU anti-dumping duties on some rubber products | High |
| Taiwan | Premium TPE production, strong IP protection | Higher labor costs, smaller factories | Medium |
| Turkey | EU customs union (no duties), proximity for fast shipping | Limited TPE mat manufacturing experience | Medium |

**Supplier Scoring (Top 2):**

| Criteria (Weight) | Supplier X (Hebei) | Supplier Y (Turkey) |
|---|---|---|
| Cost (25%) | 9/10 — $5.20 FOB | 6/10 — $6.80 FCA |
| Quality (25%) | 8/10 — REACH compliant, 2% defect rate | 7/10 — REACH compliant, 4% defect rate |
| Lead Time (15%) | 6/10 — 25 days prod + 30 days sea | 9/10 — 20 days prod + 7 days truck |
| Communication (10%) | 7/10 — Moderate English | 8/10 — Fluent English, same timezone |
| Risk (15%) | 7/10 — Stable, but tariff risk | 8/10 — EU customs union, no duty risk |
| Scalability (10%) | 9/10 — 200K units/year | 6/10 — 50K units/year |
| **Weighted Score** | **7.75** | **7.15** |

**Recommendation:** Supplier X (Hebei) as primary — landed cost $7.45 versus Supplier Y at $7.90. However, maintain Supplier Y as strategic backup given EU customs union advantage and faster restocking capability for urgent orders.

## Common Mistakes

1. **Comparing FOB prices instead of landed costs** — A supplier quoting $0.50 less FOB may cost more after duties, freight, and defect rates are factored in. Always calculate full landed cost before making sourcing decisions.

2. **Skipping factory audits or sample testing** — Relying on supplier self-reported quality data or platform ratings instead of ordering samples and conducting independent quality checks leads to expensive surprises on the first bulk order.

3. **Ignoring tariff and trade policy changes** — Section 301 tariffs, anti-dumping duties, and changing trade agreements can shift landed costs 10-25% overnight. Build tariff scenario analysis into every sourcing evaluation.

4. **Single-sourcing without a backup** — Even the best supplier can face factory fires, COVID lockdowns, or shipping disruptions. Always identify and qualify at least one backup supplier in a different region.

5. **Accepting quoted lead times at face value** — Quoted production times rarely include delays for material sourcing, holiday shutdowns (Chinese New Year, Ramadan), or port congestion. Add 20-30% buffer to quoted lead times.

6. **Neglecting payment term negotiation** — New sellers often accept 100% TT upfront or 30/70 terms without negotiating. As volume grows, push for 30% deposit with 70% against copy of Bill of Lading, or even net-30 terms.

7. **Not accounting for communication costs** — A supplier 12 timezone hours away with limited English proficiency creates hidden costs in miscommunication, rework, and delayed responses that don't show up in the unit price.

8. **Overlooking packaging and labeling compliance** — Products may meet quality standards but fail destination market labeling requirements (FBA prep, CE marking, country of origin), causing shipments to be held or rejected.

9. **Failing to document supplier agreements** — Verbal agreements about quality standards, defect policies, and production timelines are unenforceable. Always formalize terms in a written supplier agreement or purchase order.

## Resources

- [Output Template](references/output-template.md) — Structured sourcing evaluation report format
- [Landed Cost Calculator Guide](references/landed-cost-guide.md) — Step-by-step landed cost calculation methodology
- [Supplier Evaluation Criteria](references/supplier-criteria.md) — Detailed scoring rubrics for each evaluation dimension
- [Quality Checklist](assets/quality-checklist.md) — Pre-order and post-production quality verification checklist