5 Knowledge about Sourcing Products from China
2022-08-26
Despite the several books on purchasing in the society and so many corporate purchasing training programs, Leelinesourcing recommends getting practical knowledge from those in the industry.
The most basic knowledge of purchasing is usually the most important one. It is also a must for those that are new to the industry.
However, books and training are few and far between.
This is why Leelinesourcing has put together the basics of purchasing for you. These basics have been compiled from what we’ve learned over the years. We hope that it helps you in your new ventures.
1. Why is it not better to buy than to sell?
Purchase expenditures typically account for 53 percent of sales revenue. When purchasing expenses are reduced and the same results obtained, direct labor costs must be reduced by 22% and manufacturing costs by 24%. The management and selling expenses must be reduced by 17%. The sales revenue must increase by 34% if the profit ratio is to remain constant.
From this, we can see that the improvement of profits through the reduction of procurement costs is not easy but also avoids product imitation making it hard for consumers to resist. On the other hand, if the profit is increased by an increase in selling price or sales revenue, it is easy to incur boycott from customers or face the vicious competition in the industry. Therefore, under the current operating environment, the success of purchase is not only related to the normal operation of the enterprise’s production and marketing activities but also directly affects the operating profit, as well as the enterprise’s goodwill and image. It is advised that you buy better than the manner in which you sell.
2. What qualities should a good purchasing person have?
• Justice and honesty
• Fineness of fortune
• Professional dedication
• Modesty and patience
3. What skills should a good buyer have?
Cost consciousness and value analysis ability. They also need to have a predictive ability; expressive ability and professional knowledge.
4. Why do some enterprises or
