How Indian businesses source the best supplies

For business owners in India, finding affordable yet high-quality supplies to keep their inventory competitive can be a challenge – one that requires an acquired finesse to navigate. What are the most important tricks you need to learn fast to source supplies that can boost your profits?  

We asked successful Indian entrepreneurs to share their top tips: 

Be strategic about location

Jaydeep Mandal, founder of Aakar Innovations, lists location among his top considerations when sourcing.

A social enterprise, Aakar Innovations has 14 mini factories across India where women produce affordable sanitary napkins. Mandal said each factory sources raw materials locally to reduce production costs and gain a greater profit margin, which is returned to workers. In doing so, his company manages to save a significant amount on transportation costs. 

Secure the best price

Like many entrepreneurs, securing the best price is also among Mandal’s top concerns. To compare prices across a wider range of suppliers, he uses online marketplaces. 

“Nowadays, it’s best to search for supplies online. We search online marketplaces such as Alibaba, but one should know what key words to use,” he said.

“To get the best value for your money, you should also shortlist the most competitive suppliers, and negotiate to get the best deal possible,” Mandal added.

Be exceptionally careful when sourcing raw materials

With over 20 years’ experience of sourcing in India, Rahul Sarkar has perfected the art of pinpointing quality, and now advises manufacturers advises as the president of Phoenix Manufacturing Systems. 

Based on his expertise, he says material grade and production method should be your top considerations. 

Sarkar warns entrepreneurs that material grades may not meet international specifications, and requiring suppliers to provide a match can increase costs. If you can be flexible, he recommends allowing suppliers to suggest the nearest equivalent to your specification.

Likewise, production standards vary. Take extra precautions when sourcing from small smelters, Sarkar says, as these tend to have “loose standards” and can produce materials with issues such as impurities.

Additionally, request for suppliers to show you certificates verifying that their facility produces the required grade. As these documents can essentially be purchased in India, Sarkar also recommends getting a random material sample tested at an independent laboratory to err on the side of caution.

Check suppliers' credentials

Before agreeing to any deal, it’s important to ensure that suppliers are genuine.

Payal Rastogi, founder of carbon footprint management and green building solutions provider CarbonFixers, recommends thoroughly checking suppliers’ credentials. “You can find details about registered private limited companies online,” she says.

Be sure to follow up with a phone call to cross-check important details. Rastogi recommends securing evidence of how old the business is, their total production capacity, as well as any evidence of credit reports, tax certificates and submissions.

She also suggests conducting deeper analysis on your findings to check for discrepancies. “Compare the number of orders they claim against the company’s total turnover and profits,” she advises.  

Watch for warning signs 

Take care when scrutinizing suppliers online. “Don’t believe anything – yes, anything! – you see online when it comes to Indian manufacturing companies,” says Sarkar. “Unfortunately, what you see may simply not be what you get.”

He advises using Google Maps to ensure that manufacturers list genuine addresses. “The satellite view will tell you a lot about the true nature of the suppliers' business,” he explains.

Another red flag to look out for is if suppliers do not include photographs of the production process. Sarkar recommends using Google Images to cross-check any photos that they do have. “Sometimes you’ll be surprised as to what you’ll discover… their images may simply be copied from a competitor,” he says.

Additionally, keep in mind that if the supplier lists a wide range of materials, it indicates that they’re far more likely to be a trader instead of a manufacturer. This may affect the veracity of their product quality claims.

Visit suppliers’ factories 

Finally, Sarkar suggests inspecting suppliers’ facilities – and more than once.

Suppliers with subpar facilities often pass off a more presentable factory (usually owned by a close acquaintance or relative) as their own in order to secure contracts, he explains.

Engaging employees or local third parties to make regular inspections can also go a long way towards weeding out such factories, whose credibility may in fact be little more than a facade.

Now that you know some of the secrets to successfully sourcing for supplies in India, the next step is to get started on stocking up your inventory. Consider beginning your search with Alibaba.com: With millions of products available to choose from, a rigorous verification process for trustworthy suppliers and flexible logistics solutions, you can start shopping with greater peace of mind.

 

 

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