Skill: leooooooow/aes-product-sourcing-advisor (version 1.1.0)

--- 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

path: references/output-template.md
content: # Product Sourcing Evaluation Report

## 1. Product Overview

| Field | Details |
|---|---|
| Product Name | [Product name] |
| Category | [Product category] |
| Target Landed Cost | $[X.XX] per unit |
| Annual Volume Forecast | [X,XXX] units |
| Destination Market | [Country/region + fulfillment method] |
| Required Certifications | [List all required certs] |

### Product Specifications
- Materials: [Primary and secondary materials]
- Dimensions: [L x W x H, weight]
- Packaging Requirements: [Individual + master carton specs]
- Custom Elements: [Logos, prints, custom molds, colors]
- Non-Negotiable Requirements: [List hard requirements]
- Flexible Requirements: [List areas with room for trade-offs]

---

## 2. Sourcing Region Analysis

### Region 1: [Region Name, Country]
- **Manufacturing Strength:** [Why this region is suitable]
- **Product Category Expertise:** [Relevant industry clusters]
- **Trade Agreement Status:** [Tariffs, FTAs, duties applicable]
- **Logistics Infrastructure:** [Port access, shipping routes, transit times]
- **Risk Factors:** [Political stability, currency volatility, natural disasters]
- **Suitability Rating:** High / Medium / Low

### Region 2: [Region Name, Country]
[Same structure as above]

### Region 3: [Region Name, Country]
[Same structure as above]

---

## 3. Supplier Profiles

### Supplier A: [Company Name]
| Field | Details |
|---|---|
| Location | [City, Province, Country] |
| Years in Business | [X years] |
| Export Experience | [X years, key markets] |
| Factory Size | [Square meters, number of workers] |
| Annual Capacity | [Units per year for this product type] |
| Certifications | [ISO, FDA, CE, etc.] |
| Key Clients | [Notable brands/retailers if disclosed] |
| MOQ | [Minimum order quantity] |
| Payment Terms | [Standard terms offered] |
| Sample Cost | [$X.XX, lead time for samples] |

### Supplier B: [Company Name]
[Same structure]

### Supplier C: [Company Name]
[Same structure]

---

## 4. Quotation Comparison Matrix

| Line Item | Supplier A | Supplier B | Supplier C |
|---|---|---|---|
| FOB/FCA Price (MOQ) | $X.XX | $X.XX | $X.XX |
| FOB/FCA Price (2x MOQ) | $X.XX | $X.XX | $X.XX |
| FOB/FCA Price (5x MOQ) | $X.XX | $X.XX | $X.XX |
| Packaging Cost | $X.XX | $X.XX | $X.XX |
| Sample Cost | $X.XX | $X.XX | $X.XX |
| Mold/Setup Fee | $X.XX | $X.XX | $X.XX |
| Production Lead Time | XX days | XX days | XX days |
| Payment Terms | [Terms] | [Terms] | [Terms] |

---

## 5. Landed Cost Breakdown

| Cost Component | Supplier A | Supplier B | Supplier C |
|---|---|---|---|
| Unit Price (FOB/FCA) | $X.XX | $X.XX | $X.XX |
| Packaging/Labeling | $X.XX | $X.XX | $X.XX |
| Inland Freight to Port | $X.XX | $X.XX | $X.XX |
| Port/Terminal Charges | $X.XX | $X.XX | $X.XX |
| Ocean/Air Freight | $X.XX | $X.XX | $X.XX |
| Cargo Insurance | $X.XX | $X.XX | $X.XX |
| Customs Duties | $X.XX | $X.XX | $X.XX |
| Anti-Dumping/Section 301 | $X.XX | $X.XX | $X.XX |
| Customs Brokerage | $X.XX | $X.XX | $X.XX |
| Last-Mile/FBA Inbound | $X.XX | $X.XX | $X.XX |
| Defect Replacement Cost | $X.XX | $X.XX | $X.XX |
| **Total Landed Cost** | **$X.XX** | **$X.XX** | **$X.XX** |
| **Gross Margin at $[SP]** | **XX%** | **XX%** | **XX%** |

---

## 6. Weighted Supplier Scorecard

| Criteria | Weight | Supplier A | Supplier B | Supplier C |
|---|---|---|---|---|
| Cost Competitiveness | 25% | X/10 | X/10 | X/10 |
| Quality & Certifications | 25% | X/10 | X/10 | X/10 |
| Lead Time & Reliability | 15% | X/10 | X/10 | X/10 |
| Communication & Responsiveness | 10% | X/10 | X/10 | X/10 |
| Risk Profile | 15% | X/10 | X/10 | X/10 |
| Scalability & Flexibility | 10% | X/10 | X/10 | X/10 |
| **Weighted Total** | **100%** | **X.XX** | **X.XX** | **X.XX** |

---

## 7. Risk Assessment

| Risk Category | Impact | Probability | Mitigation |
|---|---|---|---|
| Tariff/Trade Policy Change | [H/M/L] | [H/M/L] | [Strategy] |
| Quality Failure | [H/M/L] | [H/M/L] | [Strategy] |
| Supply Chain Disruption | [H/M/L] | [H/M/L] | [Strategy] |
| Currency Fluctuation | [H/M/L] | [H/M/L] | [Strategy] |
| IP/Design Theft | [H/M/L] | [H/M/L] | [Strategy] |
| Regulatory/Compliance | [H/M/L] | [H/M/L] | [Strategy] |

---

## 8. Recommendation

### Primary Supplier: [Supplier Name]
- **Rationale:** [2-3 sentences explaining why this supplier is recommended]
- **Starting Order:** [Recommended first order quantity and terms]
- **Negotiation Strategy:** [Key points to negotiate — price, payment terms, quality guarantees]

### Backup Supplier: [Supplier Name]
- **Rationale:** [Why this supplier serves as the backup]
- **Activation Trigger:** [Under what circumstances to switch to backup]

### Implementation Roadmap
1. [Week 1-2] Finalize terms with primary supplier, sign purchase agreement
2. [Week 2-3] Order pre-production samples for final approval
3. [Week 3-4] Approve samples, place first production order
4. [Week X] Arrange third-party inspection at 80% production completion
5. [Week X] Ship, clear customs, receive inventory
6. [Ongoing] Track KPIs — defect rate, on-time delivery, communication quality

---

## 9. Appendix

- Supplier quotation documents
- Sample evaluation photos/notes
- Certification copies
- Freight rate quotes
- Duty/tariff rate references


path: references/landed-cost-guide.md
content: # Landed Cost Calculator Guide

## What Is Landed Cost?

Landed cost is the total cost of a product delivered to your warehouse or fulfillment center. It includes every expense from the factory floor to your shelf: unit price, packaging, freight, insurance, duties, taxes, and handling fees. Comparing suppliers on FOB price alone is the most common sourcing mistake — two suppliers with a $0.50 FOB price difference can end up with nearly identical landed costs after duties and freight.

## Landed Cost Formula

```
Landed Cost = Unit Price (FOB/FCA)
            + Packaging & Labeling
            + Inland Freight (factory to port)
            + Port/Terminal Handling
            + International Freight (ocean or air)
            + Cargo Insurance
            + Customs Duties & Tariffs
            + Customs Brokerage Fees
            + Last-Mile Delivery (port to warehouse)
            + Defect/Return Allowance
```

## Component-by-Component Breakdown

### 1. Unit Price (FOB/FCA)
The price quoted by the supplier for the product delivered to the port of origin (FOB) or their facility (FCA). Always confirm what is included: Does the quote include packaging? Inner boxes? Master carton?

**Tip:** Request quotes at 3+ volume tiers (MOQ, 2x MOQ, 5x MOQ). Price drops of 5-15% are common at higher volumes.

### 2. Packaging & Labeling
Costs for individual product packaging (poly bags, boxes, inserts), master carton packaging, and any required labeling (FBA labels, CE marks, country of origin stickers). Some suppliers include basic packaging in their FOB price; custom packaging is always extra.

**Typical costs:**
- Poly bag: $0.02-0.05/unit
- Custom printed box: $0.15-0.80/unit
- Insert cards: $0.03-0.10/unit
- Master carton: $0.30-1.00/carton (divide by units per carton)

### 3. Inland Freight
Transportation from the factory to the port of export. In China, this ranges from negligible (factory near port) to significant (inland provinces like Sichuan to Shenzhen).

**Typical costs:**
- Same province as port: $0.01-0.05/unit
- Cross-province (e.g., Zhejiang to Shanghai): $0.05-0.15/unit
- Inland to coast (e.g., Chengdu to Shenzhen): $0.15-0.40/unit

### 4. Port/Terminal Handling
Charges at the origin port for container handling, documentation, and loading. Usually quoted per container or per CBM.

**Typical costs:** $0.02-0.10/unit (varies by shipment size)

### 5. International Freight

#### Ocean Freight (most common for ecommerce)
Charged per CBM (cubic meter) for LCL (Less than Container Load) or per container for FCL (Full Container Load).

**Typical rates (2024-2025 ranges):**
- LCL China to US West Coast: $40-80/CBM
- LCL China to US East Coast: $60-100/CBM
- LCL China to EU (Hamburg): $50-90/CBM
- 20ft FCL China to US West Coast: $2,000-4,500
- 40ft FCL China to US West Coast: $3,500-7,000

**Transit times:**
- China to US West Coast: 14-20 days
- China to US East Coast: 25-35 days
- China to EU: 28-38 days
- Vietnam to US West Coast: 18-25 days

#### Air Freight (for urgent/high-value/lightweight items)
Charged per kg with a volumetric weight calculation (L x W x H / 6000).

**Typical rates:**
- China to US: $4-8/kg
- China to EU: $3-7/kg

**When to use air:** Product value > $15/unit, time-sensitive launch, lightweight items where per-unit air cost < 10% of product value.

### 6. Cargo Insurance
Covers loss or damage during international transit. Standard marine cargo insurance costs 0.3-0.5% of the declared shipment value (CIF).

**Formula:** Insurance = CIF Value × 0.003 to 0.005

### 7. Customs Duties & Tariffs

#### United States
- Find your product's HTS code at hts.usitc.gov
- Standard duty rates range from 0% to 25%+
- Section 301 tariffs add 7.5-25% on many Chinese goods
- De minimis threshold: $800 (shipments under this value are duty-free)

#### European Union
- Find your product's CN code
- Standard duty rates vary by product category
- Anti-dumping duties may apply to specific product categories
- VAT (19-27% depending on country) is due at import

**Formula:** Duty = (FOB Price + Freight + Insurance) × Duty Rate

### 8. Customs Brokerage
Fee paid to a licensed customs broker to handle import documentation and clearance.

**Typical costs:**
- US: $100-250 per entry (divide by units in shipment)
- EU: €75-200 per entry
- Per-unit impact depends on shipment size

### 9. Last-Mile Delivery
Transportation from the destination port to your warehouse or fulfillment center.

**Typical costs:**
- Port to local warehouse (within 50 miles): $0.05-0.15/unit
- Port to Amazon FBA warehouse: $0.10-0.30/unit (includes drayage + delivery appointment)
- Cross-country delivery (e.g., LA port to East Coast warehouse): $0.20-0.60/unit

### 10. Defect/Return Allowance
Build in expected cost of defective units based on the supplier's defect rate history or industry averages.

**Formula:** Defect Cost = Unit Landed Cost × Expected Defect Rate

**Typical defect rates:**
- Excellent supplier (established relationship): 0.5-1.5%
- Good supplier (verified factory): 1.5-3%
- New/unverified supplier: 3-8%

## Worked Example

**Product:** Silicone phone case, sourced from Shenzhen, China → US (Amazon FBA, California warehouse)

| Component | Calculation | Cost/Unit |
|---|---|---|
| FOB Price | Quoted | $1.20 |
| Packaging | Custom box $0.25 + poly bag $0.03 | $0.28 |
| Inland Freight | Factory in Shenzhen, near port | $0.02 |
| Ocean Freight (LCL) | $55/CBM ÷ 800 units/CBM | $0.07 |
| Insurance | ($1.20 + $0.07) × 0.004 | $0.01 |
| Customs Duty | HTS 3926.90 at 3.4% of ($1.20 + $0.07 + $0.01) | $0.04 |
| Section 301 Tariff | 25% of ($1.20 + $0.07 + $0.01) | $0.32 |
| Customs Brokerage | $150 ÷ 5,000 units | $0.03 |
| Last-Mile (FBA) | $0.15/unit average | $0.15 |
| Defect Allowance | $2.12 × 2% | $0.04 |
| **Total Landed Cost** | | **$2.16** |

The FOB price is $1.20, but the landed cost is $2.16 — an 80% increase. Without the Section 301 tariff, landed cost would be $1.84, making tariff analysis critical for China-sourced products.

## Quick Estimation Multipliers

When you need a rough landed cost estimate before detailed calculation:

| Route | No Extra Tariffs | With Section 301 (25%) |
|---|---|---|
| China → US West Coast | FOB × 1.45-1.55 | FOB × 1.70-1.85 |
| China → US East Coast | FOB × 1.50-1.65 | FOB × 1.75-1.95 |
| China → EU | FOB × 1.40-1.55 | N/A (different tariff structure) |
| Vietnam → US | FOB × 1.40-1.50 | N/A (no Section 301) |
| India → US | FOB × 1.45-1.60 | N/A (no Section 301) |
| Turkey → EU | FOB × 1.20-1.35 | N/A (customs union) |

These multipliers include average freight, duties, and handling but exclude special tariffs or unusually heavy/bulky products.


path: references/supplier-criteria.md
content: # Supplier Evaluation Criteria

## Scoring Rubrics by Dimension

### 1. Cost Competitiveness (Recommended Weight: 25%)

Evaluates the supplier's landed cost relative to competitors and your target cost.

| Score | Criteria |
|---|---|
| 9-10 | Landed cost 10%+ below target; best price among all evaluated suppliers; volume discount tiers available |
| 7-8 | Landed cost within 5% of target; competitive with top suppliers; some room for negotiation |
| 5-6 | Landed cost meets target but no margin buffer; middle of the pack among suppliers |
| 3-4 | Landed cost 5-15% above target; would need significant negotiation or volume increase to be viable |
| 1-2 | Landed cost 15%+ above target; not cost-competitive for this product category |

**Data Sources:** FOB quotation, freight estimates, duty calculations, payment term value

**Red Flags:** Price significantly below market (quality corners being cut), no volume discounts available, hidden fees in payment terms

### 2. Quality & Certifications (Recommended Weight: 25%)

Evaluates the supplier's ability to consistently deliver product that meets your quality standards.

| Score | Criteria |
|---|---|
| 9-10 | ISO 9001 + product-specific certs (FDA, CE, UL); documented QC process; <2% defect rate; willing to share factory audit reports; successful sample evaluation |
| 7-8 | Relevant product certifications; reasonable QC process; 2-4% defect rate; satisfactory sample quality |
| 5-6 | Basic certifications only; QC process exists but undocumented; 4-6% defect rate; samples required minor revisions |
| 3-4 | Missing key certifications; limited QC documentation; 6-10% defect rate or no defect data; samples had notable issues |
| 1-2 | No relevant certifications; no formal QC process; >10% defect rate or product fails basic quality tests |

**Data Sources:** Certification copies, factory audit reports (BSCI, Sedex, SA8000), sample evaluation results, third-party inspection reports, customer references

**Red Flags:** Reluctance to provide samples, no third-party inspection allowed, certifications that can't be verified, unwillingness to discuss defect rates

### 3. Lead Time & Reliability (Recommended Weight: 15%)

Evaluates total time from order to delivery and the supplier's track record for on-time fulfillment.

| Score | Criteria |
|---|---|
| 9-10 | Total lead time (production + shipping) under 30 days; 95%+ on-time delivery history; proactive shipment tracking provided |
| 7-8 | Total lead time 30-45 days; 85-95% on-time delivery; regular production updates |
| 5-6 | Total lead time 45-60 days; 75-85% on-time delivery; updates provided when requested |
| 3-4 | Total lead time 60-90 days; 60-75% on-time delivery; limited communication during production |
| 1-2 | Total lead time 90+ days; <60% on-time delivery; frequent delays with poor communication |

**Data Sources:** Quoted production time, shipping transit time estimates, historical on-time delivery data, reference checks with other buyers

**Key Considerations:**
- Factor in seasonal delays (Chinese New Year adds 3-4 weeks, Ramadan affects Middle East/South Asia)
- Port congestion patterns (US West Coast peaks in Q3-Q4)
- Supplier's current capacity utilization (overbooked factories miss deadlines)

### 4. Communication & Responsiveness (Recommended Weight: 10%)

Evaluates the ease and quality of communication with the supplier.

| Score | Criteria |
|---|---|
| 9-10 | Fluent English (or your language); responds within 4 hours during business days; dedicated account manager; proactive about issues |
| 7-8 | Good English; responds within 8 hours; consistent point of contact; addresses concerns when raised |
| 5-6 | Functional English; responds within 24 hours; communication sometimes requires follow-up for clarity |
| 3-4 | Basic English with frequent misunderstandings; 24-48 hour response time; no consistent point of contact |
| 1-2 | Language barrier causes regular miscommunication; 48+ hour response time; difficult to reach |

**Data Sources:** Response time during RFQ process, email/message quality, video call capability, timezone overlap assessment

**Key Considerations:**
- Timezone overlap: At least 2-3 hours of shared working hours is ideal
- Communication tools: WeChat (China), WhatsApp (global), email
- Escalation path: Can you reach management if issues arise?

### 5. Risk Profile (Recommended Weight: 15%)

Evaluates geopolitical, logistical, and business risks associated with the supplier and their region.

| Score | Criteria |
|---|---|
| 9-10 | Politically stable region; no extra tariffs; multiple shipping route options; diversified client base; financially stable |
| 7-8 | Generally stable with minor risk factors; standard tariff regime; adequate logistics infrastructure |
| 5-6 | Some notable risks (trade tensions, single port dependency); manageable with planning |
| 3-4 | Significant risk factors (active trade disputes, political instability, limited logistics options); requires active mitigation |
| 1-2 | High-risk environment (sanctions risk, active conflict, severe infrastructure limitations); sourcing here requires strong justification |

**Risk Categories to Evaluate:**
- **Trade Policy:** Tariffs, anti-dumping duties, sanctions, trade agreement changes
- **Geopolitical:** Political stability, regional conflicts, diplomatic relations
- **Natural Disaster:** Earthquake, typhoon, flood risk for the specific region
- **Currency:** Exchange rate volatility and hedging options
- **Single Point of Failure:** Is this the only viable supplier in the region?
- **IP Protection:** Legal framework for intellectual property in the supplier's country
- **Labor/Compliance:** Child labor risk, working condition standards, environmental compliance

### 6. Scalability & Flexibility (Recommended Weight: 10%)

Evaluates the supplier's ability to grow with your business and adapt to changing requirements.

| Score | Criteria |
|---|---|
| 9-10 | Can handle 5-10x your current volume; flexible MOQ for new SKUs; willing to hold safety stock; multiple production lines |
| 7-8 | Can handle 3-5x current volume; reasonable MOQ flexibility; open to inventory programs |
| 5-6 | Can handle 2-3x current volume; standard MOQ with some negotiation room |
| 3-4 | Limited growth capacity (1.5-2x current volume); rigid MOQ; slow to adapt to spec changes |
| 1-2 | Already near capacity; high rigid MOQ; unwilling or unable to accommodate changes |

**Data Sources:** Factory capacity data, current utilization rate, number of production lines, willingness to discuss growth plans

## Composite Score Calculation

```
Composite Score = (Cost Score × 0.25) + (Quality Score × 0.25) + (Lead Time Score × 0.15) 
                + (Communication Score × 0.10) + (Risk Score × 0.15) + (Scalability Score × 0.10)
```

### Interpretation Guide

| Composite Score | Recommendation |
|---|---|
| 8.0-10.0 | Strong candidate — proceed to negotiation and sample order |
| 6.5-7.9 | Viable candidate — suitable as primary or backup supplier depending on competition |
| 5.0-6.4 | Marginal — consider only if better options are unavailable or as emergency backup |
| Below 5.0 | Not recommended — significant weaknesses outweigh potential benefits |

### Weight Adjustment Guidelines

Adjust weights based on your business situation:
- **Price-sensitive launch:** Increase Cost to 35%, reduce Communication and Scalability
- **Premium brand:** Increase Quality to 35%, reduce Cost to 15%
- **Fast-moving trends:** Increase Lead Time to 25%, reduce Scalability
- **High-risk category:** Increase Risk to 25%, reduce Cost to 20%
- **Rapid growth phase:** Increase Scalability to 20%, reduce Lead Time to 10%


path: assets/quality-checklist.md
content: # Product Sourcing Quality Checklist

## A. Pre-Sourcing Preparation (8 items)
- [ ] Product specifications documented with materials, dimensions, weight, and tolerances
- [ ] Target landed cost calculated with margin requirements
- [ ] Required certifications identified for destination market (FDA, CE, CPSC, REACH, etc.)
- [ ] Annual volume forecast prepared with seasonal breakdown
- [ ] Non-negotiable vs. flexible requirements clearly separated
- [ ] Packaging and labeling requirements specified (FBA prep, barcodes, inserts)
- [ ] Reference samples or detailed product photos prepared for suppliers
- [ ] Budget for samples, molds, and tooling fees allocated

## B. Supplier Screening (7 items)
- [ ] Minimum 3 suppliers identified across at least 2 different regions
- [ ] Supplier business license and export license verified
- [ ] Years in business and export experience confirmed (minimum 3 years recommended)
- [ ] Production capacity validated against your volume requirements
- [ ] Relevant certifications requested and verified (not expired, matches factory)
- [ ] Initial communication responsiveness evaluated (response time, language quality)
- [ ] Online presence and reputation checked (trade platforms, reviews, references)

## C. Quotation Analysis (6 items)
- [ ] Standardized RFQ sent to all suppliers with identical specifications
- [ ] Quotes received at 3+ volume tiers (MOQ, 2x, 5x)
- [ ] All quotes normalized to same Incoterm (FOB or FCA) for fair comparison
- [ ] Payment terms documented and compared (T/T split, L/C, trade assurance)
- [ ] Sample costs and mold/tooling fees itemized separately
- [ ] Hidden costs identified (packaging upcharges, color/material premiums, rush fees)

## D. Landed Cost Calculation (8 items)
- [ ] FOB/FCA price confirmed with all inclusions documented
- [ ] Packaging and labeling costs calculated per unit
- [ ] Inland freight from factory to port estimated
- [ ] International freight quoted (ocean LCL/FCL or air) with transit time
- [ ] Cargo insurance calculated (0.3-0.5% of CIF value)
- [ ] Customs duties calculated using correct HTS/CN code
- [ ] Special tariffs checked (Section 301, anti-dumping, countervailing duties)
- [ ] Last-mile delivery cost estimated (port to warehouse/FBA)

## E. Quality Verification (7 items)
- [ ] Pre-production samples ordered from top 2-3 suppliers
- [ ] Samples evaluated against product specifications checklist
- [ ] Material quality tested (weight, feel, durability, color accuracy)
- [ ] Functionality tested under normal use conditions
- [ ] Packaging quality and protection assessed
- [ ] Certification documentation reviewed for accuracy and validity
- [ ] Defect rate history requested from supplier (or estimated from sample quality)

## F. Risk Assessment (6 items)
- [ ] Trade policy risk evaluated (tariffs, sanctions, trade agreement changes)
- [ ] Geopolitical stability of sourcing region assessed
- [ ] Currency risk impact calculated for 10% exchange rate swing
- [ ] Supply chain redundancy verified (backup supplier identified)
- [ ] Natural disaster and climate risk for factory region reviewed
- [ ] IP protection strategy defined (NNN agreement, design patents in supplier's country)

## G. Supplier Agreement (5 items)
- [ ] Purchase order or supplier agreement drafted with quality standards
- [ ] Defect policy and return/replacement terms specified
- [ ] Production timeline with milestones documented
- [ ] Third-party inspection rights included in agreement
- [ ] Payment milestone schedule tied to production and quality checkpoints

## H. Post-Decision Verification (5 items)
- [ ] Final pre-production sample approved in writing before bulk production
- [ ] Third-party inspection booked at 80% production completion (for orders >$5K)
- [ ] Shipping documents reviewed (commercial invoice, packing list, Bill of Lading)
- [ ] Customs clearance documentation prepared before shipment arrival
- [ ] Supplier performance tracking system set up (delivery time, defect rate, communication)

---

**Total Items: 52**

**Scoring Guide:**
- 48-52 items completed: Comprehensive — sourcing decision well-supported
- 40-47 items completed: Solid — minor gaps, acceptable for experienced sourcing
- 30-39 items completed: Gaps — review missing items before committing to large orders
- Below 30: Insufficient — significant risk of costly surprises, complete more items before ordering


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