The Wonderful World of Sourcing

Written by: | May 2, 2012 | one response

One night last week, I was online looking for a gift for Mother’s Day and I mused at the ease I was able to navigate the many sites evaluating products, pricing and delivery options. I spent a total of 45 minutes comparing sites and narrowing choices and finally placing my purchase in an online shopping cart and entering my credit card information. Presto! 2 days later the item is at my doorstep and my shopping experience is complete.

In our world of sourcing ingredients to make the quality products that we produce here at Essential Wholesale & Labs, we experience a much different reality. It would be so simple to look online and with a few mouse clicks, source the never-ending stream of raw ingredients that are required to maintain our business needs. The reality is that we source about 1700 raw ingredients to manufacture over 8000 formulations and variations of items that we sell on our website and to our Private Label customer base.

Sourcing starts with a mission statement; to buy the best quality ingredients at the best price from the supplier closest to the point of production. Our Purchasing group starts every day looking at future needs and then requesting samples, which we test to ensure compliance with our high quality standards. This often requires calls to multiple vendors around the country and around the world. Our lab then rigorously tests for quality, color, viscosity and chemical make up.  We try to buy direct from the grower or manufacturer to ensure the freshest product and get the best price, which helps to keep our prices to the consumer as low as possible. We attempt to avoid buying from re-sellers as much as possible because we never know how long an item has been sitting in a warehouse before being sold to us. Re-sellers also enjoy making a profit and if we buy from them, it becomes necessary to pass that cost on to our customer. This process can take 1 day to 3 weeks on each and every item we source.  This is relatively painless for normal items; however 20% of the items we source have anomalies.

An anomaly can be anything including weather related like freezes, typhoons, droughts, political unrest, world shortages, or simply a high demand item that acts like a commodity. The 20% of items that fall in this category are usually the high profile items required in a high percentage of formulas in our finished products. Items like this require hours of tracking down suppliers, calls at all times of the day and night and travel around the world.  We source these high profile items in the country of origin as much as we can. We cannot sacrifice quality for an easier sourcing path. You have all seen or read about the shortage of Jojoba Oil, volatile pricing on Coconut Oil, soaring prices of Vegetable Glycerin and so on. We locate the best quality goods and before I sign off on a new supplier, I usually visit the country, factory and plantation to ensure that they meet the highest standards for clean manufacturing. We always ensure that we only support upstanding companies that never violate human rights such as employing child labor or other practices we could not accept in our own home country.

We find that the ingredients we need to make the wonderful natural and organic personal care items that we sell come from very diverse locations. We find ourselves buying from India, Philippines, Malaysia, Ivory Coast, Mexico, Peru, Argentina, Australia, South Africa, Italy, Spain, Bulgaria and China.  While I believe that we should buy US produced goods when available, I also find that many of the items we use are not produced here at all.

The truth about goods sourced anywhere including the USA, is that if you only shop price, you will most likely never have the best quality. I insist on quality first then I negotiate price. It is critical in sourcing to be on top of the world supply issues and act accordingly.

It would be so easy if we could just go online and a few clicks later have the product on our dock. The reality is that sourcing is a complex and time consuming process that requires highly trained individuals working long hours and logging way too many air miles.

Rick Hume
COO
Essential Wholesale & Labs

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