In recent years, Turkey has become one of the cheapest location of manufacturing. Thanks to Turkey's large population and labor force, manufacturing costs are one of the most advantageous in the world. Turkey is the cheapest location for American and European retailers and manufacturers to source goods or parts.
Those companies that cannot afford to establish overseas offices or manufacturing operations can effectively and efficiently source suppliers in Turkey.
Verify Suppliers
It is essential to perform adequate diligence on potential suppliers. The information provided by a potential supplier on its website and other media channels is a good start, but you need to verify whether a supplier in fact exists and is what it claims to be.
This verification can be done in a number of ways. Arrange a visit to the relevant local government agency to check the company’s registration. You need to know whether the supplier has the necessary production capability, certificates, and communication and technology skills to meet your expectations in terms of quality, quantity, and delivery times. You also need to confirm in some fashion the supplier’s financial statements by, for example, requesting audited statements from the supplier, or at least requesting statements prepared by a reputable Turkish accounting firm, in order to get a sense of the potential supplier’s assets and capital base to estimate whether you would be able to recover any loss should a contractual dispute arise.
Buying Directly from Suppliers
Once you are able to identify, verify, and vet a potential supplier, you can buy products directly from them or through a B2B sourcing platform. Buying directly from suppliers can save you money if everything goes smoothly, but it also leaves you open to the risk of being scammed or not getting your money back if the products turn out to be of poor quality.
Another important issue is the type of payment. Safer payment options include paying through a bank letter of credit issued by your bank or an escrow with a reputable third party. Other higher-risk payment options such as credit cards, wire transfers, or similar payment methods can also be used, but many of these methods do not always provide reliable dispute mechanisms to recover payments when fraud or other contractual problems arise.
Sourcing Agent
If buying directly from a supplier sounds like too much trouble and risk, you can seek help from a Turkey sourcing agent who has sourcing experience. These agents can help identify and verify suppliers and facilitate communications.
If you want someone who can help you with the entire sourcing process from end-to-end, hire a sourcing service provider, which can provide a wide range of services: supplier identification, price negotiation, supply management, quality control management, logistics and shipment management, and other sourcing matters in Turkey.
Sourcing service providers charge certain fees for managing purchase transactions, but there are pluses and minuses to consider. On the plus side, a sourcing service provider can relieve you of the hassle of identifying and verifying suppliers, production inspection, product quality control, and logistics arrangement. However, using such a service denies you the opportunity to learn about the Turkish manufacturers markets.
Trading Company
A trading company may be a good option if you want to buy a small amount of products and don’t wish to deal with all the complexities of sourcing in Turkey. The trade-off is that your costs will generally be higher, as a trading company will make a margin on the goods being sourced. You will also find it hard to discover information about the supply chain, and you will still need to be on the lookout for product quality issues.
Sourcing goods in Turkey poses many risks for companies, ranging from poor quality goods to fraud to difficulty in enforcing contracts. Of course, all of these risks are not unique to Turkey but because it is still a developing country, the potential for such risks are often much greater than in developed countries. However, the potential for significant cost reductions may make this risk worth it as long as you do your research beforehand and proceed with caution.
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