Procuring quality and affordable raw materials is critical to staying competitive in the manufacturing sector. In this article, we will cover all processes of raw material procurement from abroad.
Why Raw Materials from Abroad?
Advantages
- Cost Advantage: Some raw materials are more economical abroad
- Quality Variety: Different quality options
- Supply Security: Creating alternative sources
- Technological Superiority: Advanced production techniques
Points to Consider
- Currency risk
- Logistics costs
- Delivery times
- Minimum order quantities
Supplier Research
Supplier Finding Channels
Online Platforms:
- Alibaba
- Global Sources
- Made-in-China
- ThomasNet
Traditional Channels:
- Sectoral fairs
- Chambers of commerce
- Sector associations
- Trade attachés
Supplier Evaluation
Priority Criteria:
-
Production Capacity
- Monthly production quantity
- Capacity expansion potential
- Machine park age
-
Quality Standards
- ISO certificates
- Sectoral documents
- Test reports
-
Financial Status
- Company size
- Business continuity
- Financial stability
-
References
- Existing customers
- Export experience
- Turkey market experience
Quality Control Processes
Pre-Production
- Clarify raw material specifications
- Determine acceptance/rejection criteria
- Complete sample approval process
- Sign quality agreement
During Production
- Request regular production reports
- Plan interim inspections
- Monitor process changes
Pre-Shipment
- Have PSI (Pre-Shipment Inspection) done
- Review test reports
- Check packaging quality
- Verify documents
Pricing and Cost Analysis
Total Cost Calculation
Total Cost = Product Price + Freight + Insurance +
Customs Duties + VAT +
Logistics Costs + Finance Expenses
Price Comparison
- Compare on FOB price basis
- Evaluate quality differences
- Consider minimum order quantities
- Account for payment conditions
Payment and Financing
Payment Methods
Secure Options:
- Letter of Credit (LC)
- Escrow services
- Trade assurance (on online platforms)
Risk Assessment:
- Supplier history
- Order amount
- Relationship duration
Financing Options
- Import credits
- Currency forward contracts
- Eximbank supports
Logistics Management
Transport Planning
Container Selection:
- 20’ container: ~28-30 m³
- 40’ container: ~58-60 m³
- 40’ HC container: ~68-70 m³
Transit Times:
- China-Turkey (sea): 30-35 days
- Europe-Turkey (road): 5-10 days
- Far East-Turkey (air): 3-5 days
Stock Management
- Safety stock calculation
- Lead time analysis
- Seasonal fluctuations
- EOQ (Economic Order Quantity)
Risk Management
Supply Risk
Mitigation Strategies:
- Develop alternative suppliers
- Create stock buffers
- Long-term contracts
- Geographic diversification
Quality Risk
- Third-party inspection
- Sample procedure
- Quality agreements
- Performance tracking
Currency Risk
- Forward contracts
- Option contracts
- Natural hedging
- Price adjustment clauses
Regulations and Compliance
Import Permits
For some raw materials:
- Ministry permit
- TSE compliance
- Health certificate
- CITES certificate (natural products)
Origin Rules
- FTA (Free Trade Agreement) advantages
- Origin cumulation
- Preferential tariff application
Conclusion
Raw material procurement from abroad can provide significant competitive advantage to your business with proper planning and management. As Gökçe Trade, we provide professional support in your procurement processes.
Contact us for your raw material procurement needs.