Over the last two weeks, our company, FAO Global, has fielded more than 20 request for COVID-19 related medical supplies around the world. Most of these have been bulk orders above 500 units per item. Due to our connections through our management consulting & advisory practice, we are in a unique position to facilitate purchases for international clients direct from manufacturers. However, purchasing medical supplies has already become a free-for-all and standard terms and protections have been thrown out the window. Our team on the ground is pushing hard to coordinate bulk orders across manufacturers and assuage concerns from weary buyers through due-diligence and verification.
Below our 6-Tips we have consolidated that will help would-be buyers prepare for procurement of supplies in China.
Have a purchase order prepared
Before you request a quote, have a purchase order prepared. You may not know prices but manufacturers are flooded with requests and they won’t take the time to provide an invoice to a casual buyer. Having a purchase order in hand shows your level of seriousness. Remember, nothing happens until funds are deposited.
Request verification
of certification, ISO standards, and any other documentation up front. You will likely receive copies with company names and addresses blurred out. This business is cutthroat and margins matter. Insist you get full-unaltered copies upon deposit.
Payment Terms
Be prepared to wire 50% down within 48 hours and the remaining 50% before shipment (usually 48-72 hours). This is becoming the standard. If you haven’t moved money yet make sure you are ready to wire as soon as you find a price that works. Taking a day or two to decide may lose the deal.
Purchase insurance
The Import-Export Bank can help U.S. firms mitigate risk and many government commercial services have this available. Each country is different and policies vary, but you will want to do what you can to ensure you have some protections.
Coordinate with a shipper or exporter
DHL and FEDEX we hear are reliable. We recommend using air-freight options if you can afford it. Shipping by train or cargo ship can take up to a month or longer. Prices have surged 200-400% since February and nothing can be quoted until you have your supply. Figuring this part out now will save you time when you do make a purchase.
Have a buffer for extra fees
You just never know. Have a buffer of 10-20% built into your budget. This could be to cover commissions, sourcing fees, and unforeseen taxes, shipping issues, etc.
About Brandon Hughes
Brandon is the CEO & Founder of FAO Global, a boutique international consulting firm that enables organizations to execute and expand operations in international markets. Brandon Hughes is former Active Duty Army Officer who specializes in building international partnerships. He has previously served in two global think tanks and has briefed policy and business leaders on the impacts of geopolitical events. Brandon is also a masters graduate from China’s prestigious Tsinghua University holding an LLM in International Relations, a B.S. in International Business, and is completing an Executive MBA from Columbia University in New York.
