Sourcing Desk

If you are building hardware and you need Shenzhen to do what Shenzhen is good at (find the right factory, qualify it, run a pilot, pay people in RMB without your bank flagging every wire), this is the page for you. The sourcing desk is the part of our practice that sits between you and the supply base. It is not a marketplace, not a trading company, and not a sourcing agent who quietly takes 25% off the top.

Who it’s for

The sourcing desk is built for three kinds of operator:

• Hardware founders post-prototype, usually with a working unit and a BOM, looking to move from a benchtop build to a pilot run of 50–2,000 units. You know what you want; you don’t yet know which of the eight quotes in your inbox is real.
• Existing brands diversifying away from a single supplier or a single country. You have product-market fit and you need a second source, sometimes for resilience, sometimes for cost, sometimes because your current factory has started missing dates.
• Industrial buyers and procurement teams at companies who don’t have a permanent China presence but need a credible pair of hands for a specific category (enclosures, batteries, cable assemblies, optics, contract assembly).

If you are pre-prototype, or you want to clone an existing product with the serial numbers filed off, we are not the right fit. We will say so on the first call.

The short version

The work moves through four phases. Most engagements live in the first three; production management is a separate retainer.

Each phase ends with a written go/no-go. You are never locked into the next phase because we ran the previous one.

What you get

The deliverables are concrete. From a discovery sprint you walk away with:

• A supplier shortlist of 3–5 names, with company registration data (统一社会信用代码), founding year, headcount, declared and observed capabilities, primary export markets, and any red flags from open-source checks.
• Comparable quotes in a single spreadsheet: unit price at three volumes (e.g. 100 / 1,000 / 10,000), tooling cost, NRE, lead time, payment terms, MOQ, and what is and isn’t included (packaging, regulatory marks, test reports).
• Factory visit reports with date-stamped photos of the line running similar work, machine list, certificates on the wall, and notes on what we saw versus what they said.
• A written recommendation: which supplier, why, what we’d change about their proposal, and what to watch for on the pilot.
• Bilingual NDA and pilot contract templates you can use as-is or hand to your lawyer.

For pilot and production engagements, add: incoming QC reports with photos and measurements, weekly status notes, a single point of contact in Shenzhen who answers on WeChat in your business hours, and itemised RMB-denominated payment ledgers reconciled to your USD/EUR wires.

Pricing

We charge a flat fee for discovery, a project fee plus visible margin for managed runs, and a monthly retainer plus margin for ongoing work. Margin is shown on every invoice. There is no “favoured customer” rate that we don’t publish.

Travel, shipping, courier, and supplier-side third-party fees (e.g. lab testing, customs brokers) are pass-through at cost with receipts. We don’t mark them up.

A note on the margin model: we prefer a small visible margin over a large invisible one. It keeps incentives aligned. We save you money in supplier negotiations and we capture a slice of the saving, openly. If you’d rather pay a higher flat fee and zero margin, we can quote that structure too; some procurement teams prefer it for audit reasons.

Payment intermediation in plain language

Paying Chinese factories from a Western company is the single most-asked-about part of this service, so let’s be precise.

What we do. You sign an engagement letter that lists the project, the suppliers, and the payment terms. You wire US dollars, euros, or pounds to our operating account (HK or onshore, depending on your bank’s preferences). On receipt, we convert at the day’s mid-market rate plus a disclosed FX fee, and we settle the supplier in RMB from our domestic accounts. You receive a settlement note within 24 hours showing: amount received, FX rate used, fee, supplier name, RMB amount paid, and the bank reference.

Currencies. USD, EUR, GBP, HKD, SGD. We do not settle in crypto.

Transfer times. Receipt to supplier payment is typically 1–3 business days. SWIFT inbound to our account can take 0–2 days depending on the corridor and your bank; domestic CNY out is same-day if cleared before 14:00 Shenzhen time.

Deposit structure. Standard is 30% on PO / 70% on pre-shipment inspection approval. For trusted suppliers we sometimes do 50/50. We do not pay 100% upfront on first orders, ever. If a supplier insists, that’s the negotiation, and usually the moment we go back to the shortlist.

Disclosure. Every transfer is line-itemed. You see the supplier price in RMB, the FX rate, the fee, the management margin (if any), and the total you paid. No “all-in” prices with hidden uplift.

What we are not. We are not a licensed money services business or payment institution. We are a service provider, and these payments are routed against contracted work (sourcing, QC, project management) disclosed in the engagement letter. This model works comfortably up to roughly US$250,000/month per client. Above that, or if your compliance, audit, or banking partner requires a licensed counterparty, we introduce you to a regulated payment provider and step out of the money flow. The QC and supplier work continues unchanged.

Compliance basics. We KYC every client (corporate registration, beneficial ownership, ID for signatories) and every supplier (business licence, bank verification, ultimate owner check). We will not process payments to individuals, shell entities, or anyone on a sanctions list. We keep records for seven years.

What goes wrong, and what we do about it

Five years of running this work in Shenzhen, here are the failures we see most and what is now baked into our process:

• Material swap on production run. Supplier quotes ABS, ships a cheaper blend that looks identical until it cracks in cold weather. Mitigation: pre-production sample sign-off with retained reference part, FTIR or simple float test on incoming material for batches over 1,000 units, and 3-stage incoming QC (sample, mid-production, pre-shipment).
• Counterfeit or relabelled active components, especially BGAs. Mitigation: authorised distributor purchase for ICs above a unit value threshold (we set it at US$2 per component), AOI/X-ray verification for BGAs on pilot runs, and date-code spot checks on every reel.
• Subcontracting to a smaller shop without telling you. Mitigation: contractual right to inspect at any sub-tier, surprise visits on at least one production day per run, and photo evidence of work-in-progress on the audited line.
• MOQ creep after PO. Supplier accepts 500 units, then says they need 2,000 to make tooling work. Mitigation: tooling cost, MOQ, and unit price locked in writing before deposit; if tooling is shared, we get the amortisation schedule in writing.
• Pre-shipment “small change” that breaks regulatory marks. Plug swap, label move, CE/FCC mark in the wrong place. Mitigation: regulatory artwork frozen at sample stage, no changes without written approval, pre-shipment inspection includes a marking and labelling checklist.
• Lead time slippage hidden behind WeChat optimism. Mitigation: weekly status with photo evidence, not words. If we don’t see the part being made, we assume it isn’t.
• IP leakage to competitors. Mitigation: compartmentalised shortlists (no single supplier sees the whole product), bilingual NDA with Chinese-court jurisdiction, and for sensitive designs, splitting the BOM across two factories so neither has a complete unit.

None of this is exotic. It’s the basic hygiene of running production in Shenzhen. The reason it’s worth paying for is that it’s tedious, language-bound, and requires being physically present.

Timeline

A typical end-to-end engagement, from “we have a prototype” to “first 1,000 units on the boat”:

Hardware doesn’t respect calendars; this is a realistic, not optimistic, schedule. We pad it because Chinese New Year, National Day, and the occasional power-rationing week in Guangdong all eat real days.

What we don’t do

A short, honest list. The sourcing desk does not:

• Take kickbacks from suppliers. We have turned down referrers who insisted on them. Our margin is the margin on the invoice.
• Help you clone a competitor’s product. If your “BOM” is a teardown of someone else’s CE-marked unit, we will decline. This is both an ethical and a practical line: IP-thin cloning is the fastest way to make enemies in Shenzhen and to build a product that gets pulled from Amazon six months in.
• Take a hidden margin from your investors. If you bring a delegation through, the day rate is the day rate; we do not double-bill the founder and the fund.
• Run cash payments to suppliers. Everything goes through bank rails with a paper trail.
• Recommend a factory we haven’t physically visited in the last 12 months for that product category.
• Promise a price before we’ve seen the spec. Real quotes need real drawings, BOMs, and tolerances.

If any of those are a deal-breaker for what you’re trying to do, we’ll point you to people who work differently. Better to find out on the first call than the third invoice.

Next step

Two ways to start, depending on where you are:

• You have a spec or a prototype: email it to us via the contact form with a one-paragraph description of what you’re trying to build, what volume, and when you want first units. We reply within two working days with either a discovery-sprint quote or a recommendation to do something else first.
• You want to talk it through first: book a call. Thirty minutes, free, no slide deck. We’ll tell you whether the sourcing desk is the right tool, or whether you’d be better served by a hardware founder tour, a different agent, or a stern WeChat to your existing supplier.

Either way, you’ll know within a fortnight whether Shenzhen is the right place to build your thing, and if it is, who should build it for you.