The document provides details of a cosmetics sourcing case study conducted by Dragon Sourcing in Shanghai, China in June 2016. It outlines a thorough sourcing approach involving initial demand analysis, building a long supplier list from various sources, telephone pre-screening of suppliers, administering an RFQ process, auditing shortlisted suppliers, and ultimately placing orders with suppliers and achieving significant cost savings. Key stages of the process included developing an understanding of requirements, screening suppliers, issuing an RFQ, analyzing responses, auditing selected suppliers, and negotiating contracts with qualified suppliers.

1. Cosmetics Sourcing Case Study
Shanghai, June 2016
Dragon Sourcing - 龙 源
Delivering sustainable sourcing value from emerging markets

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Agenda
1. Introduction
2. Sourcing Approach
3. Results

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Context
Background
Client is a leading fashion garment group in Oceania and international market with more than 1500 stores globally, aim to provide
the latest fashion products with right value to their customers, this client assigned DS as the sourcing agency in China for their
accessories sourcing. One brand under this group assigned DS to source the cosmetics in 2015 and 2016.
Scope
This scope is to conduct sourcing across 7 different categories across a number global markets to secure competitive suppliers
Categories:
1.Body Spray Mist & Body Balm
2.Lip Balm & Lip Stick
3.Contour Kit & Blusher Creme
4.Body Bronzer & Sea Salt Spray
5.Brow Kits & Sponge Make Up Applicators &Faux Eyelashes
6.Face Mask & Hair Mask
7.Nail Art Accessory & Nail Wraps &Nail Polish & Nail Buffer
Deliverables:
1.RFQ
2.Recommended suppliers factory photos

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Categories - Body Spray Mist & Body Balm

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Category - Lip Balm & Lip Stick

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Category – Contour Kit & Blusher Creme

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Category – Body Bronzer & Sea Salt Spray

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Category – Brow Kits & Sponge Make Up Applicators &Faux Eyelashes

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1. Category – Face Mask & Hair Mask

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Category – Nail Art Accessory & Nail Wraps &Nail Polish & Nail Buffer

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Agenda
1. Introduction
2. Sourcing Approach
3. Results

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Approach – Phase 1
No. Step Deliverables
1.
Demand Analysis
Work with client to define and understand the products and requirements (specs, volumes, materials,
production technology requirements)
• Project Requirement
Questionnaire
• Kick-Off Report
2.
Supply Analysis
Identify long list of potential suppliers in the selected markets by leveraging B2B Websites, DS
Database, Fair catalogues, Chamber of Commerce, Magazines, Network, References.
• Supplier Long List
3.
Telephone Pre-screening
Selection of suppliers to be included in the RFI/RFP process by telephone pre-screening based on
agreed simple criteria (e.g. capability to make the product, minimum company size, interest in
participating)
• Shortlist for RFI/RFQ
4.
Develop RFI/RFQ
Prepare an RFI/RFQ document, with an aligned Balanced Scorecard that has the objective to pre-
qualify the competitiveness and capabilities of the suppliers, including: Background, financial, Client
and product experience, Quality certification & processes, Social Responsibility,
Manufacturing/technology capability, R&D capability
• RFI/RFQ Template
• Balanced Scorecard
• Introduction Letter
• NDA
Milestone 1: RFI/RFQ & Scorecard Approved
5.
Conduct RFI/RFQ Administration
The RFI/RFQ is translated to the local languages as relevant, and distributed to the relevant suppliers,
with telephone follow-up to push for maximum participation.
• Control Sheet
• Completed RFI/RFQs
6.
Analyze RFI/RFQ Responses
Analysis of RFI/RFQ responses, estimation of logistics costs, and preparation of a report which
profiles & objectively ranks the suppliers by capability and competitiveness, including a
recommendation for those to be audited.
• RFI/RFQ Report
• Supplier Profiles
• Proposed Shortlist for
Audit
Milestone 2: Shortlist for Audit Agreed
Phase 1: Supplier Pre-Qualification

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Approach – Phase 2
No. Step Deliverables
7.
Prepare for Audits
Planning the audit schedule, budget, and drafting the Audit Questionnaire that will be used for the
supplier self-assessment and on-site audits.
• Audit Plan
• Audit Questionnaire
8.
Conduct Audits
Distribution of the Audit Questionnaire to suppliers for their self-assessment (and to get them
prepared), followed by onsite audits, with or without XXX buyers, of all the suppliers. Focus is
management, logistics, production & quality.
• Completed Audit
Questionnaires
9.
Analyse Audit Results
Analysis of the audit results, together with RFI/RFQ results, and preparation of a report that ranks the
suppliers, including a recommendation for those for sample development.
• Audit Report
• Supplier Audit Profiles
• Proposed Shortlist for
Sampling
Milestone 3: Shortlist for Sampling Agreed
10.
Sample Development & Testing
Managing the sample development and testing iterations to determine which suppliers can meet the
quality.
• Samples
• Sample Analysis
Reports
11.
Negotiation & Contracting
Conducting final negotiations with the shortlisted suppliers, and facilitating contracting between
selected suppliers and XXX.
• Contract(s)
Milestone 4: Contracts Secured
Phase 2: Selection & Contracting

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Schedule
Not started Done
In process Delay
Steps 6 - Oct. 13 - Oct. 20 - Oct. 27 - Oct. 3 - Nov. 10 - Nov. 17 - Nov. 24 - Nov.
1. Demand Analysis
2. Supplier Identification
3. Telephone pre-screening
4. Develop RFI/RFQ
5. Administer RFI/RFQ
6. Analyze RFI/RFQ Responses
1 RFI/RFQ Approved
2
Shortlist for Audit/Samples Agreed

15. The first step for demand analysis was to develop a comprehensive
understanding of the requirements
© 2016 Dragon Sourcing. All rights reserved. 15
Product name BODY SPRAY MIST
Article No. 566037
Current price N/A
Target price N/A
Market China
Order Quantity 1000pcs per fragrance X 4 = 8000PCS
Test Requirement
Full test reports on cosmetic items:
1. Toxicologically;
2. Heavy metals;
3. Microbial (if required);
4. Preservative Efficacy (if required);
5. MSDS (Material safety data sheet) is
always supplied by the factory as this is
their list of ingredients.
Remark
Classified as Dangerous Goods, so is to
be shipped ex shanghai due to separate
vessel required.
BODY SPRAY MIST 4 colour x 4 smells
LIP BALM
LIPSTICK
CONTOUR KIT
NAIL PAINT
FAUX EYELASHES
BLUSHER-CRÈME
EXAMPLE ITEM

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Then an extensive supplier data base is built leveraging multiple sources of
information
Company and contact information
No.
Product
category
Supplier
name
Province City Website Source
Contact
Person
Email Telephone Mobile
1
BODY
SPRAY
MIST
Supplier 1
2
BODY
SPRAY
MIST
Supplier 2
3
BODY
SPRAY
MIST
Supplier 3
4
BODY
SPRAY
MIST
Supplier 4
5
BODY
SPRAY
MIST
Supplier 5
Sources of Information - China
Website name websites Remark
Alibaba www.alibaba.com
B2B for all over
the world
Global Sources
www.globalsources.
com
B2B for all over
the world
Gongchang
www.gongchang.co
m
B2B for all over
the world
Tradekey www1.tradekey.com
B2B for all over
the world
ECVV www.ecvv.com
B2B for all over
the world
EC21 www.ec21.com
B2B for all over
the world
Hellotrade www.hellotrade.com
B2B for all over
the world
Trade Asia www.etradeasia.com B2B for Asia
Asian Products
www.asianproducts.
com B2B for Asia
made in china
www.made-in-
china.com BSB for China
Alibaba China china.alibaba.com BSB for China
Baidu www.baidu.com
TOP 1 source
engine in China

17. After building a supplier long list, a telephone pre-screening process is carried
out to select the suppliers to be included in the RFI/RFQ process
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No. Pre-screening question for case 2 Importance
1 • Do you manufacturer for cosmetics, what’s the range? Must have
2 • Do you have certificates of GMPC, ISO22716? Must have
3 • Do you have experience export to EU, USA, Australia, etc. Must have

18. After completing the phone pre-screening process, we administer the RFQ
process
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Suppier Helmet Photo
工厂报价产品照片
FOB price
(USD)
FOB价格
（美金）
MOQ
(Pcs)
最小起订量
（件）
Is it possible to produce it
with Cotton On Packaging
with the MOQ. (Y/N)
MOQ的数量能够做Cotton
On 自己品牌的包装
Production
Lead time
(days)
生产交期
（天）
BOD Y SPRAY MIST 4 colour x 4 smells
1000pcs per
fragrance X 4 =
8000PCS
Full test reports on cosmetic items:
1. Toxicologially;
2. Heavy metals;
3. Microbial (if required);
Classified as Dangerous Goods, so is to be shipped ex
shanghai due to separate vessel required.
LIP BALM
1000pcs per flavour
X 4 = 8000PCS
RemarkProduct Name
Quotation
报价
Reference pictures / designs Testing requirementQty.
Request for information - Contact Information
信息征询 - 联系信息
I. COMPANY
INFORMATION
公司信息
1-1 Company Name
公司名称
1-2 Factory Address
工厂地址
1-3 Town
城市
1-4 Province
省份
Company Website
公司网址
CONTACT
INFORMATION
联系信息
1-5 Contact Person
联系人
1-6 Title
职位
1-7 Email
电子邮件地址
1-8 Tel
电话
1-9 Fax
传真
1-10 Mobile phone
手机
1-11 English Contact Person
英语联系人
1-12 Title
职位
1-13 Email
电子邮件地址
1-14 Tel
电话
1-15 Fax
传真
1-16 Mobile phone
手机
Contact Information Inquiry RFQ Chart: EXAMPLE
-Key commercial terms
-Key certificates
-Key questions for order: MOQ, color/packaging
customization
-Etc.
Country of Origin 产地国
Port of Loading 装运港
Validty 报价有效期：
Quotation date报价日期：
Do you have ISO 22716 certificate? (Y/N)
Do you have GMPC? (Y/N)
Client's Payment Term:
客户付款条件

19. Company and contact information RFI/RFQ Process follow up
No.
Product
category
Supplier
name
Province
RFI/RFQ sent Intend to respond Last call follow up RFQ received
Remark
Y/N Date Y/N
If no,
reason
Date Comment Y/N Date
If no,
reason
1
BODY SPRAY
MIST
Supplier 1
2
BODY SPRAY
MIST
Supplier 2
3
BODY SPRAY
MIST
Supplier 3
4
BODY SPRAY
MIST
Supplier 4
5
BODY SPRAY
MIST
Supplier 5
During the RFQ process, an RFQ control sheet is used to follow up the whole
process
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Short-listed suppliers were succesfully audited leading to orders being placed
and significant savings being achieved
For audit process:
All the new supplier for this client will fill-out the full set of pre-audit documents, and the
ethical team of this client will evaluate the new suppliers based on the documents and
decide if a) to approve directly for an initial order, or b) to do the on-spot audit, or c) reject
The pre-audit documents including:
1.PRE AUDIT (SELF ASSESSMENT)
2.VENDOR FORM
3.SUBCON FORM (MUST DISCLOSE ALL STAGES OF PRODUCTION)
4.EXTERNAL AUDIT COMPLETED IN LAST 12 MONTHS
5.CAPS REPORT RELATING TO CORRECTIVE ACTIONS IDENTIFIED IN EXTERNAL
AUDIT
6.BUYERS FACTORY CHECKLIST (IF COMPLETED BY COG TEAM)
7.FACTORY PICTURES (taken in last 14 days)