If you’ve ever tried to order and source products from overseas you likely know the process is broken. Factories rarely talk directly to customers and middlemen are difficult to track down and there’s usually a significant delay while you wait for them to communicate back and forth with you and the factory. There’s also the trust factor, where you never really know what you’re going to get until it shows up at your door.
Enter Sourcify, a manufacturing platform that directly connects customers with factories overseas. The startup was founded by Nathan Resnick and is part of YC’s Winter 2018 batch.
Sourcify is one-part product management tool and one-part directory of hundreds of pre-vetted manufacturers, all of which are personally sourced and approved by Resnick and his company.
Customers who want to order a product sign up and pay a $500 fee, plus anywhere between 1-10% of the total order cost. After gathering some details about your project Sourcify sends the info to factories for quotes, lead-times and possible samples.
It turns out factories like this process too, considering the standard quo is paying a sales rep to deal with hundreds of incoming Alibaba leads with only one or two converting into an actual production run. Meanwhile Sourcify is seeing a 92% conversion rate after an order is submitted. Of course some of this is probably due to the commitment of an upfront $500 fee, but it’s also because the process is just generally a lot less frustrating for customers.
So far the average order is around $30,000, with most customers being e-commerce stores trying to create their own white-labeled products so they can increase their margins. Another common customer is an entrepreneur trying to create and sell their own product for the first time.
Eventually Sourcify hopes to automate most of the process so they can potentially lower their $500 fee and open up the service to individuals or small businesses that want a smaller order. For example, the startup keeps track every time a factory quotes a price and lead time for a given product, so eventually they’ll have enough historical data to know exactly what an item should cost and how long it should take to make – letting them quote accurate prices upfront without any back and forth.
Sourcify is also working on white labeling their product management software and potentially providing it to buyers at big retailers (think Gap or Old Navy) that currently use email to go back and forth with suppliers, which ends up being pretty unorganized and taking much longer than needed.
So far Sourcify supports about 100 different product categories, with about 5-10 factories per product category. Most factories are based in China, but some are spread across Asia with a few in Mexico. Whenever Sourcify gets a request for a new product they’ll decide if it’s worth adding to the platform, and if it is they’ll find new trusted factories that can create that product. For example, Resnick mentioned hair extensions as being a recent product that was requested enough times to justify an expansion into that category.