[Media Kit] Meet Sertus' China Sourcing Experts

2011

| Guadalajara & Mexico City, Mexico | Toronto, Canada | Fort Lauderdale, Florida | São Paulo & Florianópolis, Brazil | | Shanghai & Shenzen, China | www.thechinasourcingexperts.com |

M E D I A • K I T

Sertus is a leading provider of supply chain management and value-added procurement, design & development, and private label services. With a unique approach and custom-made solutions the China Sourcing Experts help many of the world’s largest organizations increase sales, uncover and eliminate hid-den costs and deliver a real impact to the bottom line. Through an extensive retail network and relationships with hundreds of factories, Sertus enables its clients to build profitable brands by sourcing the best products, minimizing costs and by opening up new markets and distribution channels.

Sertus backs its geographic scope and market/category/techni-cal expertise with a full suite of best-in-class services with two distinct business lines:

Principal – Private Label

Sertus manages private label programs for big box retailers and wholesalers in the US, Canada, Europe and Latin America, where they manage the entire design of the label, selection of assortments, sourcing, purchasing, delivery and after-sales analysis.

Agency Services

Sertus provides quality control and procurement services for companies doing business in China. Here they add value by helping to negotiate pricing, terms, inventory management, lead times, and ensure quality issues are controlled and exceptions identified at origin so as not to delay shipments.

Better Time to MarketSertus is recognized industry wide as being one of the most responsive companies of its kind. Working together, they can help companies minimize time to market without sacrificing the assurances that their Total Quality System will provide.

Unlike most trading companies that intermediate a buyer and a manufacturer, Sertus provides comprehensive turnkey services that cover every need of sourcing.

Get to Know the China Sourcing Experts


David Bennett is a Founding Partner of Sertus. He has been working in Asia since 1994, and is currently based in Shanghai, China. David is directly responsible for all of the company’s China operations and supplier relations. In addition, he has oversight for all sourcing, design, assembly and packaging activities. David speaks fluent Mandarin Chinese and has a background in marketing, sales, product development, operations and total quality management. He is a graduate of Economics from the University of Western Ontario, Canada.

Jay Peirce is a Founding Partner of Sertus and works out of the Miami office. He has focused much of his 20+ year career on global emerg-ing markets and has extensive experience in international trade. Prior to starting Sertus, Jay advised governments, companies and banks on debt restructurings, infrastructure projects, debt capital markets issues, and structured finance. Jay has oversight of the Finance and Audit Commit-tees and direct sales and marketing responsibilities for Latin America. Jay is fluent in Spanish and has a background in sales, marketing, finance, research, and training and development. He is Chartered Financial Analyst and is a graduate of ITAM (Finance) and Brown University (Economics, International Relations).

Aaron Slater is a Founding Partner of Sertus and is located in the Miami office. Prior to Sertus, Aaron ran the Latin American M&A departments of several large international investment banks. He currently is the team leader for all sporting goods product development and has direct sales and marketing responsibilities for Brazil and North America. Aaron has over-sight for Sertus’ Investment Committee. He has experience working for a number of large multinationals in geographies that include the Americas and Asia and has an industry background in sales, marketing, finance and product development. He has a graduate degree in international studies from the University of Miami and a bachelor of arts from the University of Western Ontario, Canada.

LEADERSHIP the driving forces behind Sertus


The NETWORK expertise | global | experience


Sertus’ global network puts all the puzzle pieces together for their clients and connects people and places - without borders. With offices in the US, Canada, and Latin America, backed by operating facilities in China, Sertus uses their touch points to help their clients improve source-to-contract efficiencies and streamline procure-to-pay operations. Drawing on multi-disciplinary competencies and unpar-alleled supply chain knowledge and network, they are positioned to offer a holistic solution to address global sourcing needs.

Some of the Brands Who Trust The China Sourcing Experts...

Headquarters: Ft. Lauderdale, Florida & Shanghai, China

Ownership: Privately owned

Type: Business to Business

Established: 2001

Web sites: www.thechinasourcingexperts.com, www.asiatradepro.com, www.sertusllc.com

Management: Multi-lingual professionals whose background includes sales and marketing, finance, manufacturing, engineering, design and graphic arts make up the management team of Sertus. These professionals serve client needs from a network of offices and manufacturing facili-ties in five different countries: David Bennett, Managing Partner; Jay Peirce, Managing Partner; Aaron Slater, Managing Partner.

Industry: International Trade

Business Target: Retailers, Wholesalers, Inventors and Manufacturers

Company Profile: Sertus LLC is a US company with wholly owned Chinese subsidiaries (Sertus Asia). Through a network of representatives/offices throughout the world and over 200 supplier re-lationships in China, the Company offers supply chain management and value-added procurement, design & development, and private label services. Sertus works with a wide array of clients, rang-ing from big box retailers (e.g. Walmart), wholesalers/manufacturers (e.g. Distribuidora Nacional S.A.), and hardware chains (e.g. Do-it-Best) and has experience in a broad selection of products.

Services: Providing relationship management, product design and development, contract manu-facturing, procurement, supply chain management, quality control and other services to a wide array of clients throughout the Americas and Europe.

quick FACTS


Over the past 15 years, Asia has experienced incred-ible growth. China moved past Japan in 2010 to become the world’s second largest economy, with an annual GDP of just under $6trn. Only the US, whose aggregate output was around $14.7trn in 2010, remains larger than China. Similarly, India jumped over Canada in 2009 and Spain in 2010 to the ninth position, with a GDP slightly over $1.6trn.

More impressive are the growth rates of Asian econo-mies, which are expected to continue over the next several years. Rising pros-perity will lead to consump-tion growth and this presents a variety of opportunities for inventors, manufacturers, retailers and wholesalers wanting to tap into these high growth markets.

Investments in R&D open up sourcing opportunities to capital intensive indus-tryThe large manufacturing base in Asia, especially China, has been steadily building. Public and private Research & Development Centers have exploded in recent years and through this investment in R&D, more capital intensive industries will be able to look to Asia as a viable sourcing alternative.

Tooling costs are generally lower in Asia than in more developed marketsFor inventors and manufacturers who are looking to tool new items, often the cost of doing so is far more competitive in Asia than in other parts of the

world. Yet, there has been a high degree of skepti-cism around Asian technical integrity in the tooling process until recently. Even though R&D investments have improved competitiveness in capital intensive industries, comparative advantages in tooling are most pronounced for labor intensive products (e.g. plastics, fabricated parts), where cost savings can be achieved due to competitive wages.

Inland China has low-cost alternatives to tradi-tional sourcing options but with new challenges

With prosperity, there has been As the Chinese economy began to open up several decades ago, the industrial concentration in large coastal regions has begun to spread out into second- and third-tier cities, where an abun-dance of natural resources (e.g. iron ore), inexpensive labor and low property values have made these locations of production highly competitive.

While this industrial migration is opening up new sourcing oppor-tunities for companies across the globe, it also presents new chal-

lenges. Inland China’s poor infrastructure, differenc-es in business practices from lager cities and local governmental influences all contribute to a new dy-namic that is often not well understood by companies used to trading with entities in the coastal regions. These differences and the importance of relationships (or “guanxi”) are some of the most important reasons for having an experienced partner with a wide reach-ing network in your corner when trading with China.

Why Asia?


Asia offers an attractive strategic option in the new global trading paradigm.

Quality. Quality. Quality. The China Sourcing Experts of Sertus make quality a priority. Without a QC team on the ground or visiting the manufacturing facilities in person, a trusted partner on the ground makes it easier to be success-ful. Sertus not only pre-qualifies all their suppliers, ensuring that the manufacturers they work with meet rigorous operat-ing standards, but they also ensure their people are present during the production process to identify risks before they become problems. Keeping it Simple. One of the most obvious reasons for using an intermediary is in the case of needing to source from multiple suppliers. The more parties in a transaction, the more complicated the process and the greater the potential for mistakes. Sertus simplifies purchasing - one order and all the rest is handled to make sure the transaction is smooth, the goods are done right and delivered on time.

Delivery Risk Diversified. Production disruptions are a common cause of the stress that many buyers experience when doing business in China. The delivery problems that ensue can be due to a wide range of causes, including: elec-tricity shortages, over-trading vis-à-vis capacity limits, liquid-ity constraints, bankruptcy, raw material shortages, quality negligence, imprudent scheduling, and many others. Making it extremely important to have at least one alternate manufac-turer who can step in to fill orders that are late or can’t be met by your preferred supplier. Sertus makes it policy to have back-up suppliers for your products so that delays are mini-mized when problems arise.

Sertus’ Superior & VastTrading Experience. Finding a qualified manufacturer in China can be difficult. There are many criteria that need to be considered. But even if you have found a manufacturer you believe to be producing the best product at the best price, it may not be equipped to get it to you. There are many factories that excel at making things and pricing them competitively, but not all are great at the export process. Sertus sells product from China to clients all over the world and is a center of excellence for trade related business. Sertus’ China Sourcing Experts understand design and work in multiple languages so that communication is never a challenge.

A trusted partner in China is the key to successful sourcing.


1.3 billion consumers strong, China is the most populous country in the world and offers tremendous oppor-tunities for non-Chinese MNCs (multinational corporations) looking to grow international sales. More impor-tantly, there is a strong middle class emerging of around 25 million to 30 million households – a key driver of the growth in a lot of consumer categories. Since 1980, Chinese GDP has been growing at an average 10% a year after inflation. Per capita income in China has grown by a factor of seven during this same period, a clip greater than what Japan saw during the 25 years following World War II. With this increase in personal wealth, most basic needs are now being taken care of and Chinese consumers are shifting consumption to non-essential goods.

However, the consumption preferences and behaviors, demographics and distribution dynamics are not easily understood, and anyone interested in selling into China should not underestimate the skills needed to be able to compete. While big-box retailers have invested in Western modeled distribution networks, the majority of goods and services are still sold via a complex web of state owned distribution companies and small private wholesalers. Logistics make up around 20% of China’s GDP, compared to only 10% in the US and it is not uncommon to find that getting goods from once city in China to another can be more costly than shipping them overseas. All of this adds a level of complexity to selling product in China that can trip up even the most experienced MNCs.

Over time, the infrastructure challenges, distribution inefficiencies, and complexities will gradually dissipate. But at present, local knowledge and relationships are giving a big advantage to emerging Chinese companies over their Western competitors when selling in China. The opportunities are extensive but so are the risks if you don’t have a local on your side.

Sertus’ China Sourcing Experts have the experience and network of relationships necessary to assist in navi-gating this enormous and diverse market.

Selling into China


Sertus’ proven systems save companies money. Providing clients turn-key, supply chain solutions that have a measurable impact on their customers’ bottom line is one of the most important parts of Sertus’ mis-sion. At every turn, they are working to help their network partners drive additional revenues and/or reduce costs.

A Global Network. Sertus offers one of the most comprehensive networks of manufacturers and channel partners that can help squeeze costs out of your supply chain. With bridges to thousands of factories, Sertus is able to help build profitable brands by sourcing the best products while minimizing costs.

Custom-tailored solutions. As a leading provider of value-added design, procurement, quality control and logistics services, Sertus offers their partners custom-made solutions to meet real client needs. They also offer their partners access to certain well known, international brands and retail channels that are part of the Sertus portfolio.

More than a QC company. With proven QC experience and the systems they have built over the years help them identify exceptions before they become problems. Using an ICCP (Identify/Contain/Correct/Prevent) approach to quality control that goes well beyond what most QC companies offer – Sertus’ China Sourcing Ex-perts not only find the problems, but they fix them and make sure they are addressed so as to limit the chance of reoccurrence. Sertus is a local extended enterprise alternative. To create an efficient and effective supply chain, transac-tional exchanges must be avoided. Sertus’ channel relationships with suppliers and service providers are also part of our extended enterprise. Drawing on all of their competencies and through offices in the US, Canada, China, and Latin America, they offer immediate and direct access to a single point of contact, speaking to you in your native language, and connecting you to their trusted network.

What makes Sertus’ China Sourcing Experts the best partner to have on your side?


Standard Operating Procedure (SOP): is a set of written instructions that document a routine or repetitive activity that we follow. The creation and implementation of SOPs are an integral part of the Sertus quality sys-tem. They provide our people with the information to perform a job or task properly, and facilitate consistency in the quality and integrity of our work. SOPs detail the regularly recurring work processes that are to be con-ducted or followed within Sertus. They document the way activities are to be performed to facilitate consistent conformance to technical and quality system requirements and to support data quality. The development and use of SOPs minimizes variation and promotes quality through consistent implementation of a process or pro-cedure within the Setus organization, even if there are temporary or permanent personnel changes. We have spent years developing and refining our SOPs and they are a fundamental driver of value for our organization that we happily transfer to our clients.

Quality Assurance (QA): is the planned and systematic activities implemented in the Sertus quality system so that quality requirements and client expectations for a product or service will be fulfilled. Quality assurance is a pre-requisite to quality control (QC). Without a good QA system in place, the control of quality is next to impossible. Sertus quality assurance identifies all critical actions that will mitigate or eliminate risk and ulti-mately prevent quality problems from occurring. In practice, Sertus devotes significant resources to devising systems for carrying out all tasks which directly affect product and service quality so that our clients’ expecta-tions are not only met, but exceeded always.

Quality Control (QC): is the set of procedures intended to ensure that a manufactured product or performed service adheres to defined quality criteria and meets the requirements of our clients. Sertus employs propri-etary quality control procedures at many points throughout the production and service cycle to help maintain the integrity of our deliverables. These procedures have been tried and tested through time and are set us apart from our competition.

Procurement: refers to all processes involved in the acquisition of available goods or services. At Sertus, the majority of what we do involves procurement, whether we are managing a private label for one of our retail partners or whether we are sourcing parts for assembly or resale to a manufacturer. Procurement begins with understanding our clients’ specific needs and matching these needs with the optimal sourcing solution. We pre-qualify all of our suppliers with a proprietary rating system that helps us in the selection process. In fact, all of the procedures Sertus follows in the procurement process have been methodically defined through experience. It is our rigorous commitment to these procedures that keeps our clients coming back.

Pre-production Inspection (PPI): takes place prior to any order being placed and is a critical differentiator of the Sertus quality system. All suppliers are pre-qualified by Sertus inspectors and rated using our proprietary grading system that examines a wide range of metrics, including: factory operations, history, size, process, systems, and clients/references, to name a few. This information is tabulated and considered, together with other transaction relevant criteria including price and factory location, to properly assess and select the pre-ferred suppliers.

In line inspection (ILI): refers to any inspection that takes place during the production process of an ongoing order, usually when 20% to 80% of the ordered quantity has been produced. The objective of the ILI is to identify problems early on in the production process and to contain them so as not to contaminate the order. These inspections help to reduce end-line defects and to adhere to production schedules by preventing reworking or remaking large quantities of pieces that would otherwise be rejected in the pre-shipment inspec-tion.

Pre-shipment inspection (PSI): also known as the Final Inspection is the random inspection of product after manufacturing/assembly/packaging has been completed and the goods are ready for export. The PSI en-sures that the products conform to the pre-determined contractual specifications as agreed with our client and that the order is complete. Sertus inspectors review product appearance, workmanship, safety and function-ality, quantity, assortment, colors/dimensions/weight, accessories, labeling & logos, packing & packaging, as well as perform technical tests as required to ensure hardness, material(s) authenticity, finishing, resistance, and any other special requirements you may have.

Glossary of Terms

www.asiatradepro.com

Glossary of Terms

Container Loading Inspection (CLI): usually takes place at the loading dock of our packaging/assembly facil-ity or at the manufacturer or forwarder’s site, wherever goods will be loaded into the container and sealed for delivery to our client. This inspection will convey the condition/status of the container via a 7 point inspection, ensure accuracy of contents, oversee loading and packing to verify goods are secure and free from damage, and confirm container is sealed.

Production Samples: refers to samples that are pulled from the line and reviewed against control samples to verify conformance. Sertus makes it our policy to send production samples to our clients on every first order (where economically viable).

Control Samples: refers to samples provided by client or received from manufacturer that are approved by client and that will be used in the dynamic QC process to ensure that the final production conforms with client specifications. Control samples are used for a variety of visual and functional comparative purposes, includ-ing color matching, dimensions, materials, finishing, workmanship, packaging, etc. Sertus will normally hold at least two sets of control samples – one of which will be sent to the client for confirmation purposes prior to order placement and the other will be held with our QC department and used during inspections.

Supply Chain Management: is the coordination of all parties (e.g. external suppliers, partner organizations, internal business units) both inside and outside the organization, involved in delivering the inputs, outputs or outcomes that will meet a specified client requirement. In short, it is the oversight of materials, information, and finances as they move in a process from supplier to manufacturer to wholesaler to retailer to consumer. Sertus helps our clients at each step of the process to shorten time-to market, reduce costs and to improve the management of current resources as well as plan for future needs.

AQL: Acceptable Quality Level / MIL-STD-105E / ISO 2859-1 (1999) is defined as the maximum percent defective (or the maximum number of defects per hundred units) that, for purpose of sampling inspection, can be considered satisfactory as a process average. The Acceptance Quality Limit / ANSI/ASQC Z1.4-2003 is the quality level that is the worst tolerable process average when a continuing series of lots is submitted for acceptance sampling. The AQL values are defined as percent nonconforming or defects or nonconformities per hundred units (or DUH). At Sertus, we use these guidelines for determining QC sampling and results.

Bill of Materials (BOM): is a list of all of the parts or components required to build a product. It is an integral part to any contract manufacturing agreement and will either be created by Sertus technicians or provided to us by our client. Because it contains all of the required components, it is a basis from which we build out the overall cost structure of sourcing product for our customers.

Product Spec or Information Sheet (PSS or PIS): is a data worksheet that outlines all of the technical stan-dards and specifications of a product. Sertus relies on these as an integral part to the QA and QC process and as such it serves as a critical piece of information to our quality system. It forms the basis of understand-ing between the client and Sertus and between Sertus and the manufacturer(s) as to the standards, certifi-cations, and all critical specifications that are to be verifiably intrinsic to the product(s) delivered. The PSS includes an explicit set of requirements to be satisfied by product materials, finishes, accessories, and any other relevant component or attribute.

CAD Drawings: are computer aided design drafts or drawings of a product under development. At Sertus, we use this technology to help tool new products for our clients. CAD packages can also frequently allow rotations in three dimensions, allowing viewing of a designed object from any desired angle, even from the inside looking out. This helps our industrial designers in working with manufacturing facilities to tool new components or products and to develop rapid prototype models for review prior to manufacturing.

Brand Identity: involves the outward expression of a brand, including its name, trademark, communications, and visual appearance. Our design team at Sertus has years of experience in designing brands that have been applied to products in a way array of industries. Our designers are managed by Western professionals who have many years of marketing experience and can help you transfer an idea into an identity through the consistent use of particular visual elements to create distinction.


Glossary of Terms

Inner Box (or Carton): is the first paperboard carton into which one or more pieces of merchandise is pack-aged. The inner carton is usually made of single corrugated boxboard or cartonboard.Master Carton (or Outer Box): is the second paperboard carton into which one or more inner cartons are packaged and is the shipping carton marked and used for export. Master cartons are usually double corru-gated cartonboard.

Packout: is the term used to describe the manner in which product is packaged into inner and master cartons. For example, a packout of 6/12 would indicate that there are six pieces of merchandise in the inner box and two inner boxes or 12 pieces of merchandise in the master carton. Packout is an important consideration as it not only will have a potential impact on logistics (depending on how containers are broken down or prod-uct is delivered to the end consumer) but can also affect the overall cost of the offer (as a greater number of cartons can inflate price).

Product Packaging: references the type and style of packaging used to display your product. There are a large number of packaging options, depending on the item. At Sertus, we have designed new packages to better highlight the products functionality as well as innovative packaging that helps to reduce the footprint of product on display, using less packaging material and floor space.

Packing Guide: refers to the specifications of all packaging, including type, materials and any other relevant information concerning the packaging used to deliver product to our client and end consumer. At Sertus, we are very specific about these requirements given that there is a wide range of materials and terminology used. It is therefore extremely important that everything be clearly broken down and detailed so that there is no confusion as to expectations. The Packing Guide includes mention of: materials and type of packaging; hanging hole standards, locations and types; shipping marks; drop test requirements; barcode locations and symbologies; and other key packing information.

Artwork: comprises all of the branding that will be transferred to the product and packaging. Sertus em-ploys a team of designers that can create for our clients the entire visual identity of a brand and transfer that identity onto the product and packaging to build out complete lines for retail or wholesale channels. Artwork includes: product markings, printing, logo and branding transfer, inner box markings, master carton markings, and any other illustrative or textual render that needs to be transferred to a product or package to give it a unique look/feel.

Minimum Order Quantity (MOQ): is the least number of pieces that the manufacturer will accept for any single order.

Full Container Load (FCL): refers to an order that will completely fill a container. At Sertus, we work with our clients to help consolidate orders and manage full container loads, which in turn help to minimize shipping costs for our customers. In addition, there are many suppliers that will not accept any orders less than a full 20’ container and so it is important to understand how many pieces represent a 20GP FCL (20’ Standard Container fully loaded).

Less than Container Load (LCL): indicates that the quantity will fall short of filling a container and therefore there will be excess space paid for but unused unless additional product from another order is consolidated. There are additional costs to ship LCL quantities and therefore it is avoided generally by most buying entities. However, by consolidating a variety of orders with Sertus, we can work with our clients to efficiently manage logistics and reduce expenses due to LCL shipments.


Connect with Sertus

With a position at the center of the hardgoods sourcing and distribution community, Sertus’ team has great insight into the value chain of hardgoods trading. With a reputation for being China Sourcing Experts, many journalists look to Sertus for market intelligence on hardgoods procurement and best practice for doing busi-ness in China.

Sertus’ media relations department assists journalists, editors and industry analysts who cover the supply chain management industry with company background information, interviews with Sertus executives, and general information or fact checking for articles or reports. Sertus executives are also available to speak at industry events, tradeshows, and conferences.

To contact Sertus’ media relations department, please email: Media Relations at [email protected].

For additional information please contact us at:Sertus, LLC Media Relations 2040 Sherman Street | Hollywood, Florida 33020USA: 1-877-6-SERTUS | CHINA: 86-21-6473-5325


Connect with us.