Hey there,

→ Week 1: Which products to move vs. keep — the 4-factor framework

→ Week 2: The China+1 fantasy vs. reality — what actually happens

→ Week 3: The sourcing scorecard — how to score and decide

Today I'm putting it all together into a complete 90-day action plan. If you've been reading along and thinking "okay, but what do I actually DO?" — this is your answer.

Save this newsletter. Print it. Reference it when you're ready to move.

Thinking about changing suppliers or diversifying production?

Before you move a single SKU, run this scorecard.

This week’s episode walks through the exact framework we use to evaluate sourcing move candidates product-by-product — including how to score complexity, margin, volume, and lead time sensitivity across your product line.

If you want the full operating system around what we covered today, this is the companion to today's newsletter.

Before you contact a single supplier, you need to know why you're doing this and what you're looking for.

Week 1-2: The Reality Check

Answer these questions honestly:

Why are you diversifying?

→ Tariff arbitrage? Calculate the actual savings after all transition costs.

→ Geographic risk? Quantify what a 3-month disruption would cost you.

→ Lead time? Calculate the value of faster response (inventory savings, trend capture).

→ If your answer is "I'm scared of headlines" — stop here. That's not a strategy.

What's your risk tolerance?

→ How much can you afford to spend on exploration that might not pan out?

→ How long can you run parallel supply chains during transition?

→ What's your backup plan if the new supplier doesn't work out?

Week 3-4: SKU Analysis

Score every SKU using the 4-factor framework from Week 3:

→ Complexity (1-5)

→ Margin (1-5)

→ Volume (1-5)

→ Lead Time Sensitivity (1-5)

Sort into buckets:

→ 16-20: Move candidates

→ 11-15: Dual-source candidates

→ 6-10: Stay

→ 4-5: Definitely stay

Focus your search on the move candidates. Don't try to find suppliers for everything — that's how you burn cash and energy.

Phase 1 Budget: $2,000 - $5,000

This covers your time (or a contractor's time), any software or databases for supplier research, and potentially a consultation with someone who knows the space.

Phase 1 Deliverable: A clear list of 3-5 SKUs to focus on, with documented rationale for why these are the right products to move.

Now you hunt. The goal is to identify 20+ potential suppliers and narrow to 2-3 serious candidates.

Week 5-6: Cast a Wide Net

Use these 5 channels to find suppliers:

1. Industry directories. ThomasNet (US), Kompass (global), Maker's Row (US apparel/goods). These are your starting point for domestic/nearshore options.

2. Trade shows. Even virtual ones. Suppliers invest in trade show presence — it's a signal of seriousness. You can also get referrals from other attendees.

3. LinkedIn. Search for manufacturing, production, or OEM + your product category + your target region. Reach out directly. Response rates are surprisingly high.

4. Referrals. Ask other founders who they use. Ask in communities (including ours). The best suppliers often don't need to advertise.

5. Sourcing agents. For international options, a good agent can save you months of research. They take a cut, but they know who's legitimate.

Target: 20+ initial contacts. You'll lose most of them through the vetting process. That's normal.

Week 7-8: The 4-Step Vetting Process

Step 1: Initial screen (email/call).

→ Do they make your product category?

→ Can they hit your volume?

→ Are they interested in your size of business?

→ What's their lead time range?

Eliminate anyone who doesn't pass basics. You should have 8-10 left.

Step 2: Detailed questionnaire.

→ Certifications (ISO, industry-specific)

→ Quality control processes

→ References (ask for 3, actually call them)

→ Capacity and current utilization

→ Payment terms they offer

Eliminate anyone who won't provide detailed answers. You should have 5-6 left.

Step 3: Sample request.

→ Request samples of existing products (shows their baseline quality)

→ Pay for samples — serious suppliers expect this

→ Evaluate quality, packaging, communication speed

Eliminate anyone whose samples don't meet your standards. You should have 2-3 left.

Step 4: Quote request.

→ Full pricing at your projected volumes

→ Tooling costs

→ MOQ requirements

→ Timeline to first production

Now you can do a real landed cost comparison.

Phase 2 Budget: $8,000 - $15,000

This covers sample costs ($500-2,000), potential sourcing agent fees ($2,000-5,000), any travel for site visits ($3,000-8,000 if needed), and your time investment.

Phase 2 Deliverable: 2-3 qualified suppliers with full quotes, sample quality validated, references checked.

If you're going through this process, you don't have to do it alone.

The Supply Chain Founders community has a dedicated #sourcing channel where founders share supplier recommendations, vet options together, and learn from each other's mistakes.

One founder posted last month asking for Mexico supplier recommendations for apparel. Within 48 hours, she had 7 referrals from founders who'd actually worked with those suppliers — including honest assessments of what they were good at and where they fell short.

That kind of real-world intel is worth more than any directory.

The community is free. Join before you start Phase 2.

This is where you validate before you commit.

Week 9-10: Test Orders

Place test orders with your top 2 finalists. Not samples — actual production runs at reduced volume.

Why 2 finalists? Because one will probably disappoint you. That's not pessimism — that's experience. Having a backup already in process saves you weeks if your first choice doesn't work out.

Test order size: 500-2,000 units typically. Enough to see real production quality (not hand-made samples), but not so much that a failure destroys you.

What to evaluate:

→ Quality consistency (not just one perfect piece — the whole batch)

→ Defect rate

→ Packaging quality

→ Communication throughout the process

→ Actual lead time vs. promised lead time

→ How they handle problems (because there will be problems)

Week 11-12: Make the Decision

Compare your test orders. One supplier will emerge as the clear winner — or both will disappoint and you'll need to restart.

Go/No-Go criteria:

GO if:

→ Quality meets or exceeds your current supplier

→ Defect rate is under 3%

→ Communication was responsive and professional

→ Landed cost comparison still makes sense

→ They hit their timeline (or missed by less than 1 week)

NO-GO if:

→ Quality issues that required rework or couldn't be sold

→ Defect rate over 5%

→ Communication was slow or defensive

→ Hidden costs emerged that break the economics

→ They missed timeline by 2+ weeks

If it's no-go: That's okay. You spent $20-40K to learn that this path doesn't work right now. That's cheaper than a $100K failed transition. Go back to Phase 2 with new suppliers, or wait 6-12 months and try again.

Phase 3 Budget: $10,000 - $20,000

This covers test order costs ($5,000-15,000 depending on product), shipping, potential quality inspection services ($1,000-3,000), and any additional tooling or setup fees.

Phase 3 Deliverable: A clear go/no-go decision with documented rationale, and if go, a transition plan ready to execute.

Let's be honest about what sourcing diversification costs:

90-Day Exploration Phase:

→ Phase 1 (Assessment): $2,000 - $5,000

→ Phase 2 (Supplier Search): $8,000 - $15,000

→ Phase 3 (Testing): $10,000 - $20,000

→ Subtotal: $20,000 - $40,000

Transition Reserve (if you proceed):

→ First production runs (larger scale): $20,000 - $35,000

→ Parallel inventory (running both suppliers): $15,000 - $25,000

→ Contingency for quality issues: $15,000 - $15,000

→ Subtotal: $50,000 - $75,000

Total Investment: $70,000 - $115,000

This is real money. It's why sourcing diversification isn't for everyone. But compare it to:

→ A failed transition that costs $150K+ (we covered these in Week 2)

→ A supply disruption that shuts down your business for 3 months

→ Tariff exposure of $50K+/year with no alternative

The investment makes sense if the risk or opportunity justifies it. That's why Phase 1 matters so much — you need to know your "why" before you spend the money.

Here's the simple framework:

Diversify if:

→ Tariff savings exceed $50K/year AND you have capital for the transition

→ Geographic concentration is existential risk AND you can afford the insurance premium

→ Lead time matters for your business model AND the math works

Do NOT diversify if:

→ You're just scared of headlines

→ Everyone else is doing it

→ You don't have $70K+ to invest

→ Your current supplier is actually working fine

If diversifying, how much?

→ First time: 20-30% of production. Don't go bigger until you've proven the new supplier.

→ After success: Can scale to 50%+ if the economics support it.

Timeline expectation:

→ 90 days to explore and test

→ 6-9 months to scale the new supplier

→ 12-18 months for a full, stable transition

Anyone who tells you this can happen faster is selling you something.

This month we covered everything you need to make smart sourcing decisions:

Week 1: Which products to move vs. keep — the 4-factor framework

Week 2: The China+1 fantasy — expectation vs. reality

Week 3: The sourcing scorecard — how to score and decide

Week 4: The complete playbook — how smart brands stay profitable in chaos

The bottom line: Sourcing diversification works — with realistic expectations, proper budgeting, and a product-by-product approach.

If you did the work this month — scored your SKUs, ran the numbers, identified your candidates — you're ready. If you haven't, go back. The frameworks are all there.

Until next time,

Lara

P.S. Save this newsletter. Bookmark it. When you're ready to start your sourcing diversification journey, this is your roadmap. The phases, the budgets, the decision criteria — it's all here.

P.P.S. Remember: sourcing diversification is a product decision, not a brand decision. And it's a multi-year journey, not a quick fix. The founders who succeed are the ones who go in with realistic expectations and proper budgets. Now you have both.

If you know a DTC founder wrestling with supplier chaos, inventory headaches, or a 3PL that's bleeding their margins, this newsletter was built for them. And sharing it with them is the most useful thing you can do for their business this week.

Every issue, we hand operators the exact frameworks, vendor scripts, and supply chain playbooks that most founders are paying consultants thousands for.

And when you share, you unlock something for yourself too:

Share this with your fellow DTC founders today. That's all it takes to start.

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