Sourcing Components Abroad
With many risks and rewards that stem from sourcing components abroad, here we will go through the main points so that your business can stay profitable. With the right approach, sourcing products from elsewhere can benefit your business because you can search for quality items at a better value. The Internet has made trading easier so you can compare the prices of the things you buy, and online purchasing has made trading quick and seamless. Despite these positives, many risk factors should be taken into consideration when buying products from abroad.
Darian Global is committed to mitigating these risks so that you can find the best components to help your business flourish.
Quality and Transport
One of the main concerns when sourcing new suppliers from abroad is the quality of the product. If it fails to meet the required standards, then an international source is much harder to deal with when compared to a domestic source. This is because of the different time zones and longer distances prevent issues from being rectified quickly, leading many companies to wait weeks for problems to be resolved. You need to make sure that the source is reliable, and check that the product is satisfactory before you make any decisions to buy from abroad.
Leading on from this, the logistics of moving goods internationally is another challenge, as transportation can be costly. Companies should think about things like loss or theft of items as they move through borders and warehouses. This outlines how important it is to insure the components you purchase so that you avoid losing time and money.
Monetary risks are another factor that should be taken into consideration when you are trading globally. This is because exchange rates are changing continuously, so you need to make the right decision when figuring out what country to buy from. These concerns also show why companies buy from countries like China and India – because they have cheaper labour, and their currencies aren’t as valuable.
Furthermore, there are cultural differences that can pose a problem to business which can slow down the efficiency of sourcing products. For example, language barriers can make communication between different countries more difficult. If this is the case then come prepared with a translator so that you can speak to companies abroad and speed up the trading process. You should also be aware of the different trading laws that apply to other countries which might inhibit the buying and transport process. This is because some components might contain materials that are restricted by other countries. Also, the tariffs on importing and exporting products change depending on which country you source from.
Ideally, the objective is to find the cheapest products from a source you can depend on, which is why research is so important.
As mentioned earlier, the main benefit to sourcing items from abroad is it costs less; typically due to cheaper labour and better exchange rates. It also relieves companies from making the items themselves, so they can save money on production costs and invest more money into the business. Less manufacturing means more effort can be focused on selling products and making a profit.
Moreover, international sourcing allows for more flexibility because you can find a source that is tailored to meet your needs, whereas if you source from a local company they might not be able to meet the scale of production. Countries such as China have massive workforces that can mass produce products at better prices. The only downside is the transportation of the goods and the chance of unexpected delays.
Find the Source
At Darian Global, we can help you find the best place to source your components to help your business grow. We consider a wide range of factors to help you decide where you can find the cheapest items at the best quality. Our goal is to help you partner with a reliable supplier that your business can rely on.
To speak with us about any aspect of global sourcing, call Liz Samandi on +44 (0)1858 433096 or visit our contact page, and our expert team will be pleased to assist you.