When it comes to sourcing materials and suppliers from international vendors, it can be tricky to ensure you’re getting exactly what you need, not to mention the logistics of getting your supplies to you from a different country.
That being said, there are times when it makes sense to source internationally — maybe the materials aren’t available in your location, or they’re cheaper to import rather than source domestically, or perhaps you need supplies shipped internationally to locations you operate in. There are no right or wrong reasons to source internationally, but there are a few things you should consider before deciding who to work with.
Cost
For the most part, especially outside the US, international sourcing can be cheaper. This is often down to the availability of raw materials, lower labour costs, and established manufacturing infrastructure. This makes countries like China and India major hubs for manufacturing. The knock-on benefit for companies is that you can source what you need for less.
However, cheaper manufacturing doesn’t always mean lower quality, and higher cost doesn’t always guarantee better quality either. You need to focus on reliability and material or product quality when making decisions. Ultimately, though, cost savings are often one of the main reasons businesses choose to source internationally.
Production Capacity
Some countries are simply set up for certain types of manufacturing and producing specific goods. If you need higher volumes, using a production company that operates from a large overseas facility may make more sense.
An added advantage is access to raw materials at scale. If the materials you need are readily available in the country of production, this can simplify supply chains and reduce delays. China, for example, has access to a wide range of raw materials, including China carbide, which allows manufacturers to meet demand efficiently and ship products to global markets with relative ease.
Speed and Control
Working with suppliers that operate larger facilities can increase production capacity, but shipping and logistics must also be factored in. Lead times will generally be longer, and you may need to relinquish some control to third-party logistics providers to get deliveries to you.
If this isn’t something you’re comfortable with, sourcing closer to home may be a better option; however, if you find reliable manufacturers that use efficient and dependable shipping partners, longer lead times can be planned for. These delays can be built into your inventory planning and procurement processes to reduce disruption.
Laws and Regulations
It’s not as simple as finding an overseas partner and signing a contract. You need to ensure that any products or materials you import meet the laws and regulations in your country and any countries you are shipping to. For example, in the US, the receiving company is responsible for paying duties, taxes, and tariffs when goods arrive.
Other countries, such as the UK, also have specific regulations covering what can be imported and which quality control standards must be met. Always make sure you understand these requirements, confirm that your supplier can comply with them, and factor in any additional fees, taxes, or charges on top of the supplier’s pricing.
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