Your company may have already discovered the benefits of global sourcing, or you may be planning to outsource your product manufacturing to overseas companies in order to cut costs and increase efficiency in your supply chain. If that’s the case, it’s important to know the right ways to approach this process, in order to make sure you get the best return on your investment. Here are six ways that global sourcing can help make your supply chain management more efficient and successful in general.
1) Global Sourcing Allows For Flexibility
When you’re sourcing globally, your suppliers are potentially open to working with your on any number of things. A sourcing company in the USA may be willing to offer short-term discounts for bulk purchases, or they might provide samples at no cost so that you can test out their products before making a larger purchase. These sorts of agreements would be much harder to negotiate with domestic suppliers, but when your factories are located around the world it’s likely that at least one is willing to work with you. Having flexibility is an important part of running a successful business and global sourcing can ensure that flexibility.
2) Global Sourcing Provides Better Options
Businesses are no longer limited to local vendors or traditional distribution networks. With global sourcing, businesses have access to more suppliers and options than ever before. Online marketplaces make it possible for businesses of all sizes to connect with thousands of manufacturers around the world, all within a few mouse clicks. Traditional distribution centers are being pushed aside by online order fulfillment centers that allow businesses to get products directly from factories without dealing with long supply chains and inventory costs.
3) Local Manufacturers Can Be Chosen Instead
In a market as competitive as today’s, it’s crucial to be aware of all options. You may find that a factory or supplier abroad is able to produce your product at a cheaper price. Keep an eye out for buying opportunities and never stop searching for ways to lower costs. If you’re looking to sell your product online, cheaper prices could lead to greater profits. And if you own a physical store, reduced costs might mean reduced prices—which could mean higher profits from sales or more money from happier customers who feel like they got a great deal. Regardless of your sales channel, there are plenty of benefits associated with finding cheaper sources overseas.
4) Different Materials Are Available To Choose From
When you’re shopping for an item, it can be hard to find exactly what you’re looking for. Do you go with 100% cotton or a blend? The specific thread count? What about size and style? These questions might seem small, but they actually say a lot about how we treat our bodies and we could all benefit from slowing down and taking a closer look at what we choose to wear. If you can, try wearing one outfit made entirely from natural fibers for two weeks—no synthetics! Start by tracking how you feel—and if nothing else, notice just how much less laundry gets piled up during your natural fibers trial period.
5) Cheaper Prices May be Available
When you’re first setting up your supply chain, it’s easy to only consider domestic options for sourcing materials. But don’t make a snap judgment based on prices alone. In fact, you may be able to lower your cost of goods sold by purchasing from suppliers around the world. Consider if companies or products can be made or sourced from another country for a lower price. Then consider how much transportation and shipping costs will raise your overall expenses, as well as how long it will take to get items delivered to you and where they’ll be warehoused until they’re needed. If importing is going to result in a total savings that’s greater than 5 percent of your total gross sales revenue, it might be worth considering international suppliers as an option for meeting your business needs.
6) Additional Services May be Available
In many ways, outsourcing with the help of procurement companies in the USA can mean less overhead for companies. However, when it comes to global sourcing, you’ll have to bear a few additional factors in mind when choosing a provider. While you’re at it, don’t forget that there are a host of services that a supplier may be able to provide above and beyond your requirements. Make sure that they can service anything you need before signing up for long-term commitments.