Global sourcing is risky business. These risks come in many forms such as quality failures, environmental exploitation, supply chain delays, stolen intellectual properties, financial fraud or just plain theft. Add in language barriers and cultural issues and the process can be very complex and risky. But where there is risk, there is also reward.
The big question then is the risk worth the reward? It certainly can be as long as you take some actions to minimize the risk. One of the best steps you can take it is finding a global sourcing partner to help you navigate the process from beginning to end. They can be your partner behind the scenes. Here are some great benefits why a global sourcing partner can help you reduce your risks in sourcing products overseas.
- Sourcing partners can help break down cultural barriers when attempting to do business overseas. They are fluent in the local language, business practices and can help represent your needs to the potential suppliers in a very professional manner.
- Supplier qualification is a very key step and using a global sourcing expert plays a vital role in this process. This is where the expert can pay for themselves. They help validate the supplier through certifications, production capabilities, site location, customer referrals, site visits and much more. Qualifying a supplier up front will save a ton of headaches after the fact.
- The type of payment method is another key area that a sourcing partner can help counsel based on the type of transaction. Wire transfer, Paypal, Letters of Credit, open accounts or cash-in-advance are all options and each option has its own set of pros and cons depending on which side of the transaction you are on. Both sides need to be come to an agreement that facilitates doing business together and a global sourcing expert is a great resource for this.
- Maintaining production quality throughout is one of the riskiest parts of the entire process. Setting up the right quality parameters up front is the key to success. Defining the specifications, getting approved samples and establishing ongoing quality checks in the process help to ensure a successful outcome. I have seen first-hand the costly mistakes of poor quality and the negative effect it can have from lost sales, a bad customer experience and tying up huge amounts of inventory dollars waiting for a resolution. This is truly a case where a dollar of prevention is worth many times the cost of the cure.
Sourcing products from overseas can seem risky but with the right partners it can add a tremendous amount of value to any company. Global sourcing has been a way of life in business since early explorers developed trade routes around the globe hundreds, if not thousands of years ago. There is no reason to believe this practice will stop anytime soon. It is your choice whether to take advantage of the opportunity or not.
If you or anyone would like learn more about how global sourcing experts can reduce the risk in overseas sourcing, please email email@example.com for more information. We would be glad to assist you in finding the right partner for your business.
Question: what were some of the cultural challenges you had to overcome when doing business overseas?