Buying Products from Overseas
Many companies think that taking the plunge into offshore sourcing product or manufacturing is only open to large businesses. In reality, today’s market is so trendy that any size company may consider becoming global from the outset.
One of the most frequent questions I hear from customers and business reselling products is “How do I find international suppliers and manufacturers that I can rely on my ideas and money ?
There are literally thousands of Internet resources and the expectations of foreign companies doing business with the USA based buyers. At first glance, we can see many opportunities and to be seduced by the pursuit of goods at a lower price. However, after spending time looking through directories company, product listings, and make many phone calls, the sooner you realize that the price is not the only factor to take into consideration when the purchase of the product. The real question is: what kind of society do you trust and decide to pay? Like domestic suppliers to do business with you, you chose to work with these suppliers, because you have built and maintained a business relationship trustworthy.
The same applies to foreign suppliers. Off shore are equally keen to do business with friends / knowledge, and with people who were referred to them by people they know. For this reason, it is strongly recommended to have a third party introduction, if possible. It is also important to point out that foreign suppliers you are interested in developing a business relationship in the long term.
A good place to start searching for partners at sea is to network with people in your business circles. Excellent resources are industry specific trade shows, current suppliers, customers, chambers of commerce, your banker, and even competitors. You may be surprised how many people actually have contacts in other continents. A list of resources targeted for reputable suppliers and manufactures can be found at www.thomas.net.
So when suppliers of products from abroad, who do you trust and actually pay? Here are 5 tips to help you identify reputable suppliers from the shore.
1st Start with a product from a particular country. (This will help you focus on finding suppliers with the expertise product)
Many countries are known for their expertise in the production of a type of product or have access to raw materials. For example: if one is looking for cotton textiles, the Central / South American countries would be a better source as saying Cambodia, where you may pay a premium because it is not easy to cotton grown in this region. If you are looking for household metal, countries with access to sufficient metal, such as China, would be a good source. Be aware that the duty rates differ for each product from different countries.
Have a 2nd value for money in mind
After selecting your country of origin, to identify the level of quality you are willing to purchase. After all, the quality of products will help determine the price of products. Some suppliers and manufacturers tend to stick to a certain level of quality when they produce specific product lines. For example, some plants can only source of recycled materials for their finished products. On the flip side, some plants may use the materials of the highest quality for finished products. Arm yourself with detailed questions about the plant and ability to produce low, medium or high quality products.
Know 3rd to ask: Is it that the final price and the cost of shipping and duties and taxes?
They are often hidden costs that can be watched over by the home buyer. If possible, ask the factory to enumerate all expenditures included in the final price of your product. You are most likely dealing with a reputable company if they are willing to provide such information. This will also help you to determine your final sale price and profit margin.
4th Find more of a business, in the same region, to compare prices.
Like buying at the national level, you want to find the best possible quality at the best price. You have more bargaining power over pricing, conditions of carriage, the manufacture of waiting time, and the terms of payment when you are able to compare the price and logistics between 2 or 3 suppliers. In investigating a small number of sources, you are also able to identify the plants that can be produced for overcharging or delivery.
5 Allow enough time to buy offshore.
Finding the right countries, the solution provider and logistics takes time. Build enough time in your own sales model to reflect build relations with suppliers, manufacturing, international shipping and obtaining letters of credit (or other forms of international payment).
Hopefully these tips will help to eliminate some of the uncertainties when purchasing products from abroad. Remember, you do not need to be great to think big.