Once upon a time sourcing or manufacturing products was only an option for large businesses. Thankfully today communication links and the ability to source products and services from overseas is far easier so that a business of any size can consider going international from the very beginning!
How can I find international suppliers that I can trust?
Trade shows and the Chambers of Commerce are great for finding trusted international suppliers. Another great way if via a referral from a trusted friend or business associate that has had dealings with an international supplier before and can confirm their authenticity and level of service.
Identifying an overseas supplier – 5 top tips
Choose one product and one country – This will make your search a great deal easier!
Many countries are known for their expertise in making a particular product; they may have access to the right materials or have a strong labour force that specialises in that product area. China for example is a good choice for metal products and South America is good for cotton textiles. Check out the duty rates on your chosen country and factor this in to the price of the imported goods.
Quality and Price
Quality and price go hand in hand. The better the quality of an item the more expensive the cost per unit. Identify the level of quality you are after and what expectations the British market has for the goods in question.
Final price
Check for any hidden costs when you receive a quote. Ask if the final price includes shipping, duties and taxes. Ask for the supplier to itemize the quote so you can see exactly what you are paying for. This is another good test to see whether the supplier is reputable. All good overseas suppliers will be happy to show itemized billing so that there is no misunderstanding in your business relationship. Knowing the final price of the goods will enable you to work out your final sales price and what profit you can expect to make.
Make comparisons
Contact two or three suppliers in the same region and make comparisons on the price and the level of quality offered by each manufacturer. This will enable you to have far greater negotiation power as you now have knowledge of the local market and what their competitors are offering. Draw up a table and compare the price per unit, shipping terms, payment terms and manufacturing timescales.
Successful business model – allowing sufficient time
Ensure that you allow the correct amount of time into your own business model to find the right international supplier. Allow for delivery times and payment terms timescales. Consider how you will pay your supplier abroad. For a wide range of international money transfer providers visit our comparison tables to find the most efficient method of payment that is most cost effective for your business.
Further information about making overseas payments to international suppliers can be found in an interesting article about wire transfers on our blog. A full glossary on payment terms is also available here.
