Sometimes, it can be beneficial to work with international suppliers. They may provide you with services and resources that you can’t get anywhere else, elevating your company to the next level.
Nevertheless, this isn’t something you should immediately get involved in. You need to take your time weighing everything up before you start working with international suppliers. On that note, here are the three key things to consider before you agree to anything:
International contracts
Naturally, you need to have contracts written up between you and your new supplier. As a result, you have to ensure that the correct legal documentation is created and that you aren’t breaking any laws or being taken for granted. Working with firms like Accuro Maxwell that specialize in international trading contracts can be helpful. By working with experts in this field, you will know if you’re being cheated out of anything, or if your suppliers are breaking any laws.
Exchange rates
Obviously, you need to be aware of the exchange rates when working with anyone from overseas. What might seem like a great deal at the time can quickly become an awful one when exchange rates are taken into account. So, be sure that you check them before you agree to anything, but also be aware of how much the rates can fluctuate over time. If you are dealing with suppliers in a country where their currency often goes up or down relating to your own, it can be very hard to do business with them. One month you’re paying x amount, the next it’s another.
It’s all very confusing, so you need the help of financial experts to make sense of everything. You might find out that the exchange rates are simply so out of your favour that it makes no sense to deal with an international supplier.
The pros and cons
Yes, you need to consider the pros and cons of a move like this. What could you gain from working with international suppliers?
- Access to unique supplies/materials
- Access to cheaper supplies/materials
- Potentially gain access to a new international market for your business
On the other hand, what are the possible drawbacks of working with suppliers from overseas?
- Harder to communicate due to different time zones
- Longer delivery times
- Cultural differences that could cause roadblocks in communication
- A lack of knowledge of how the suppliers make their products
- Not supporting fellow local businesses
You really have to consider whether or not it is worth choosing an international supplier over a local one. Supporting local small businesses is always a great thing and will be good for your brand. You can also trust local suppliers as you have access to more information about them. Really, it comes down to whether you value the pros of choosing international suppliers higher than the cons.
A lot of businesses do have overseas suppliers, particularly those working in manufacturing. However, don’t take this to mean you absolutely need to have one! Before you make any decisions involving suppliers, consider the three points above.
