As a business, you will need multiple suppliers that provide you with essential things your company will use to provide its service. This could include raw materials or products, but it also encompasses services. To put it simply, if your business needs another company to give you something that allows you to carry out your own service, then you’re dealing with a supplier.
You can find business suppliers pretty much anywhere. However, there’s often a great debate over whether you should use local businesses or find suppliers in other countries. In most cases, you have a choice, and a lot of people opt for overseas options. It can have plenty of benefits – which we’ll discuss in this post – but it also has a few concerns. Before you make your choice, you should look at the pros and cons…
Often much cheaper
Seeking out suppliers can often be seen as a form of outsourcing as you’re using another company to provide a service. In that sense, it’s cheaper than trying to do everything in-house. Still, seeking out overseas businesses is also sometimes a lot cheaper than working with local companies.
As long as you find the cheapest international money transfer service, then the exchange rates between countries can work in your favour. For instance, Remitfinder offers you a selection of money transfer providers to compare them and get the best exchange rates to send money from Australia to India, UK, the USA, Canada, and other places.
The affordability is usually down to some foreign markets simply offering lower-cost working environments or having access to better technology that allows for a cheaper service. It’s also because local suppliers tend to make themselves more expensive as they offer a few unique benefits.
Longer delivery times
If you’re sourcing out physical products from overseas suppliers, then you have the disadvantage of longer delivery times. This is where local suppliers provide a unique advantage in that you receive things quicker. The closer a supplier is to your business, the less time you waste waiting around.
Sometimes, overseas suppliers are simply of a much higher quality than domestic ones. Again, this calls upon the technology and resources available in other parts of the world. Your local suppliers might not have access to a smidge of the resources that a company in Asia boasts. So, if you want what’s best for your business, then you might have to look overseas for a supplier that boasts the best service. This isn’t always the case – a domestic supplier may sometimes offer the best service. But, in the majority of instances, people will use foreign suppliers simply because they’re better.
What happens when you deal with a supplier that’s based in the same country as your business? Everything can run smoothly with limited roadblocks in the way. Yes, delivery of the products/services is more convenient, and part of the reason for this is the lack of rules/regulations you have to deal with. Granted, there will obviously be some, but you only have to worry about the regulations of one country.
Furthermore, as you’re also based in this country, you should already know these rules and know how to abide by them. An issue with overseas suppliers is that you have to deal with foreign regulations as well as your own. Then, there are customs issues, and so on. There are far more roadblocks for you to contend with!
Choosing a domestic supplier means you’re confined to a very limited number of companies. On the other hand, choosing a foreign supplier opens you up to the world – quite literally. You’re blessed with so much diversity and so many potential choices. As such, this gives you more freedom to shop around and find the best supplier for your business.
To round off the cons, you have to take foreign markets into consideration. What if the economy of your supplier suddenly takes a huge hit. They may lose money and struggle to keep up their usual operations. You’re going to get hit by this as it might mean you can’t get the supplies your business desperately needs! When you work with suppliers in your own country, you work within the same economic market. So, there’s no worry about a foreign market crash affecting your business. We saw clear examples of this earlier on in the year when China was the only country affected by the coronavirus. Their economy came to a standstill, and it disrupted businesses throughout the world that relied on Chinese suppliers.
All in all, both options can work well for your business. The best advice is to keep yourself open to bother domestic and overseas suppliers. Use these pros and cons to weigh up which option is most beneficial for your company based on your specific needs.