17 Jun LOCAL SOURCING VS IMPORTING: BIG SAVINGS FOR BUSSINESES??

All businesses are looking for ways to increase profit, whether that’s by reducing overheads, generally keeping costs down, or finding ways to increase the margin on products. The more margin you can create, the more money you have to spend on the wider business and this can be the difference when it comes to outperforming your competitors. 

There is a way that businesses can reduce their spend on inventory and manufacturing without sacrificing quality – outsourcing.

Local Sourcing Vs. Importing

For many businesses, deciding whether to source locally or find providers further afield can be a tough decision. There are clear advantages and disadvantages for both.

Local Sourcing

PROS

• You are supporting the local economy. You are keeping spending concentrated in a smaller area and this can help local businesses.
• The impact of transport. You will find that local sourcing will often mean your products spend less time in transit and therefore contribute less to your carbon footprint. Of course, this isn’t always true, some local companies are very polluting. If this is important to you, a good sourcing partner will be able to help you identify good manufacturers that align with your brand’s ethos.
• You are able to personally oversee quality control if all manufacturers are local. Again, if you have a sourcing partner, this isn’t really a problem as they will be able to act on your behalf to manage this.

CONS

• Sourcing locally can be significantly more expensive. Not only are you often paying more for the goods themselves but labor costs and management fees can sometimes eclipse profit.
• Sourcing locally can mean a limited product selection, particularly if your product is unique or you are looking to be the first to market.
• You are often limited in terms of scalability when it comes to local sourcing. Most businesses will have a limited capacity and stock generally may be harder to come by.
• You may still encounter quality issues with local sourcing, but with a more limited selection of suppliers, it can be extremely hard to overcome these issues.
• Lots of businesses are already importing. When you buy goods from local businesses, often they have already imported the goods from elsewhere at a reduced cost. You will pay more for the product to be “locally sourced” when in fact it has been produced elsewhere and resold. This is without considering that competitors are getting an edge on your business by importing rather than buying locally.

Importing

PROS

• Importing can save businesses significant amounts of money. Not only on the actual goods purchased but also on labor, bulk discounts and even bypassing resellers or additional fees. 
• Higher potential for profit. Imported products can have a higher ceiling for profit because initial costs to the business are much lower.
• There are more options for diversification. Importing can help businesses to reduce their reliance on a single supplier or single element in the supply chain. This can improve inventory and make it easier to consistently stock your most popular products.

CONS

• There is no real benefit to the local economy. Sometimes sourcing locally can help to create jobs and put more money into the local area. When you choose to import, you are reducing your local spending and instead investing in areas that may not directly impact the local community.
• Shipping and customs can become more expensive if not properly handled. An experienced supplier partner can help you to better handle this element of the process. 
• Occasionally, there are events that cause disruptions to the supply chain. A supplier manager can help you to overcome these obstacles if this occurs.

How To Get Started With Importing

The easiest way to get started with importing is to find a trusted partner to handle overseas affairs for you. Importano is an expert sourcing, storage and logistics partner that can help you to oversee the entire process and start saving your business money.

Book a free consultation today to discuss how you could be saving by importing.