Living in Australia, selling in the US, and sourcing from China is the contemporary way of doing business. Digitization and IT has reshaped the business world and its operations entirely. Finding suppliers beyond the border has now become more convenient and effective. And since many overseas suppliers are offering good-quality products at cheaper rates than local suppliers, businesses prefer to buy from them to maximize their profits despite the added shipping costs.
While it may be cheaper to buy products from overseas suppliers, getting those goods transported to your local warehouses isn’t as simple as it seems. Dealing with overseas suppliers is not only a matter of tapping on the screen, but it requires a list of preventive measures to be taken before ordering your inventory.
Let’s take a look at some essential things to consider before using an overseas supplier.
Appointing Forwarding Agent
Sourcing from across the border becomes a headache when it comes to shipping and dealing with the port authorities of the importing and exporting countries. The process is quite time-consuming and costly. So, to make this hectic process smoother, appoint a freight forwarding agent. They will handle all the shipping-related tasks on your behalf while you relax on the couch.
When you appoint a forwarding agent, they will be performing all the administrative stuff associated with importing your product. The best part is that they can save your dollars by getting lower freight quotes. Moreover, they’ll monitor taxes & duties, oversee shipment loading, track the shipment, etc.
Manufacturer vs. Trader
There’s a big difference between buying from a manufacturer and a trading company, so find out who the supplier is. Manufacturers are the companies producing the goods, whereas a trading company purchases from actual manufacturers and sells them to businesses like yours at a comparatively higher rate. Secondly, a trader might send you a sample of premium quality to crack a deal, but later, they can prepare your inventory using a cheap or low-quality manufacturer. So avoid using traders and stick to genuine manufacturers to get a cost-benefit and quality control assurance too.
Communication over anything
Time zone differences are real, and we all understand them, but beware of a supplier who takes 48 hours to respond to your queries and concerns since delayed responses indicate the supplier’s lack of respect and interest. If you need to communicate with the supplier on an urgent basis about an issue with the shipment or want an update, you will have to wait for a long time. This will cause you unnecessary worry and may even translate into delays, which will cost you a substantial amount of money.
Another communication issue you might face when shipping from another country is the language barrier, but that isn’t necessarily a red flag. This matter can easily be handled by a translator or forwarding agent.
Upfront Payment & Trade Assurance
The typical payment terms in international sourcing are 30% upfront and 70% as ending balance. You must discuss the terms at the beginning with the supplier to avoid any problem later on. Some suppliers negotiate for 40% or even higher upfront payment, never agree to such terms. Also, sign a written, legally binding contract with the supplier upon which the agreed-upon rate and terms are clearly mentioned.
Shipping inventory from one country to another is a time taking and lengthy process. To ensure your inventory reaches in time without any loss, you must opt for trade assurance. If you’re using Alibaba, it offers free trade assurance to cover all shipping events, and it also resolves disputes between the buyer and supplier.
Have you communicated with the supplier? Decided on the payment terms? Everything’s now according to your requirements, or is it? What if there is a manufacturing fault in the finished products? To ensure that your whole shipment, from the number of cartons and packaging to the product’s functionality, everything is on point, you must use a third-party inspection company. They will physically go to the supplier’s warehouse and check the products one by one to make sure all units adhere to quality standards.
Remember to keep an eye out for red flags while informing your supplier about the inspection. See if they are open to it or if there is some hesitance in their behavior. If your supplier is OK with it, they are reliable.
Considering all these factors before signing off on any consignment with an overseas supplier is a sure way to avoid problematic situations, delays and unexpected costs. This will also save you a great deal of stress so you can focus on other important business matters. Don’t waste your energy nitpicking every little movement. If you have a reliable supplier and a proactive freight agent, all other things will fall into place.