Cambridge area manufacturer Purchasing Manager Walat Yasin offers the following advice to fellow companies:

Buying foreign has become of great interest to our company recently, especially as we have the order quantities to justify the purchases and save significantly. We also do not have the local manufacturing resources for particular products.  We, like any company, are in search of the benefits of having quality goods produced from offshore countries at a competitive price.

For example, China manufacturers have progressed a great deal in recent years in terms of quality, technology and overall management; therefore there is reason to have more faith in their service, quality and overall handling of orders.

Below are some of the reasons as to why China is so successful on a global economic scale, and why importers around the globe are looking to purchase more and more from China to maximize their buying power:

1. Low overheads & labour rates
2. Large population
3. Huge industrial base
4. Supportive government
5. Growing infrastructure

There are obviously great benefits to buying offshore, but at the same time there are also potential risks and disadvantages. That is why it’s critical to establish your suppliers in business-developed countries such as China and Italy. By working closely with your foreign sources, you can gain that trust, partnership, quality, service, and profitability as long as communication is kept clear and flowing between you and your suppliers/sources.

There are only two ways to find an overseas supplier. One is to purchase directly from the supplier, the other to go through a procurement Specialist/third party. We utilize both options. Going the direct route, however, poses many difficulties. Besides the obvious language and cultural barriers, there is the issue of distance. For example, I cannot see a product or test it while it’s all the way in Italy. However; if my agent is located in Italy he or she can go and analyze the product on my behalf. Furthermore, if I lack experience in sourcing a particular product, the agent can assist.

Locating the perfect supplier is only the first step. Monitoring, quality control, and punctual delivery are all equally important. None of them can be handled effectively alone long distance.

Therefore, in most cases, unless a company is planning to hire knowledgeable staff and set up an offshore-based procurement office, the direct approach can be a tricky proposal for most.  That is why more and more businesses are using a third party agency. These agencies charge a small fee, but are very helpful when facilitating your offshore purchasing initiatives. They will connect with the right people and communicate between you and the suppliers to obtain the best value, optimum product and best services for your company’s dollar.

Some points to keep in mind when purchasing foreign:

  • Do your research on the suppliers and products.
  • Visit sources if feasible, see what their facilities look like, what technology they are utilizing, what type of staff they have , their capabilities etc.
  • Negotiate everything, payment terms, pricing, freight, lead-times, as nothing is in stone. Ask for references from the potential suppliers, visit their website, see product reviews, testimonials from customers etc.
  • Check to see if they have quality standards set in place, and what their procedures are. How long they been in business?
  • Always get samples for your own testing purposes prior to purchasing anything offshore.
  • Always keep in mind currency differences, freight charges, customs fees, long lead-times and duties for any product or service that is purchased from overseas as this might determine if purchasing offshore is suited for your company or not.