Is overseas too far away?
My wholesaling business has been growing rapidly. So far, I have been able to do all of my purchasing in the UK. I know I could buy more cost-effectively from abroad, but I’m anxious about finding the right supplier and dealing with them from a distance. What do I need to consider and where can I go for help?
A. Mark Dodd of Lloyds TSB writes:
There are certain things you should consider up front, such as the type of supplier you’re looking for, the price you’re prepared to pay and the capabilities they’ll need to demonstrate. By forming a mental picture of the right supplier you’ll be able to assess their merits. For example, if speed of delivery is your top priority, an overseas supplier might not meet your targets.
Seek advice from others in your industry, as well as your local chamber of commerce and UK Trade & Investment. Embassies and trade promotion offices for individual countries can also help put you in touch with potential suppliers. You may plan to visit those suppliers on your shortlist, so be clear about your criteria and consider how they will live up to their side of the bargain. Will you check the goods before they are shipped or employ an independent inspector? They come at a cost but avoid unwelcome surprises.
Always factor in logistics such as insurance and shipping. Your supplier can probably cover both but they’ll be reflected in the price. Negotiate and consider paying for shipment and insurance yourself. Logistics companies can also typically handle this.
When you have a shortlist you can compare prices between suppliers and will be ready to negotiate. The three most important factors are: when they want to be paid; the quality of goods before payment and ensuring the goods are despatched on time.
Crucially, if your supplier wants payment in a foreign currency, you’ll want to factor in some protection from currency shifts. Your bank will be able to advise you. Before taking the plunge, assess whether you have the capability to manage this. It might make sense now, but may not if you have to recruit first. I also suggest you visit relevant trade exhibitions. With your research profile under your belt you’ll be able to identify who the best suppliers are.