The world has become a very competitive place. It is typically less expensive and more profitable to buy products overseas and import than it is to produce locally. China has become the world’s workshop because many, many companies buy products overseas in China or partner and produce in China for world wide sales. For a company that wishes to buy products overseas there are a number of practical steps to follow. These steps will not differ substantially whether the company wishes to buy raw materials, components and parts, or finished goods. It may be a little different if the company wishes to obtain technology or technical and mechanical services overseas. To buy products overseas, in China especially, offers the benefits of lower costs and provides the company with a wider range of options than just buying at home. The obstacles to overcome include setting up new business relationships, doing business internationally, dealing with a different language and culture (30 different provinces in China with different cultures, dialects and language), and setting up lasting business relationships.
Not all overseas producers are the same. Because a county like China has been exporting for decades it has an established infrastructure of ports, railways, factories, trained labor, and technological expertise. It also has a substantial degree of foreign expertise on site, be it German engineering, American high tech, or Japanese management to facilitate production as well as all of supply chain management.
To buy products overseas successfully a company needs to be clear about what its goals are. It needs to establish a connection with someone who does business and has connections in China or India or Brazil or Russia or anywhere else. Business in many nations, especially China is built first on person to person relationships. To establish these it is important to obtain help in overcoming language and cultural barriers. As we noted above large countries such as China have cultural differences from province to province. Having the expertise on hand to do business across subtle but important cultural differences can be crucial to business success.
Are you going to buy products overseas because your local supplier has a strangle hold on your supply chain? Then don’t get into the same problem overseas. By dealing with a competent, knowledgeable, and trustworthy agent who does business in a country like China you can diversify your supply chain even from overseas and avoid being held hostage to the pricing structure of one supplier.
Know what products, parts, or supplies you wish to buy. Be clear on how much you can pay and still make a profit. Be sure to calculate the costs of the entire supply chain from design in your home office to the factory floor in Shanghai to shipping to Oakland to delivery to buyers throughout North America. Once you are established you may want to enlarge your perspective and buy products overseas through your contacts and logistics arrangements in order to provide products to other companies who have not done the work necessary to successfully buy products overseas. The first steps, however, are to obtain competent counsel and set up your own connections.