Find international suppliers for sourcing & procurement
As an international procurement manager, the world is on your feet and everybody wants to do business with you. But how do you know you will get the best deal, being a foreigner in most countries?
It already helps if you have a structured approach for your procurement and to keep your options open. Working with a local consultant or agency may help to identify more potential suppliers and to get the products that you just bought accross the border to their destination.
How to determine which country to source from?
Every search and every price comparison costs time and money, so you want to focus your search as much as possible on one or two countries. But how to determine these countries?
There is a number of sources and factors that you can use to make a first country selection.
- Where are the others sourcing from? If you need to have coffee beans, and you know the HS-code, a website like trademap.org will show you that most coffee in the world is exported from Brazil, Vietnam and Colombia. This can give a first indication.
- Are there differences in import duties? If you want to import coffee in the United States, you will find no import duties at all. If we are talking about electric vehicles, this is fully different, with high duties on products from China, and lower duties at other countries, down to 2,5% for Mexico.
- Does the country share applicable standards and do you need further certifications? Within the EU a lot of regulations are harmonized, to it may be easier to get your product there than from out of the EU.
- How easy and quickly can you import? For German companies, if you can get your products from Poland or Romania, this seems more attractive than getting them from China. Not only because of shipping costs, but also because of delivery times and the risk of disturbances in your supply chain.
Contact a consultant in the country where you want to do business
A structured approach for sourcing from abroad
If you take your sourcing step by step, then it can’t go wrong.
Step 1
Supplier search
Try to identify in total 6 to 10 possible suppliers and check their websites. Approach them with a general request to see whether they have the products or services you need.
Step 2
Supplier selection
Submit your requirements to a group of three to five selected suppliers and ensure you get the right comparable quotations to make a choice. Negotiate with one or two of them to get the best result.
Step 3
Supplier Management
Now start collaborating, making sure you have an efficient ordering process and limited risks where it comes to quality control and shipping the products.
Shipping your products
If you buy physical products, you need them to get the shipped out of the country. Depending on the country, this may be a challenge.
First of all you may have to pay import duties or settle VAT. There are certain thresholds for both of these charges, e.g. while importing in the EU you don’t have to pay import duties on any shipment worth less than € 150.
There may also be non-financial bariers, like certifications or approvals to be obtained. Especially for food, cosmetics or medicine this may be the case. Check this in advance, even before you invest in your marketing.
Getting your products imported and delivered in a specific country can be a challenge. I have good experience with Tecex, who can act as your importer of record and even physical distributor. If you leave your details, they will contact you.
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Frequently asked questions
Procurement is the whole process that consists of:
- Needs Identification: Determining what goods or services are required.
- Supplier Research and Selection: Identifying potential suppliers and evaluating them.
- Negotiation: Negotiating terms, prices, and contracts with suppliers.
- Contract Management: Managing and overseeing contracts to ensure compliance and performance.
- Strategic Sourcing: Developing long-term relationships with suppliers to ensure consistent supply and value.
- Risk Management: Assessing and mitigating risks related to the supply chain.
Purchasing is an activity that may consist of:
- Order Placement: Issuing purchase orders based on procurement decisions.
- Order Processing: Handling paperwork and logistics for the order.
- Receiving Goods and Services: Ensuring delivery and inspecting the received items.
- Invoice Management: Managing and processing invoices for payment.
Procurement is a broader, strategic process that includes several activities involved in acquiring goods and services.
Purchasing is a narrower, tactical process focused on the actual buying of goods and services.
International procurement involves sourcing goods and services from suppliers located in different countries. This process is more complex than domestic procurement due to additional factors such as cultural differences, legal requirements, and logistics challenges. Typical aspects are:
- Import/Export Regulations: Understanding and complying with the laws and regulations of both the importing and exporting countries.
- Trade Agreements and Tariffs: Being aware of international trade agreements, tariffs, and duties that can impact costs.
- Customs Procedures: Navigating customs clearance processes to avoid delays and additional costs.
Sourcing is a subset of procurement that focuses specifically on finding, evaluating, and engaging suppliers of goods and services. It is primarily a strategic activity aimed at identifying the best suppliers to meet the organization’s needs.
Alliance experts focuses on identifying and selecting suppliers for various good and services internationally. We do this in over 30 countries around the world, including typical sourcing countries like Mexico, Spain, Turkey, India, China and Vietnam.
In international purchasing there are various extra aspects to pay attention to:
- Trustworthiness of suppliers;
- Shipping times and costs;
- Trade barriers and import duties;
- Payment issues and exchange rate fluctuations;
- Cultural and communication barriers.
It helps if you have a trusted contact person in the supplier’s country who can do basic checks and assist with problems.
With an international supplier or vendor selection you look at all normal aspects like functionality, support and costs, but also at risks associated with the supplier’s country, such as import duties, trade barriers, cultural differences and communication issues such as language or time zones.
