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Going global is a great sign that business is booming, but international customers bring the added demands and stress of international delivery. As you gain traction in other countries you will find there is a great deal of cost associated with getting your products to the point of delivery—especially countries that have added tariffs and fees.

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There are a few different ways to go about reducing the costs of a global customer base, but the first question you will have to answer is - "Can my current supplier scale to meet my new demands?" If they can, then you will be faced with a decision - - should you cut internationally delivery costs by manufacturing closer to customers, or should you stick with your current supplier and find another way to cut costs?

 

From the Arena blog, here are some considerations that may help you decide what move is right for your business.

 

You may want to consider new suppliers closer to your customers if  . . .

 

  • You have a mature product
  • You have a well-documented and well-managed product
  • You feel comfortable in your ability to deal with and manage risk
  • There are several competing companies that can address your manufacturing needs
  • Manufacturing isn’t your core competency or the core driver of your product’s value

 

You may want to stick with your current supplier team if . . .

 

  • Your product is immature
  • You can’t afford a reduction in quality
  • You are dependent on a competency owned by your current suppliers

 

For more info on this subject, here are a couple of articles I think are particularly useful. Enjoy!

 

Tips and resources for managing your outsourcing relationships

Manufacturing outsourcing challenges and how to solve them

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