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Managing Overseas Suppliers

By: Dave Howell - Updated: 12 Nov 2010 | comments*Discuss
Managing Overseas Suppliers

Opening an office overseas to trade in a completely new market will mean your business has to handle a new supply chain. This will mean your overseas operation will have to manage language and currency differences as well as additional paperwork and perhaps a different working culture than you are used to just operating your UK office.

The key to successfully setting up suppliers for your new overseas operation that will enable you to trade profitably and start selling your goods into your new market is planning. The more you know about the suppliers in the overseas market you will be entering the better. This not only enables your business to trade within that market, you will also be able to negotiate the best possible prices from your suppliers.

Setting up a supply chain in the country your overseas office will be operating from can vastly reduce your costs. Sourcing goods in the local region can be time consuming, but the cost savings more than make up for the additional time your business will have to spend setting up these trade partners.

Overseas Suppliers Guidelines

The location of your overseas office will have a major impact on how you can effectively set-up your suppliers. Bear the guidelines below in mind when setting up any overseas suppliers:

  • You cannot assume that the regulations and legislation that governs the trade of goods, and the selling of products is the same in the country your overseas office is based in. Your suppliers may have many regulations your overseas office must comply with.
  • Product liability is an important consideration when selling any products. Your overseas suppliers should be thoroughly vetted to ensure they trade in legal goods that meet all the safety requirements of the country you are selling within.
  • Setting up suppliers or your overseas office must be covered with all the appropriate insurance you would use in your UK operation. This insurance protects your business against potential loss in the supply chain your business is now part of.
  • Contracts of supply are an essential component of your overseas supply chain. Seek legal advice from local agents as they will have intimate knowledge of the regions legislation. Selling in an overseas territory can be risk, your contract is a safeguard against loss from the suppliers your business will be using.
  • Language and payment options will be very different when you are considering suppliers to support your overseas selling. Organisations like UK Trade and Investment can help your business with these issues as they have representatives in most countries of the world.
  • Don’t forget to check the creditworthiness and ask for commercial references of all the suppliers you are thinking of using within your overseas operation. This information is vital to ensure you can trade with high quality companies that understand the art of selling.

Locating Overseas Suppliers

You’ll know from your experiences setting up a supply chain for your business in the UK that getting your suppliers right is crucial to the success of your business. This is doubly true when selling overseas.

Talk to your bank’s commercial divisions, the British Chamber of Commerce and even the other businesses in your sector to locate reputable suppliers in the region your new overseas office will trade within. Getting this aspect of your international business right can’t be stressed enough. With the right suppliers your new overseas venture will become profitable in a very short space of time.

Managing Your Overseas Suppliers

Once you have chosen your overseas suppliers your business must now effectively manage the relationship you have with these companies. Language and communication issues can present a barrier if your business doesn’t have any foreign language speaking members of staff. There are, however, business services that offer foreign language representation that you can use.

Also, don’t underestimate the power of face-to-face meetings particularly in the early days of your new relationship with suppliers. Taking the time to visit them at their premises will reinforce your relationship with them. Technology can be used to keep in close touch with them, but a physical meeting is always preferable to begin with. Regular visits after that should also be scheduled.

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