When you're running a business in a competitive marketplace (and really, aren't they all competitive?) you may have to get a little creative when it comes to squeezing out every last drop of profit. Taking a close look at where you source goods from and where you ship goods to can help open up a world of options. Global supply chains can have huge benefits for entrepreneurs across a host of industries, such as:
Lower Costs
While it's important to factor in things like freight costs and shipping time, the cost savings from purchasing goods from other countries can be significant.
Whether you're buying components that you plan to finish in the U.S., or you're simply reselling finished products, there may be money to be made by taking advantage of the possibilities offered by a global supply chain.
Global supply chains let you stretch, reaching goods you'd never otherwise be able to offer your customers.
If you're willing to keep an eye on fluctuating currency valuations, you may be able to pad your profits even more if you purchase when the dollar is strong against the national currency from the countries you do business with. Of all the reasons to consider global supply chains, lower costs is the most common.
Greater Variety
Say your business sells home furnishings, both online and in a retail shop. You may have some staple items that can be found in other stores. You may also source some of your products from local vendors, supporting your community.
But as a small or medium-sized business, you know you have to find some way to set yourself apart from every other home furnishing store.
That's where global supply chains can work wonders.
What if you could feature a line of textiles—tablecloths, napkins and curtains—from fabric handmade by a women's weaving co-op in Guatemala? What if you brought in a line of fair trade coffee from Rwanda or Indian artwork made from recycled materials? Well, you can.
Global supply chains let you stretch, reaching goods you'd never otherwise be able to offer your customers.
Broader Perspective on Business
One of my favorite aspects of doing business all over the world is the way it pushes me to think differently.
Every time I travel or work with clients or vendors from other parts of the world, I learn new things. A greater cultural awareness helps me appreciate the importance of diversity and inclusion in my companies. It prompts me and my employees to innovate more freely. It broadens our horizons and helps us imagine new ways to solve problems.
This benefit of global supply chains is a little more theoretical than simply cheaper prices or greater variety, but it's no less important.
Higher Volume
Particularly for retail sales, one of the factors that limits how much you can sell is the amount of money you can invest in purchasing inventory. If you can buy more, in many cases, you can sell more. Accessing lower costs and more efficient production capabilities through global supply chains can mean much higher volume sales for your company.
Additionally, global supply chains give you the opportunity to broaden your vendor horizons. A bigger, more diverse pool of potential vendors may help protect you from costly out-of-stock situations.
International Customers
Supply chains aren't just about where you buy your goods from. The other part of the equation is where you ship your goods to. If you had more customers, could you sell more stuff? Of course! Well, there's a big, wide world out there for the taking.
Doing a little research will serve you well when you're looking to expand your sales globally. Cultural and language differences can make global supply chains interesting, to say the least. If you're planning to invest significant resources into opening up your business in a different country, you'd be wise to bring on an employee to make up any language deficits your company may have.
Sure, you're going to discover some challenges along the way if you're moving toward a global supply chain, but the potential benefits could make the effort worth it.
Having access to a greater variety of products that give you a price advantage can be huge. When you factor in the possibility of having broader cultural perspective, higher volume and a bigger pool of customers, exploring international purchasing and sales becomes even more enticing.
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