Common Misunderstandings about International Sourcing

International sourcing is a significant activity in today’s business scenario. It involves identifying products and processes for procuring from an international supplier. However, there are some common misunderstandings about international sourcing. 

1. Approaching a good supplier is the only path to successful sourcing

Many business owners have the misconception that products can be procured successfully, only if the supplier is reliable. However, sourcing does not end with a single action. The business owner has to choose a souring agency, which in turn selects a supplier from whom cost efficient products can be bought. You should create effective supply chain management, training and proper relationship with the agency and with the supplier.

2. Multinational companies are the sole buyers of international products

At one time, small companies did not have the resource or intention to procure products from international suppliers. But, in course of time, the economy has evolved and now, small companies can afford international procurement.

3. Direct sourcing is the only way to save costs

Many companies believe that direct sourcing is the only opportunity to save costs. Direct sourcing is the act of purchasing products for the purpose of sale. It contributes to the revenue of the business. Indirect sourcing is the process of purchasing products that are used to run the business and the action does not help directly in earning revenue.

An agency offering sourcing services can inform you that indirect sourcing from international market can also save your company a lot of extra expenses. Tables, chairs, electrical appliances, computers, etc. can be sourced from international suppliers.

4. Sourcing has nothing to do with other departments in a company

Another misconception about sourcing is that it caters to only one department in a company. It is believed that the sourcing department works together with a sourcing agency to identify, understand and negotiate with suppliers. But the truth is that a business opting for sourcing services should interact with all its departments for enabling successful procurement. Each and every stakeholder in a company has the right to know about the procurement decision and its tentative outcome.

5. Cultural differences are not barriers anymore

The advent of technology has made trade easier to conduct. The global business arena has become more flexible allowing more and more companies to offer global service. You can opt for cost efficient service from a sourcing agency. With growing convenience in international purchasing operation, it might seem that cultural barriers are on the verge of diminishing. But in reality, you have to employ better techniques to meet cultural barriers. Starting from differences in language to work culture, everything should be dealt with efficacy.