Supplier selection process part 1 - - how to select global supplier for your business

If you are in the business of selecting suppliers, especially from developing countries, UK Customs Office did a lot of work to try and help you. Business Link is an impressive set of guides from export and import basics to specific supplier selection process. Many of the topics are UK specific and deal with UK taxes. But most are general purpose explanations on the topics of starting a business, finance and international trade.

• Understanding the culture. As we discussed earlier in our earlier post about doing business in China, cultural differences is a number issue when conducting business with China. Same is true with any other country. This means you have to study the country from where you want to source before plunging in.
 
• Methods of payment. You have to understand what payment methods are acceptable. For instance PayPal is not accepted in many Asian countries. On the other hand, wire transfer is a very wide spread method of payment.
 
• Shipping and logistics. You can negotiate the best price in the world but if you don’t know what it will cost to deliver goods where you need them, the total cost may be significantly higher. Working with drop ship suppliers can be a good idea.
 
• How many suppliers do you actually need? For a small company that decides on sourcing from overseas this becomes a major decision because typically small companies have limited amount of suppliers they work with. It is not just in the price. Selecting a supplier involves wide range of factors, not just price along. Based on our own experience many overseas suppliers believe that the most important thing in establishing relationship with western buyers is the price of goods sold. However, dealing with suppliers that offer the lowest cost might prove to be more costly.  
 
• Are you ready to negotiate? Negotiation styles are very different in different countries. Getting educated on this subject and getting ready might be crucial to get the deal you are looking for.