As margins have shrunk in most industries, entrepreneurs have had to look overseas to survive. Small companies are increasingly sourcing directly, rather than using middlemen. Once you've decided to source overseas, you must figure out exactly what you can spend in order to make a profit. Entrepreneurs should study all parts of their manufacturing to understand which parts are the most labor-intensive and could be outsourced.

The initial search for overseas sources starts with abandoning preconceptions about countries. Your research must include learning about the local customs and culture of the countries you're considering. Working with a consultant who can compare the strengths and weaknesses of countries and set up appointments overseas before you fly is a good first step in your search. Local trade organizations and chambers of commerce often offer assessments of consultants.

Whether working with a consultant or handling sourcing yourself, you should also examine industry research on suppliers through organizations like the Federation of International Trade Associations and trade groups specific to your industry. Also look into U.S. government assistance programs. FITA has comprehensive business directories on many source countries, while the Export-Import Bank now offers larger capital loans for small global traders. The U.S. Commercial Service's Gold Key Matching Service introduces entrepreneurs to U.S. embassy officials overseas, who then introduce Americans to local suppliers.

You should take care to hire a source that's not a competitor: Find a supplier whose own business does not directly compete with yours and who isn't tempted to rip you off. Then determine a source's turnaround time: For many entrepreneurs, finding a source that can move quickly is critical. And give your source an exact model of what you want produced: You can obtain a form called an ATA Carnet from the U.S. government that lets you import commercial samples duty-free. Finding someone who will accept an irrevocable letter of credit--a promise by a bank to pay the source--is also important.

The frenzy over sourcing overseas sometimes draws in entrepreneurs who would be better off not buying a plane ticket. So before making a move, entrepreneurs should seriously analyze whether they will save money by sourcing abroad. Certain types of businesses are the best prospects for staying in the United States. It doesn't make sense for small and midsize companies to source in China if their initial order will be less than $200,000, given the upfront costs of hiring an agent, setting up shipping, obtaining samples, and making trips to the source country. Companies that require a high degree of intellectual-property protection might also consider staying close to home.

__________________
For all freelane requirements
Manju Tech

Excellent post, rkasso

__________________
Vanessa


VanessaBeaty.com
Freelance Moms

Great post!

Keep it up!

__________________
Tip 1 => Click Here To See How I Get 25-50 Free Visitors To My Website Every Single Day

Tip 2 => Need Help With Hosting, Blog/Website Setup? PM Me or Contact Me Here

Many people think that we are losing jobs to outsourcing but the reality is that it is actually keeping our economy competitive. And that ultimately leads to a net increase of jobs.