10 Common Mistakes When Sourcing Overseas in 2024
In today’s interconnected world, sourcing products from overseas has become easier than ever, with countless suppliers just a click away. However, ease of access doesn’t guarantee success, and businesses must navigate numerous risks when working with international suppliers. As we step into 2024—a year marked by continued global supply chain challenges, inflation pressures, and evolving geopolitics—understanding these risks is more crucial than ever.
Here are 10 common mistakes to avoid when sourcing overseas:
1. “Wow – That’s Cheap!”
Cost reduction is important, but price alone shouldn’t dictate your supplier choice. Quality compromises are a frequent issue when chasing the lowest bid. Some suppliers may cut corners or use deceptive “value engineering” to maintain profitability, potentially leading to substandard products. Always verify the legitimacy of your supplier, inspect their facilities, and ensure pricing reflects quality standards.
2. “Where Has My Money Gone?”
Fraudulent transactions remain a serious concern in international trade. With cybercrime on the rise, double-check the authenticity of payment details using multiple communication channels. Ensure payments go to the verified business entity, not an intermediary or unrelated account. Taking these precautions can protect your investment and prevent losses.
3. Miscommunication – “I Told You That!”
Communication gaps often lead to costly errors. Language barriers and cultural differences can distort your instructions. Never assume understanding—always confirm it. Use detailed documentation, visual aids, and confirmatory feedback to ensure your expectations are crystal clear to everyone involved.
4. Ignoring Relationship Building
In many cultures, especially in Asia, relationships—or guanxi—are foundational to doing business. Taking the time to establish trust and rapport through regular visits, meals, and personal interactions can significantly improve long-term cooperation. A rushed, transactional approach often undermines potential partnerships.
5. Poor Planning
Choosing a supplier involves more than finding the lowest price or quickest turnaround. It takes time to vet suppliers, align expectations, and ensure their capabilities match your needs. Failure to plan thoroughly is a common reason supply chains falter.
6. Misaligned Interests
Not every supplier is the right fit for your order size or product complexity. Selecting a supplier whose strengths align with your needs ensures mutual satisfaction and long-term stability. Misaligned interests can lead to strained relationships, extended lead times, and unmet expectations.
7. Overlooking Subcontractors
Global trends like stricter environmental and labor standards (e.g., recent ESG regulations) have heavily impacted subcontractors. Know which parts of your supply chain rely on subcontractors and assess their compliance and reliability. Disruptions at this level can ripple through your entire production process.
8. Quality Assumptions – “Looks Good to Me!”
Quality control begins long before production. Providing detailed specifications, collaborating on standards, and auditing the factory’s processes are essential steps. It’s not enough to deliver your requirements—ensure they are understood, implemented, and monitored.
9. Underestimating Dispute Resolution
Legal disputes can disrupt your supply chain, particularly when enforcement becomes challenging across borders. Avoid a confrontational approach; instead, seek amicable resolutions that maintain the relationship while addressing issues. A balanced approach can safeguard your operations and reputation.
10. Mismanaged Dual Sourcing
While dual sourcing is a smart strategy to mitigate risks, poorly executed dual sourcing can backfire. Splitting orders between two suppliers who feel undervalued can lead to reduced quality or delays. Ensure your volumes are sufficient to keep both suppliers engaged and motivated.
The Global Sourcing Landscape in 2024
As we enter 2024, businesses must navigate global uncertainties such as fluctuating currency rates, geopolitical tensions, and environmental pressures. Supply chain disruptions from extreme weather events and policy shifts around sustainability (e.g., carbon border taxes) are becoming increasingly common. Staying agile, proactive, and informed is critical to succeeding in this complex environment.
At OnePointTwo, we specialise in helping businesses avoid these pitfalls while establishing robust and reliable supply chains. Whether you’re sourcing products for the first time or optimizing existing relationships, our expertise can make the process smoother and more secure.
📞 Call us at 01225 460 388
📧 Email us at mail@onepointtwo.com
