The Key Challenges Faced By Small Businesses While Sourcing Products from Overseas

The Key Challenges Faced By Small Businesses While Sourcing Products from Overseas

Free Trade, Low Customs Duties, Eager Suppliers and a Booming Consumer Ecommerce Market. All these make a potent mixture that seems right for everyone in the chain.

However there are several considerations when it comes to sourcing merchandise, especially from overseas

As an importer and seller you have the following options

  1. Parallel Imports of existing brands
  2. Import of Brands that are not available in your country
  3. Import of non branded items

Here are some of the challenges you are likely to face

Parallel Imports of existing brands

This requires the brand to be aligned at both ends – the exporting country as well as the importing country. Also export of branded products from one country to another will usually require certification by the brand in the originating country to allow export to the importing country. So this cannot generally be done without the knowledge and permission of the brand

Import of Brands that are not available in the country

Such an arrangement would be made through a formal relationship with the brand owner who may agree to have you as the importer of record and allow you to sell products in the importing country. This requires you to promote the brand in the country without it being your own brand. Once the brand is built or accepted there could be chances that the brand owners decide to set up shop in your country and take back your rights. It also may require your making investments in after sales service on behalf of the brand

Import of non branded items

This is one of the most challenging areas for the following reasons

  • An unbranded product may not be able to yield the revenues that are required for it to be profitable
  • The supplier may be infringing on some intellectual property rights which you may not be aware of and may unknowingly become party to the violation of such rights
  • The product may not be tested for your country and as such the liability of after sales service will come on you, the importer and seller
  • Unbranded items usually come without appropriate packaging and you will need to create the packaging and produce the same at your cost
  • There could be several me-too products and your product lifecycle could be very short. Hence you would need to constantly find and import new products and go though the 4P process for all of them

A small business of retailer will find it very challenging to deal with all the above issues.  I have many prospects telling me that ‘Alibaba’ is the place to go. Yes ‘Alibaba’ is the place to go to find suppliers. What it takes after having found the supplier is a much bigger task than just finding the supplier. And as a retailer you would need to buy from multiple suppliers to create your catalogue. And this is not practical.

As a retailer you need to find a partner who will solve all the above issues for you and a specialist company like Tiger Pug (www.tigerpug.com) can be of great use.