A Domestic Supply Chain: Should You Source Locally?

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For many small business owners, keeping costs low is important to being sustainable. For this reason, many look to source their materials and products from international markets, especially when sourcing locally is more expensive. While sourcing internationally can reduce costs, there are many benefits that come with sourcing domestically which any business owner should consider before going down the global route.

Reputation and Brand Image

One of the biggest benefits of local sourcing is that it can improve your brand image. While most other companies may outsource their resources, your company is giving back to the domestic economy and community by keeping things local.

For businesses just starting out, brand image is extremely important for attracting a solid customer base. This could be a great method for differentiating your brand and company from existing businesses.

Less Supply Chain Stress

First and foremost, sourcing internationally means that you will have very little oversight of the supply chain process. This may be manageable once you have established your company with comprehensive systems in place to oversee the supply chain from abroad, but for smaller businesses just starting out this can become problematic very quickly.

By sourcing domestically, you will be able to easily get in touch with suppliers and other key stakeholders. You will also be able to go to site in person and deal with any supply chain issues. This way, if there are any disruptions along the supply chain you will be able to identify them quickly and resolve them efficiently. Being able to do so is invaluable when it comes to keeping your customers informed and happy.

Faster Delivery Times

Of course, another fantastic benefit of domestic sourcing is that your customers will be able to get their products much faster than if you had to wait for them to arrive from overseas. This is especially true in smaller countries like New Zealand, where local delivery times can be as short as 1-3 days.

One of the biggest things customers look for in purchasing goods is convenience, and fast delivery times certainly contributes to making the buying process easy and stress-free for the customer.

Save Money

Although as we have discussed, many larger businesses turn to global sourcing because it is more cost-effective. In many ways sourcing locally can be very economical as well.

By reducing the logistics involved with an international supply chain and keeping it local, you can potentially reduce your expenditure. On average, North American companies, for example, who use global sourcing, spend over $1 billion every year on the logistics involved with this method.

Environmentally Friendly

Lastly, domestic sourcing will drastically reduce the amount of environmental waste you contribute to. When you reduce shipping and storage, you also reduce carbon emissions and energy usage. This is just one more feature of local sourcing which will help you stand out among your competitors.

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Melanie - Unleashed Software

Article by Melanie Chan in collaboration with our team of Unleashed Software inventory and business specialists. Melanie has been writing about inventory management for the past three years. When not writing about inventory management, you can find her eating her way through Auckland.

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