5 Benefits of Local Suppliers for E-Commerce Business
8 minute read
The viral outbreak that left the world with serious consequences has exposed the vulnerable spots of companies that preferred to source internationally. Global supply chains have been hit badly by the pandemic and, consequently, many businesses have gone through a difficult phase trying to find new local suppliers to keep the operations above the water level.
It is clear that many companies no longer source internationally. They now know they have to source locally due to various measures implemented by governments all around the globe.
But that’s not necessarily a bad thing. Nowadays, a local supplier is a more reliable supplier.
If you too have felt the effects of a disrupted supply chain, keep reading. Below you will see all the benefits of having a local supplier for your eCommerce business.
1. Improved Access To Markets
In a word, local suppliers have a more holistic approach to goals, which usually contributes to a more long-term partnership that aligns with the interest of their partners.
When an eCommerce business has to rely on a supplier from another region, it usually has to deal with the issue of shipping. In general, it takes at least a few weeks to ship parts from foreign countries.
And this works well when there are no delays in ports or customers on both ends. But what happens when there is a crisis that affects the whole world? That is when problems happen.
On top of that, sometimes language barriers can really create numerous problems on both ends. When this happens, one side usually has to fix the issue due to flawed expectations.
For instance, if you agreed on certain conditions regarding the shipment of your new parts and the other side made a mistake due to the bad language proficiency, you will have to wait on the delivery, since they will need additional time to create a new order and ship you the right parts.
On the other hand, when you place your trust in local suppliers, their position plays into your favor strategically. Thanks to the fact that local suppliers are near you, you can launch products faster, and you can improve your speed to market and maintain a competitive edge.
2. More Flexibility And Greater Control
It is fair to say that local suppliers tend to be more open-minded than larger corporations. Small suppliers pay more attention to making a relationship with a company.
This means that they are more likely to go an extra step to suit your business needs. And in this dynamic business world, one can never know when an opportunity or a challenge will arise.
A buyer would rather know the growth pattern for the product that is sourced before actually choosing a partner.
When you source locally, you can ramp up to meet increasing demand. Local suppliers are more reactive than suppliers who are farther away. They can deliver products faster, and it is much easier for a supplier to coordinate a shipment across a single country or city than around the whole world.
This also paves the way for better control. The further away you are from different stages of your supply chain, the less control you have over them.
Suppliers usually state that they treat all of their customers and purchase orders the same, but if they anticipate a website visit or a drop-in meeting from you, chances are they will keep you top of mind.
3. Reduced Supply Chain Cost
According to recent data, businesses in the US alone spend a whopping $1.64 trillion a year on simple supply chain management and logistics. Therefore, switching to local suppliers would translate to cutting on supply chain management costs significantly.
When a business’s supply chain is spread out across the globe, the chances are that a lot of money gets spent on supply chain management even though most people go overseas to save on logistics and shipping.
If your business sends and receives parts and products all over the world, the expenses can add up quite fast. To make the matter even worse, sometimes the pieces and parts have to be stored in warehouses before they get shipped again to the next supplier.
Fortunately, as it was mentioned, a lot of these costs can be reduced if you localize your supply chain. Moreover, when less money is spent on logistics, there will be less strain on your bottom line.
If you want to cut costs even further, you should also consider reducing your inventory. Since local supply chains allow for shorter lead times, shorter lead times then indicate that you can place smaller orders.
Smaller, more frequent orders bring better cash flow, lower warehouse costs, increased inventory turns, and a lower risk of overstocking on a product that does not sell.
4. Helps The Environments
When a business reduces shipping and storage, it also reduces emissions and energy usage.
Localizing the supply chain opens the opportunity to help the environment. Sourcing locally not only contributes to green manufacturing but ultimately helps build consumer confidence.
Once shoppers start purchasing your products with confidence, you can rest assured that the business will enjoy a better brand image, brand awareness, and customer loyalty. This is especially attractive when you consider that nowadays consumers like to buy items that bear ‘clean labels’ due to the increasing eco-awareness.
Of course, an eco-friendly initiative should not be followed only because your business will enjoy positive PR points. Being environmentally aware and eco-friendly needs to be a regular business policy and taken seriously.
5. Builds Goodwill With Your Customers
Your local customers are becoming more supportive of the idea of following and stimulating local businesses. Sourcing locally, in its essence, also helps other suppliers and manufacturers in your area. This brings positive effects to your local economy and the people that live there.
Customers know that when they support a local business that is partnered up with other businesses from the area, they are actually helping their own economy. This means that you will have zero issues finding customers if you successfully show that your commitment to the local economy is true.
Ultimately, this can lead to an increase in revenue and profits. Once you start acquiring more revenue, you can further improve your reputation by contributing to your local communities through fundraising, volunteering, benefits, and sponsored activities.
Remember, people care about the origins of the products they buy. It is only natural for a person to prioritize products that come from their region compared to imported foreign products.
It is understandable why people decide to look overseas when it comes to their suppliers. But situations like the one we are going through at the moment really show how important it is to have a local supply chain.
On top of that, when you turn to local suppliers, you show your support to your fellow countrymen. And the logistics and management costs that you can reduce by choosing local suppliers is no doubt another huge benefit.