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BARBARA’S BLOUSES

1). What are some of the risks of buying overseas that one can avoid by buying from domestic sources?
The major risk for any procurement team or importer to consider when buying overseas verses domestic is the associated costs. Some of these include: * Tariffs and the risks associated with non- tariffs - Tariffs are taxes levied on goods when they cross an international border, e.g. import duties. Non- tariff includes laws, regulations or requirements that prevent or impede the importation of goods without a good cause. These may include customs procedures, inadequate infrastructure, and protectionist government subsidies. * Distance in which these products come from thus increasing lead times – longer lead times can result in missing customer deadlines and can be very costly. * Transportation and Logistics costs for importing based on distance can also result in heavier costs towards the cost of the material or the importer * Currency and fluctuations – if the currency exchange is not predicted or considered, there could be significant loses to the cost of the items. * Quality: returns or warranties of materials – this can also cause a high cost due to the fact that returns or warranties may not exist, hence the importer taking the hit on these deficiencies or damages * Evaluation and hidden costs such as TCO should always be considered in order to understand the full cost to bring an item or items from overseas verses domestic. Sometimes companies fail to see all the costs associated with importing materials from Asia instead they look at the cost of the goods only.
Other areas that may cause risks that most of the time ends up in costing the importer are legal issues, language or communication barrier, cultural differences, payment methods, lack of standards, lack of policies which result in labor issues,