Today, a large number of businesses are buying offshore. The reason for this is simple— sometimes sourcing from abroad (low cost countries) costs a lot less than buying from local suppliers. If you’re also looking to buy offshore then there are a few things you need to consider before you buy offshore. You can avoid entering into contract with unreliable suppliers by performing appropriate supplier and product evaluation. Following are some of the most important things you need to check before you buy offshore.
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Will I be able to communicate with the supplier and its employees in English?
The first and foremost thing to consider is the language barrier. Offshore suppliers, in most countries, understand English pretty well but their ability to converse in the same is not that great. As communication is an essential part of sourcing, it is important for you to consider whether you’ll be able to communicate with the supplier and its employees in English. If it’s not possible for you to do so, then consider hiring an interpreter/translator.
Is the transaction legal?
Before you enter into a sourcing contract, you, together with the supplier, should consider what body of law shall be applied to the contractual agreement, i.e., the buyer’s country law, the supplier’s country law or the law applicable through a signed treaty between the two countries. If you do not apply any law to your contractual agreement then the transaction will be illegal.
Do I need a binding contract?
A legally binding contract is a state/federal contract law that legally binds two parties. This means the parties that are entering into contract must perform their duties as stated in the contractual agreement between them. The party that does not fulfill its duties will have to face legal consequences which includes compensating the grieving party for any loss they incurred. Unless you’re looking to source illegal items (illegal activity can’t be enforced in court), making your contract legally binding makes absolute sense.
Does the product you’re contracting offer you cost saving benefits?
Cost-savings is perhaps the initial reason for companies to source from suppliers in low-cost regions. Savings generally result from low labor and infrastructure costs. Therefore, before you buy offshore, ensure that the product you’re contracting offers you cost saving benefits.