4 Ways Small Businesses Benefit from Global Sourcing

In today’s economic uncertainty, with disruptions across a wide swath of businesses, a 2022 Goldman Sachs survey found that 91% of small business owners already struggle with the current economy’s impact on their industries, and 56% say the situation has worsened since the beginning of 2022. In the UK, the Federation of Small Businesses (FSB), said its latest small business confidence index fell to -35.9 from -24.7, the worst reading outside of COVID-19 lockdowns. Moreover, there are many common challenges every business faces, especially small businesses. These include hiring the right people, keeping control of costs and resources, keeping up-to-date with the market trends and insights with technology, developing a customer base, and so on.

Businesses have to explore every potential edge they can to navigate any crisis that may arise, alongside their suppliers and vendors. Most organizations including small businesses have now recognized the importance of implementing supply chain partnerships to face economic uncertainty and develop their own business sourcing model.

Nonetheless, for small businesses, the insufficient cognition of essential characteristics from effective supply chain partnerships hinders supply chain optimization. Here are the four positive characteristics a small business can look for in global sourcing:

Develop a trustworthy supplier community

Small businesses are always looking for reliable and high-quality suppliers as an essential part of keeping a business running. They are important when reflecting on costs, product quality and delivery time to satisfy the end consumers. Typically, the closer relationship with suppliers, the more benefits are gained for buyers such as faster inquiry response and stronger support in order negotiations.

Working with more than one supplier adds complexity to the supply chain, but it also provides protection against certain risks. A trustworthy supplier network is always one of the business’s first steps toward earning a profit.  Businesses can greatly benefit from using verified high-quality suppliers as they have validated the authenticity and accreditation through the right channels to prove their professional capabilities.

A global B2B marketplace with a verified supplier network can be the key solution to shorten the outreach process and omit any self-verification steps. Taking Global Sources as an example, buyers can simply check a supplier’s credibility by looking at the profile with the “Verified” badge which means that a supplier has been independently verified by relevant government agencies and third-party organizations. Aside from the “Verified” mark, buyers can also find the suppliers with “M” badges which indicate the supplier is validated as a 100% real manufacturer.

In addition, Global Sources offers 3D VR Showroom displays of verified supplier factories, which enables buyers to have a glance at different supplier factory floors without geographical limitations. This will certainly help buyers assess the capabilities of the suppliers they choose.

Meet low minimum order quantities to improve sales margins

In this era, sourcing products from across the globe can be considered as a great driving force for any small business to deliver higher quality for lower prices.  Small business owners find it beneficial to receive sourcing services from low-cost countries. By doing this, these companies may get a huge discount on manufacturing products that effectively reduce their production cost. A reduction in the production cost means a decrease in the prices of various services and goods. This will trigger more and more customers to purchase products or services. This will also allow the company to enjoy an upper hand over its competitors. For example, businesses in the North American region may buy goods such as computer numerical control parts for machines and stamped components from other regions such as Vietnam, India, or Korea, for a more reasonable price than sourcing those products domestically.

Furthermore, the low Minimum Order Quantity (MOQ) service may be much more suitable for start-ups or SMEs when sourcing materials or products globally. The main benefit of a low MOQ is that buyers do not require so much working capital to pay for inventory. Therefore, buyers are likely to face lower obsolescence risk and lower inventory holding costs in a more flexible sourcing experience.

Take advantage of big data for sourcing overseas at scale

Cost savings are one of the main tendencies of global sourcing, but another is finding the right suppliers without any excess time or resources wasted. The recommendations and insights found through Big Data Algorithms can help businesses find the suitable products they need.

Through the reliable B2B sourcing platform, buyers can access a global pool of trustworthy suppliers, which enables the ability to research, sends invites for the request for quotations (RFQ), place an order immediately with the “Ready to Order” feature, and compares prices and product features at scale, partnering with reliable suppliers to get the best offer that fits their specific needs.

With the smart use of the Big Data Algorithm on the global sourcing platform, businesses can receive more precise and customized recommendations based on their sourcing preferences and product attributes, plus high-demand product ranking for smarter decision-making. Tailored product recommendations powered by big data analytics for small businesses can enhance the user experience and enable swifter responses with reduced risk.

Understand the market needs to grow business

Most online marketplaces provide small businesses with deeper insights that help identify market opportunities for business growth.

Taking Global Sources as an example, small businesses can get updated sourcing intelligence through the Sourcing Knowledge Center, and find more opportunities from various international physical tradeshows, to interact with suppliers directly and identify the latest in-demand products and innovations. Together with gaining market insights, understanding the upcoming trends, and receiving recommendations from professional analysts, attending online workshops conducted by top-notch e-Commerce leaders, the sourcing platform provides access to insider tips, case studies and strategic advice, which can get buyers closer to their desired outcome.

Small businesses have to deal with a great many struggles for global sourcing. In moving from domestic purchasing, an online B2B sourcing marketplace can take care of the common challenges associated with global sourcing. It can also help connect authentic buyers and verified suppliers globally with personalized sourcing solutions and reliable market data, enabling them to exploit new business opportunities and adapt to market changes quickly. This integration will make it easier for small businesses to take over the market with confidence.