Sourcing is the most important part of Importing.

To Import, you need or have to find Suppliers in different countries, Source these different manufacturers that will produce your Products at the Quality level, Price point and Volume that you require most importantly.

Yes, I use the word “Suppliers” not supplier, you need to diversify your sources to minimize your dependency risk level on these partners which is the actual role they play in the relationship.

 How do we Source? What do we look for?

                                           

Here is a Pre-Sourcing Supplier check list to screen and select the proper partner to make your Products.

 Supplier Characteristics- To name a few:

Cost                                           Reputation

Quality                                     Certifications

Delivery                                   Collaboration

Location                                  Customer Base

Capacity                                   Financial Health

Flexibility                                Social Responsibility

Lead Time                                Product Development

This list is not new nor ingenious, it has been around for years and some companies use it.  However, the majority of them threw these characteristics out the window and are simply being reactive, which is what we are experiencing today, now at this moment, in all industries.  

 What did U.S. Manufacturers, Importers, Retailers & others Do?

 

Wait for the storm to pass, we call that Denial in Business, or being passive.

Auto Manufacturers are Waiting for someone to make the Chips for them, Brand Companies are Waiting for Plants in China to supply them with Goods, Retailers are on the Waiting List to have their Goods shipped from China in the next 4 to 5 Months, Contractors are Waiting for Products from China to service the Housing industry and the list is endless.

Yes, this means the Christmas Season for Retailers is in jeopardy as 50% of the Retail Sales for 2021 take place in the last quarter. 

Fact- This year, Retailers may not have Christmas goods until February or March 2022.

All the virus did is expose the deficiencies and weaknesses our companies/industries have in their Importing process & approach.  Relying on One supplier, One Source/Country is breaking the golden rule of not putting all your eggs in one basket, something very basic we teach business students and kids.

Sadly, Fortune 500, 1000 and more— follow this strategy: One Supplier.

 What happened to that Old Strategy of Diversification?

 When most companies today rely on that one supplier, or they follow whomever got there first and use that same manufacturer, which is why today we are living the consequences of the Incompetence of these Companies and their CEO’s. 

*** They cannot find suppliers to make goods for them, they are uncapable and/or unwilling to make it themselves.

*** They cannot import their products or even ship these goods, cannot fill orders for retailers

*** They have no strategy really except for waiting for that bus that will never come. 

 Facts: the Auto industry is now looking at the 3rd quarter of 2022 to maybe, hopefully, possibly if we are lucky, resolve the chips problem, and if you remember a short while ago it was expected in the 1st quarter of 2022.  The result of their inaction is an increase in prices for new cars, ranging anywhere from 15% to 30% over list price. Consumers will be paying 20% to 40% more for that new car compared to last year, and that penalty will go up even higher over time.  This is just the beginning.

Most Clothing Brands for Men, Women and Children, No longer offer you the variety of Styles, Colors, Designs, Sizes, Do you wonder Why???   It is not because of the virus as they all claim, but rather the result of their poorly designed supply chain system if you want to call it that. 

Samsung is delaying the launching of new phones and other electronic products due to the lack of chips and parts in general.  Fancy food products from Europe, Australia and other parts of the world are also in short supply, empty shelves in specialty stores.  Some of these Plants have gone out of business already and may not or will not be replaced, that is the sad reality not being addressed.

Shipping cost Today for a container from China to the U.S. is $ 18,000 to $ 20,000, pre-covid it was $ 3,500.00, which translates into a 471% cost increase- (this is not a typo).  The latter took place this year, Yes, in 2021 mostly, and by the way such an increase is happening on shipments coming from China ONLY.  However, the cost remained about the same from other parts of the world or went up slightly due to fuel cost.

How Magical, Pointless to comment, very simple to figure out.

 A very concerning result from above: Logistics and/or Shipping Companies are now, Today in October 2021, requiring payment in advance at the time you make the booking for your shipment Overseas, in other words the Importer has to pay about 2 months prior to receiving the shipment.  Customs duties are now, also Today, due in advance before clearing your goods, and any other trucking or miscellaneous expenses are billed upfront prior to providing the service. 

My point is really simple, last month in September 2021, Importers were treated with distinction and respect, they were extended credit terms and were used to paying shipping, customs, trucking bills after their merchandise was delivered.  Unfortunately, All above facilities have been taking away and unlikely to be reinstated anytime soon.   WHY? Because Logistics & shipping companies can no longer finance a 471% increase in cost from their own pocket, they are not a finance institution and work on very small margins. 

 Such a major change in the industry will devastate small and mid-size importers, and will definitely contribute to their demise.  Additional Costs of Financing Imports will hurt All.  That 30% inflation consumers are feeling on everyday products will go up much higher as a result.

 The analysts estimating the supply chain being impacted for a 3-year period may want to reconsider that time frame.

 Two years have elapsed since the start of the virus and companies basically did Nothing to address the core problems except for waiting. 

To be realistic, we are looking at 5 to 10 years to hopefully reach a point where we have a better handle on our supply chain problems.

Experts in the shipping industry are now expecting Ocean Freight Disruption to continue into end of 2023, which is 4 years from the start of the virus.

 Consequences are more severe, widespread and crushing than anticipated.

 All I am doing is stating the current state of affairs Today.  Alas, this is not even an opinion but the sad reality.  

 The big question for CEO’s is:

Where is the tipping point?

When will companies start making products Locally?

Will they continue raising prices and forcing the consumer to pay for the insanity?

SOLUTION:

Yes, we offer Solutions for such difficult times. 

The Solution is Obvious and Simple:

Produce Domestically Now- 25% to 30% – of your Products and Import the rest.

That is what reputable companies used to do in the past when they were loyal to their stakeholders.  However, this loyalty has been thrown out the window and the ocean when greed sunk in the early 2000’s, and CEO’s became Loyal to their Seats and Pockets Only.  The results support this comment.  Complacency and Denial are ruling today, consumers are paying the price for companies’ mistakes.

Facts: Just a few—Made in USA

*** All your HBA (Health & Beauty Aids) are Made in USA such as Toothpaste, Mouthwash, Deodorant, Moisturizers, Shampoos, etc.—

*** Canned Beans, Vegetables, Soups, Frozen Vegetables— are Made in USA

*** Detergents, Cleaners, Disinfectants, etc.—are Made in USA

*** Papers products, Paper towels, Toilet paper, etc.— are Made in USA

*** BMW- All their X3 models & most X5 models are Made in USA + Shipped Globally

*** All-Clad- Made in USA

*** Small selection of over 100 Brands- Made in USA- from whole variety of industries: Hart Schaffner Marx, Hanky Panky, Boswell, Hickey Freeman, Joseph Abboud, 3M, Nestle, Capps shoe company, Rancourt & Co., ABC Hammers, Aloris, Braun Ability, Vandersteen Audio, Stickley, Cutco Cutlery, Kettel Pizza, Nordic Ware, Bliss, Jardin du Soliel, Stetson, Dearborn Denim, Todd Shelton————-

 The answer is Yes, we make just about anything in the USA,

and these Companies make a profit and have excellent supply chain.

  MANUFACTURING LOCALLY
HOME COUNTRY

Advantages to Keeping Production Local- Just a few:

  • Protecting your IPR (Intellectual Property Rights)
  • Ability To Launch Products Faster
  • Low Minimums
  • Quick Turn-Around Times
  • Lower shipping cost
  • Better Quality Control
  • Ease of Communication

                                                                                                                    

What are Importers doing???   What are Retailers doing???

Apparently, the same exact thing as the Auto Industry did- Not Much

They are Simply Increasing Prices on the Consumer.

 Sad Consequences- Consumers are paying for this-

 

 We Source Products for Companies and Solve their Problems.

 One Simple question, What is Your Strategy?

What Steps are Needed?

 

We help our clients who are Small Businesses, Solve their problems and Grow their Business.

 We Understand Your Needs and Share Your Dreams.

 Contact us at:                info@ppiinc.bi

       https://ppiinc.biz