Home » What is the Solution For Wholesale Sourcing Overseas?

What is the Solution For Wholesale Sourcing Overseas?

International product sourcing is a topic that has come to light in the b2b industry recently. The spread of the Coronavirus disease in China has caused a lot of problems for manufacturers and suppliers. Many have actually been forced to pause operations to prevent any further catastrophe. The impact of the new Coronavirus on the supply chain has been detrimental for wholesale businesses. Manufacturers, distributors, and retailers who have established warehouses in China are seeing the impacts of this public safety concern. The fear is that more workers will become sick and the virus will spread further. This halt on production has caused an enormous economic ripple that will be seen in the global economy for years to come. 

It has become a global health emergency that each country is working very hard to address and mitigate. There are active measures in place to secure the containment of the new Coronavirus. However, these public safety measures have put a halt on production for a variety of major companies. So how can we prevent this type of economic disaster in the future? In this blog we will review what exactly this new virus is, what effect it is having on wholesalers, and how wholesalers can work to prevent more production challenges in the future. 

What is the New Coronavirus?

Let’s take a look at what this disease is and how it came about in China. According to the Center For Disease Control, Coronavirus is a type of disease that is spread between species. This new Coronavirus is similar to both MERS-CoV (Middle East Respiratory Syndrome) and SARS-CoV (Severe Acute Respiratory Syndrome). Ultimately, it is much worse than its counterparts. This disease typically originates from animals and becomes passed on to humans from close contact. The first reported cases of this disease came from people who frequented the Huanan seafood wholesale market in the center of the Chinese city. This market also sold live and newly slaughtered animals in close proximity to humans. Close proximity provides the easiest way for a disease to spread.  

CDC Suggestions for Virus Prevention

The CDC also has been reporting that the coronavirus can be transmitted by air from people coughing or sneezing, wiping their eyes or nose after touching a contaminated surface, and after directly contacting another person who is infected with the Coronavirus. There are currently no vaccines for the coronavirus, but there are steps you can take to protect yourself. The CDC recommends frequently hand washing for at least 20 seconds, with either soap or alcohol-based sanitizers. You should also avoid contact with eyes, nose, and mouth with unwashed hands, and contact with at-risk individuals. The Guardian has also reported, “For flu, some hospital guidelines define exposure as being within six feet of an infected person who sneezes or coughs for 10 minutes or longer.” 

The CDC suggests that the risk of the Coronavirus is low for individuals in the United States who haven’t traveled to China recently. There is little worry about the virus in the United States. However, just like with any disease it is best to take the appropriate precautions as suggested by the Center For Disease Control

What Are the Impacts of the Coronavirus?

Economically, this new virus couldn’t have come at a worse time. It emerged just before China’s busiest travel season for the Lunar New Year. An estimated amount of people traveling in to China is around 600 million people, marking this time of year as the biggest holiday. As a result, many of China’s labor force requests this time off to spend with their families. This drop in the workforce makes this season the most dreaded for the industrial companies. Production is usually expected to drop by 20% during these few months and this is just from the holiday alone. 

The introduction of this highly contagious disease has forced China to extend the Lunar New Year. This means more time off for workers and an even bigger drop in production. Some companies are even requesting that employees work from home if they aren’t feeling well. The goal of the state is to prevent any further outbreak of the virus and limit the amount of public interactions. Streets that are normally bustling with holiday families this time of year are eerily empty and quiet. There is no doubt that this is a major hit to economic growth of China. 

Not only does this disease affect production, but also distributors are feeling the sting of business closures. A majority of the United States, and the world for that matter, gets their products shipped from China. With these new health concerns, distribution has been limited and in some cases stopped. 

Unable to Transport Products

It is difficult to cite the effects so far, but suppliers and distributors in the Wuhan area are working hard to find alternatives. “We do have some suppliers in the Wuhan area,” Apple CEO Tim Cook said. “All of the suppliers there are alternate sources and we’re obviously working on mitigation plans to make up for any expected production loss…With respect to supply sources that are outside the Wuhan area, the impact is less clear at this time.” Even shipping is seeing the effects of trying to contain the Coronavirus. 

Transporting products out of China is seeing a sizable decrease by half. Cathay Pacific is one of the largest air freighters for the region. The company has cut it’s transportation significantly due to the virus. The United States has enacted several travel restrictions to protect the country from the spread of the disease. These restrictions also include other air freighters and shipping vessels. 

Maritime Caution to Prevent Spreading

The United States Coast Guard has issued a safety bulletin for all owners and operators of vessels. The bulletin requires that any crew member deceased or sick must be reported. It requires that they be notified of any vessel that is arriving, within 15 days, to a U.S. port. Anything that affects maritime commerce or mariners must also be reported. 

This caution is a result of the outbreak of the Coronavirus. It is an attempt to further contain the virus and prevent it from spreading to the United States. The Port of Wuhan has been closed indefinitely. Many other global shipping vessels are expected to resume business. They are working with each country individually to address shipping concerns as they arise. Other shipping companies are largely working remotely due to a large fear of the disease spreading.  

Why Do Businesses Import Products?

A majority of wholesale businesses in the United States import their products from suppliers overseas. One of the primary reasons businesses choose to import is the cost. Overseas manufacturers can take advantage of lower wage costs and fewer regulations to charge lower prices. Basically, importing saves the company money in some areas. 

By saving money on labor and cost of products, there is often a decrease in the quality of the products. You cannot guarantee that the quality of the products you are going to get is on par with the quality your customers expect. So while you may save money in some areas, you may be losing money in terms of sales and product quality. 

They can also negotiate lower prices for domestic products. However, there are opportunities for buyers to negotiate for lower prices while seeing portions of their supply chain move closer to home. Domestic buying is becoming more popular now due to international problems disrupting supply chains. 

Product Sourcing and Distribution Overseas

There are advantages and many disadvantages to sourcing and having products distributed from overseas. As we can see from this latest public health scare in China, the disadvantages of relying on companies overseas are huge. 

First, let’s take a look at the advantages of overseas product sourcing.  

  • availability of world-class technology that exists in certain markets
  • access to cutting-edge research, design or specialized knowledge
  • proximity to raw materials that may be unavailable domestically
  • manufacturing capabilities that may unavailable domestically
  • higher quality goods compared to domestic products
  • a great number of potential suppliers you can choose from

While the advantages seem overwhelming let’s review the disadvantages of overseas product sourcing. 

  • dealing with increased rules and regulations that apply in international markets
  • the various customs requirements
  • cultural and language differences
  • quality risks
  • currency fluctuations
  • complicated logistics

These obstacles are often too much of a burden on wholesale business operations. They are also the reason why many businesses decide to remain with local suppliers. In light of the current situation in China, many wholesalers are determining what exactly they can do in the future to avoid production setbacks. New trade deals provide additional challenges for commerce between countries. Businesses in a variety of industries stand to gain a lot just from switching to domestic sources. 

How Does This Affect Wholesalers?

Wholesalers are concerned about the outbreak of this disease mainly due to factory and shipping closures. If you get materials or even products from China, then you certainly have noticed the impact of the Coronavirus. As an example, one Los Angeles manufacturer gets all of their products and materials from China. Because of this outbreak, they have to wait for shipping to resume so they can get their supplies. This puts the wholesale business extremely behind on production. This dependence on China has put not only this wholesaler, but many, in an unproductive position. 

The real problem that is brought to light by this unfortunate disease is product sourcing in other countries. In the wholesale industry, businesses typically get materials or products overseas. This has just been the traditional way that wholesale companies operate. The wholesale industry is changing, as we all know. E-commerce and the digital age have given wholesalers new tools to solve challenges. What is the solution to this dependence? The logical solution for wholesalers is to start sourcing products and supplies domestically to avoid any of these potential complications. 

Domestic Product Sourcing 

One of the solutions that e-commerce provides wholesalers is the ability to search online for domestic businesses to partner with. There is no need to buy your products overseas anymore. Wholesalers have access to a vast network of manufacturers and distributors right here in the United States. The advantages to domestic sourcing are a supporting factor too. 

Avoiding international suppliers helps domestic economies flourish. Instead of dealing with issues in the global economy you can focus directly on boosting your country’s economy. Another advantage of doing business locally is that you can check the quality of the products you are receiving more easily. 

Buying internationally provides the challenge of not knowing exactly what you’re getting for the cost. If you buy locally, then you can visit the supplier and see the quality first-hand. One of the things that will make you succeed in wholesale is knowing that you are delivering your customers exactly what they expect. If the quality is lacking your customers are less likely to keep buying from your wholesale company. 

Using SeeBiz to Find Domestic Suppliers

As a solution to the problems of international sourcing, the internet provides wholesalers with the tools they need to overcome these challenges. You don’t have to rely on companies overseas to get what you need. All of the products or materials you need are available domestically. To find these suppliers you can use online tools made for the b2b community. 

SeeBiz is an example of a platform that provides networking tools for domestic sourcing. It is a b2b platform that gives wholesalers access to all local suppliers in your area. It is a cloud-based networking system that encourages the connections between wholesalers, manufacturers, and distributors. 

On this platform you can search for all distributors and suppliers available in your area and industry. If you’re looking for specific products, then you can search for those too using SeeBiz. All relevant products will appear along with the business information. SeeBiz is a valuable source for domestic products and business connections. You can avoid the hassle of international sourcing by signing-up with SeeBiz today.  

To learn more about how you can source products domestically visit https://www.seebiz.com/

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