The Benefits of Domestic Sourcing: How to Get Started
All businesses must source their raw materials or their products from manufacturers and suppliers. However, many businesses default to ordering their raw materials or products from distant but cheap suppliers, believing them to be the best choice compared to local companies.
But distant suppliers and manufacturers are not always the best option. In fact, there are plenty of benefits to domestic sourcing that small business owners have discovered and capitalized on for years. Businesses of all sizes might find that domestic sourcing is better suited to their budget or brand-level goals.
Let’s take a deep dive into the various advantages of domestic sourcing, explore why domestic sourcing might be a good choice for any organization looking to maximize profits, and explain how any brand can get started with domestic sourcing now.
What is Domestic Sourcing?
Domestic sourcing is the practice of sourcing your products and/or raw materials from local or “domestic” sources. Domestic sources are distinguished from foreign or international sources by their proximity to your retail place of business (where you actually sell what you create or offer).
Of course, domestic can mean different things for different businesses. For instance, most American companies can practice domestic sourcing by purchasing their products or raw materials from American providers.
But domestic can mean even more local than just within the same country. If your business really wants to be eco-friendly or pursue any of the other benefits described above, you could try to find sources for your products within a targeted geographic area depending on your goals.
However, different businesses will have different sourcing opportunities based on what they need to make and where manufacturers are located.
Benefits of Domestic Sourcing
Regardless of how you plan to practice domestic sourcing, most organizations look into domestic sourcing due to the benefits it provides to their production and manufacturing processes. Here are just a few of the most major advantages that domestic sourcing can bring to the table.
For one, domestic sourcing can provide much greater supply chain management. It’s a fact of economics that, as you gain distance from elements in your supply chain, you lose direct control over those elements. This introduces the possibility of product failure or issues that you didn’t anticipate or intend.
For example, a physical issue with one of your products may not be discovered until it has already been created in huge numbers and shipped overseas. By the time a customer finds the issue, it’s far too late to correct it.
The risk of control loss extends to more than just the physical aspects of your products or materials, however. If your supplier is thousands of miles away, you have less control over that supplier and they will be less likely to remember you as their first priority compared to another client that is close by.
Of course, this depends directly on the supplier. Harper+Scott, for example, practices international business and has offices both in the United States and in China to facilitate direct relationships with each of its clients.
But the point still stands. When it comes to retaining total control over your supply chain, nothing beats having the ability to have a face-to-face meeting with your supplier if necessary or to physically examine products as they are being produced.
For another, domestic sourcing gives you greater flexibility over your supply chain and manufacturing processes. In the fast-paced business environment of the modern economy, opportunities can arise and challenges can crop up at any moment.
Fortunately, domestic suppliers are usually a little more responsive and reactive compared to suppliers that are much farther away.
For instance, a local or domestic supplier could help you create much more product needed to support suddenly increased but temporary demand for your brand’s goods. Given the fast communication between you two, you could drop back down to regular production levels once the flash in a pan selling opportunity has passed.
The same is true if you need to slow down production for one reason or another. A domestic source for your manufactured goods can more easily place a halt on future batches until you have things under control. You don’t have to worry about a big batch of goods being shipped across the ocean and being unable to stop them if you don’t have the inventory space for them when they arrive.
Domestic sourcing is smart for other reasons as well. For instance, it usually results in reduced costs for your brand overall. You can tighten the cost of your supply chain by ordering your goods or raw materials from local sources. Since you have to transport those things a shorter distance, your supply chain will cost less in total.
The flip side of saving costs with production means that you’ll actually enjoy greater ROI. If it costs you $50 to manufacture a product from a distant manufacturer but costs $25 to manufacture a product with a domestic source, you’ll enjoy a new profit of $25 presuming you don’t change the price of the product when it reaches the customer.
Therefore, domestic sourcing can be a significant way for businesses with tight budgets to increase revenue and cut costs at the same time, all without changing much about their manufacturing or production processes.
Domestic sourcing can also help you launch new products more quickly. Again, this is related to travel time, and the lesser amount of it required when getting your products from local manufacturers.
Domestic sourcing means you can quickly make changes to products before they launch and still get your expected batch of products out on time to meet quarterly goals. This can be advantageous in certain industries where iteration and product evolution are facts of life and when multiple versions of a product are expected to launch within a relatively short window.
Better for the Environment – Both Natural and Local Business
Lastly, domestic sourcing is better for the environment in most cases. Domestic sourcing means less fuel needs to be used to transport products to an organization from the manufacturer and oftentimes that less energy needs to be used to create the products overall.
Plus, sourcing locally means that your organization will be supporting local businesses, which can strengthen the surrounding economy and directly give local customers more money to spend on your brand. Everybody wins.
How to Find Domestic Sources for Products?
With all of these benefits spelled out, it’s important to know how executives can find domestic sources for their products or raw materials. There are multiple ways to find a good domestic source for your needs.
Find Companies Whose Ideals Align with Yours
For starters, you can look for companies that have established ideals for mission statements that align with those of your brand. For example, Harper+Scott is dedicated to promoting eco-friendly manufacturing and recycling, making them a great pick for modern brands looking to boost their reputations and do their part to protect the natural environment.
But executives can also look at costs for domestic sources. Just because domestic sourcing is often cheaper doesn’t mean that every domestic supplier will demand the same price for production. Indeed, executives should compare different prices from various suppliers or studios before signing on the dotted line.
You should always try to find the most affordable domestic supplier available (assuming that quality is the same among all your options, of course).
Keep Your Options Flexible
Lastly, don’t be afraid to keep your options flexible and have multiple domestic suppliers on hand if needed. Putting all of your manufacturing eggs into a single basket can lead to disaster if that manufacturer goes under for one reason or another.
Having multiple domestic suppliers working with your business will give you multiple avenues for product manufacturing and recycling: a beneficial state if you want your business to weather future and inevitable economic downturns. Having multiple domestic suppliers means that your customers will never need to deal with a lack of product or that you’ll be unable to fill customer orders.
Being consistent and reliable to your customers can do wonders for your brand’s reputation and overall consumer relations.
In the end, domestic sourcing provides a wide range of benefits and is a strategically smart option for most businesses that can find good partners. It’s an especially good tactic for small businesses whose ties to local communities are often more rigid and important than larger businesses with an international presence.
The good news is that there are plenty of domestic suppliers that can address your sourcing needs. Harper+Scott might just be the ideal domestic supplier for your branded or private label products or other design jobs. Don’t hesitate to contact us today. We’re happy to see what we can do for your organization.