5 Advantages of Using a Domestic Supplier
Sperry & Rice
Monday May 23, 2022
Why do brands and businesses source components and products internationally? Historically, the choice has been based on perceived lower costs. But in today’s economic environment, when costs outside the actual component price are factored in, international sourcing no longer provides as large a cost savings as it has in the past.
Let’s look at 5 advantages of sourcing rubber domestically, including lower shipping costs, increased flexibility, shorter lead times, better supply chain control, and building consumer confidence. Finally, we’ll help you get started with domestic rubber sourcing.
1) Reduced Logistics Costs
In general, raw material costs are comparable from both domestic and international suppliers, but when you factor in government subsidies and tariffs, there is a noticeable difference. Add in higher international shipping costs, both ocean and air freight, and domestic suppliers end up being a much more cost-effective option.
For example, as of June 2022, 40’ container shipping rates from China to the U.S. have been hovering around $10,000. At the start of 2020, the average price to ship a 40’ container from China to the U.S. was $1,500 – that’s a ten-fold increase in just 2 years. (Marketplace Pulse, 2022) Adding insult to injury is a container shortage, pushing costs up 15% (from $3,800 to $4,410) to buy a 40’ high-cube container. (Global Trade, 2022) With domestic rubber suppliers, labor costs might be a bit higher, but logistics costs will be considerably lower.
2) Increased Flexibility
When you need to increase production because of a sudden spike in demand, or decrease output because of slower sales, a domestic rubber supplier has more ability and the agility to adjust to your needs.
Domestic rubber suppliers can provide smaller production runs and smaller minimum order quantities. International suppliers usually have much higher MOQs and may require that thousands of components, or enough to fill a container, be ordered. A domestic supplier can quickly change their schedule and make what you need, which means you can order for today rather than having to forecast demand three or more months out.
3) Shorter Lead Times
In addition to increased flexibility, you get the added benefit of shorter lead times – by weeks or months – the amount of time it would take your parts to ship from an international supplier.
If a lucrative business opportunity arises and you must act quickly, wouldn’t you rather tell your customer you can fulfill the order in a matter of weeks rather than months? A domestic rubber supplier allows you the ability to say “yes” without reservations when opportunities present themselves.
Sperry & Rice has felt the economic impacts of the supply chain in 2022 plaguing most American businesses, but we are extremely proud to say that we have reduced our lead time to 8 weeks, with the goal of bringing it down to 4 weeks.
With reduced lead times, our customers see the benefit of:
- Faster replenishment of stock to avoid lost sales and lost customers
- Meeting deadlines consistently
- Increase in cash flow because of increased order fulfillment
In addition to saving time, you also save money. As mentioned, shipping domestically is far less expensive than shipping from an international supplier, and domestic freight carriers can be leveraged, while ocean shipping rates and schedules are far less flexible.
4) Better Supply Chain Control
When it comes to retaining control over your supply chain, there is nothing more effective than the ability to meet face-to-face with your supplier and tour their production facilities. Staying in touch with your supplier throughout the production process helps reduce the probability of an issue arising, and if one does, fixing it before it becomes a problem.
For example, if there is a change in specifications or materials, a domestic rubber supplier can get you updated samples quickly so you can test them for performance and fit before they are put into production. This type of responsiveness and attention to detail will make you a more valuable partner in your customers’ eyes.
5) Build Consumer Confidence
There’s nothing better than being able to proudly state that your product is “Made in the U.S.A.” Plus, it’s no secret that end-user consumers prefer locally sourced goods; your customers do too.
When your customers can buy your products and / or components with confidence, your business gains trust, builds brand awareness and loyalty, and boosts its brand image with prospects.
An added benefit: local sourcing helps the local environment and community.
Ready to switch to a domestic supplier?
If you’re weighing your options and considering switching to a domestic rubber supplier, the first thing to do is research companies that match your brand values and can competently design and produce the component you need.
If that product happens to be rubber, we invite you to review our quoting process to better understand how we work and see if we would be a good fit. As always, feel free to contact us with any questions you may have!