Are you looking to improve your global trade management?
Global trade management has grown increasingly difficult in 2021. In the past, manufacturers could simply drop a box of product at a local warehouse and have full control over their inventory until it was time to ship it out again. Now companies must find new ways for handling expensive labor costs and dealing with fluctuating currencies.
Global Trade Management has become a far complex process, but it doesn’t have to be. In fact, we believe that with the right tools and strategies in place, Global Trade Managerment can become an efficient and streamline part of your business.
So how can you simplify Global Trade Management?
Well, keep reading to discover seven tips for managing global trade:
1) Outsource
If you already have a supplier who specializes in your industry, consider outsourcing some business processes to them as well. For example, if you manufacture guitar parts but source all your wood from another company, consider having your headstock machining done by the machinist as well so that you can maximize economies of scale throughout your supply chain.
If this is not possible, then at least look into outsourcing any transportation and distribution to a third-party logistics company so you can focus on your core competencies.
2) Watch Out for Labor Cost
In 2021, labor costs are much more than just hourly wages. In many places such as the United States and Great Britain, regulatory costs have skyrocketed due to stricter environmental controls and laws designed to protect workers’ rights. Emerging markets like India and China offer cheaper labor but come with added risks of terrorism, government instability, and cybercrime.
Try to find a balance that allows you to keep production in your home country while still maintaining low overhead costs. You find out how global trade transformed from labor arbitrage to high-skill knowledge work.
3) Use Raw Material Forward Contracts
The price for raw materials fluctuates with supply and demand, but you can avoid these fluctuations if you use forward contracts. For example, if lumber prices are currently high but you think they may drop in the future, try contacting your supplier for a raw material forward contract.
This will allow you to lock in a price that is lower than current market rates allowing you to stay competitive for longer.
4) Standardize Systems and Processes
Lowering overhead costs requires more than just outsourcing; it requires standardizing internal business processes as well. Start by writing up all the steps involved in each process so every employee knows what needs to be done at any given time.
Then group similar tasks together whenever possible so one person isn’t doing many different things at once. Finally, design your systems so employees don’t need to re-learn them every time they change positions.
5) Focus on Product Quality
Your customers won’t care about your problems if the final product is subpar. Make sure you have a strong quality assurance department that follows best practices for inspection to ensure that there are no defects in your manufacturing process or finished goods.
As long as defect rates are low, you might even want to consider letting customers find some minor flaws themselves so they keep coming back for more. This will not only increase sales but also reduce tariffs imposed by certain markets due to poor quality control standards.
6) Get Creative with Sales Tactics
If raw material prices are too high or currency fluctuations make it difficult to compete in international markets, try marketing instead of production. For example, if the price of steel is too high for you to make competitively priced guitar necks then consider offering higher-priced custom kits that let customers choose their own wood and hardware.
Furthermore, exploring alternative sales channels like direct mail or eCommerce can help you access new markets without sacrificing your margins.
7) Follow Industry Trends
It’s easy to get stuck doing things the same way year after year but staying stagnant in today’s global business environment can be dangerous. See what other companies are doing by reading trade publications, following industry trends on social media, and participating in conferences.
New technologies often lead to changes in production methods so try to stay on top of these advancements to gain a competitive edge over others in your market. Trade management has changed a lot in the last ten years and it’s only going to change more during this time of globalization.
Although these tips might not directly help you lower costs or increase revenue, they will help you stay one step ahead of your competition as market conditions continue to evolve.
Want More Help With Global Trade Management?
Based on the projected trends in the industry, it would seem that standardizing business practices is the key to success in the global trade management space. While this may help streamline many aspects of your business model it’s important to remember that you can’t predict market conditions with complete accuracy — no one can.
Take these tips for what they are: guidelines, not rules, suggestions not mandates.
Don’t be afraid to try something new if you see an opportunity but also don’t stray too far from your core competencies if there’s a risk it might alienate customers or damage your reputation. Get creative and experiment with some different strategies while always staying safe and protecting your bottom line.
Also, don’t forget to check out our blog for more important and informative articles just like this one. We have articles on global trade compliance, working withing the global trade network and what global trade services and the most important. Check them out now!
