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Archive for November, 2010

Pros and Cons of Using a Foreign Manufacturer

Monday, November 8th, 2010

Many products nowadays are manufactured overseas. If you have a product that you are looking to have manufactured, there are a few things to think about before you start decide whether to work with a domestic or foreign manufacturer.

Are Costs Higher? – United States businesses many times use foreign manufacturers because the cost of manufacturing a product in other countries is usually lower than the cost of manufacturing it in the US. Nevertheless, it is important to be aware of the additional costs of using a foreign manufacturer versus having the product produced domestically. Two additional costs of using an foreign manufacturer are shipping and bank fees. Shipping costs are obviously much higher when doing business with another country. As for bank fees, many foreign businesses will only accept payments via bank transfer. The fees for making bank transfers vary from bank to bank so look into what these will be ahead of time.

Are Laws More Complex? – Imports from foreign countries to the United States are regulated by the U.S. Customs and Border Protection agency. The regulations administered by this agency are highly complex and detailed, and it is very important for anyone interested in dealing with a manufacturer in another country to determine exactly which regulations apply to the product or products being imported. Duties on imports are also additional costs of importing products.

How Can I Protect Myself? – Because most, if not all, of your correspondence with a foreign manufacturer is done from a distance, it is also important for you to safeguard against the risks associated with dealing with a potentially unreliable company. For this reason, it is strongly advised to use only reputable companies that have demonstrated reliable service in the past. If a company steals your money or fails to deliver on an order, it will be far more difficult for you to take legal action against the company than it would be if you were dealing domestically. There are many resources to be found online that can help you determine whether the foreign manufacturer you are considering has shown themselves to be reliable.