Understanding what drives these costs up and how to leverage the pressure points can still allow savvy buyers to save plenty.
As oil heads north of $100 per barrel again, the resulting higher fuel costs will again force global trade to focus on such as USA, Mexico and Canada versus the Asia Pacific region which is more than 7500 miles away.
Hopefully we learned our lesson less than three years ago? If so, we should all be aware of suppliers that will not require us to buy goods from so far away that transportation and logistics costs will kill our P&L.
Let’s remember that the North American Free Trade Agreement or NAFTA allows us to not just near shore many of our purchases but to localize them. This reduces transportation expenses. North America is made up of the United States, Canada and Mexico. Although NAFTA is primarily focused on agricultural products traded between North American Country’s it also represents one of one of the most successful trade agreements in history and has contributed significantly to increases in agricultural trade and investment between the United States, Canada and Mexico. There are plenty of opportunities in the regional low cost manufacturing bases could have a related regional impact on keeping costs lower on many types of retail products.
Finding tools that can aide our search in finding new sources of supply is imperative as demand rises and causes strain on commodities. Are you aware that a tool like this already exists which can provide data at a glance on 928 general merchandise suppliers located in Mexico, 1,585 Grocery Suppliers located in Canada, and 1,940 Pharmaceutical suppliers located in the United States. If not, please visit the SafeSourceIt Query Tool to learn more. Your P&L will thank you and so will your customers when you don’t raise their prices.
We look forward to and appreciate your comments.