When sales are slow and the future is uncertain, businesses will naturally want to rein in spending and put new projects on ice. But avoiding speculation altogether can be risky in itself.
If you were planning to test the market with a new product or start a new business this year, the ‘Brexit’ situation may have dented your confidence.
Understanding how to minimise risk through clever supply chain management will not only help you to sustain your business but can produce levels of growth that will be the envy of your competitors.
Import under FOB (Freight On Board) terms
Offer superior customer service and avoid getting stung with hidden costs.
Agreeing shipping terms with your overseas suppliers can often be an after-thought but it’s important to get this sorted as early as possible.
By agreeing FOB terms you have complete visibility and control of your stock from the moment you place an order with your supplier until your customers receive their delivery. This is invaluable if you want to offer superior customer service and manage your clients’ expectations.
Your supplier may want to ship under EXW or pre-paid terms, this will only work in their interests, not yours and can result in additional unexpected costs and/or snags or seizure of stock that you’ve paid for.
Export under EXW (Ex Works) terms
Avoid responsibility for situations beyond your control.
As soon as an export order has been dispatched your customer takes full responsibility for any unexpected costs or delays.
If it is not possible to negotiate EXW (for example, you need to retain control of your goods until they reach their destination), it is essential that you utilize a freight forwarder that you have 100% confidence in.
Understand the advantages of AEO (Authorsied Economic Operator) status
“AEO status is an internationally recognised quality mark indicating that your role in the international supply chain is secure, and that your customs controls and procedures are efficient and compliant.” (GOV.UK)
Staying on the right side of HMRC will stand your company in good stead as it grows and develops. Not only that, managing your supply chain under AEO status enables you to take advantage of various processes that help to retain cash in your business.
Outsourced stock handling and storage
Minimise the cost of market testing your products.
Avoiding the necessity to employ staff and rent/buy warehouse premises keeps your business lean and agile, allowing you to maintain focus on sales, marketing and product development.
By partnering with a 3PL you can test the market with a small quantity of stock initially. Learning lessons won’t cost you your business and once you hit that sweet spot it’s easy to scale up rapidly.
Related Blogs
Velta Brexit survival guide – Cash flow
Velta Brexit survival guide – Export markets
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