These three small business owners found creative ways to make local sourcing work for them.
Local sourcing is a great way for your business to provide jobs for your community, but many small business owners worry that the cost of working with local vendors is too high. These three business owners found ways to make local sourcing work for them.
Make it a win-win.
Haralee Weintraub, owner of specialty garment retailer Haralee.com based in Portland, Ore., discovered that her local manufacturer experienced a slow period during the summer season. She now plans her production runs around her manufacturer’s slow season, and she’s able to get lower rates and faster turnaround times as a result. In return, her manufacturer stays busy throughout the year. "Partnering and understanding what's happening with them and how we can all benefit has really worked out," she says.
Do some of the legwork.
When Anna Jones founded AnnaAndEve.com, a baby product company that sells their specially designed Swaddle Strap, she and her husband were committed to local sourcing for economic and moral reasons.
After extensive research, they were able to find a local manufacturer in the city where they’re based, Chicago. Since their manufacturer is local, they’re able to cut costs by doing a little extra work themselves. "We purchase the fabric ourselves, we bring the materials to them, we pick up the products. I do quality control, and we package them ourselves, too," she says.
Consider what you're saving.
When searching for a local vendor, many small business owners realize that the money saved in shipping and transportation costs outweighs the higher cost of local sourcing.
Evadne Giannini, an environmental consultant with the firm Hospitality Green in Mountaindale, N.Y., says rising transportation costs have made local sourcing more affordable. "When you factor in the transportation to move material into different regions, sometimes there is not a big cost difference," she says.
Barry Weinstein, CEO of specialty pillowcase retailer Pillowcase Studies in New York, says it’s also important to consider additional benefits to local sourcing beyond the dollars.
"There's a lot more you can lose than dollars," he says, including the reputational risk of trusting an overseas producer whose manufacturing practices may not follow U.S. safety standards; the complicated accounting necessary for international business dealings; the risk of mistakes that could take weeks to correct due to long shipping times; and consumer trust. "I may be able to save a penny on a product, but it’s likely going to show up late, and it’s more likely to have mistakes, and people are also wary so I may lose business over that."
In the end, he says, outsourcing usually isn’t worth the trouble.