5 Ways Local Sourcing Can Work for Your Business

Date: July 31, 2013

The concept of local sourcing is growing far beyond its origins in the restaurant industry.

There's a new buzz phrase emerging in the small business marketplace: "Local sourcing." The concept started in restaurants, promising customers meals with greater freshness and authenticity, thanks to the use of produce and meats derived from nearby farms.

The movement has grown as small businesses have come to see the virtues of shopping close to home. Local vendors may be more willing to tailor their goods to the needs of a local buyer. It may be easier to get a last-minute delivery from the vendor around the corner. And while they may not always be able to compete on price with national players, local vendors can make up for it with a willingness to cross-promote, working with their partners to give one another a plug for mutual benefit.

Here are five ways to make local sourcing work for your business.

1. Seek mutual benefit.

In Elmira Heights, New York, Bell’s Country Coffee turns to local vendors not just as a means to acquire needed goods, but as a way to build business for itself and its partners. Owner Carrie Luckner-Zimmerman used customer referrals to locate a baker of fresh bagels just 20 miles away. She promotes the bakery on Facebook and in her store, while the bakery put her logo on its order forms and tells its customers about the coffee shop. Luckner-Zimmerman’s customers can order from the bakery right in her store. Because the two share geographic proximity, they are able to use local sourcing as a way to build their businesses.

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2. Network for partners.

For nearly every small business, the desire to source materials locally will be offset by the difficulty in finding appropriate local vendors. Ironically, the company right next door may be harder to spot than the big national vendor whose promotions and sales efforts run wider and deeper. It can take some searching, but professional associations can offer leads, as can the local chamber of commerce. Most often it comes down to networking: customers, existing suppliers, even friends and family. Any and all of these may be the key that opens the door to finding a supplier in near proximity.

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3. Try bartering.

At restaurant-equipment provider Restquip in San Francisco, Fred Phillips makes the most of his connections to local vendors by engaging in an exchange of services, or bartering. A local barter exchange balances goods and services among all its participants in money-free transactions. For instance, Phillips uses a local body shop to paint his large bakery mixers. Through the exchange, Restquip then acquires “barter credits” it gives to the body shop for its employees to use on things like entertainment and concert tickets. Barter participants all trade services as needed, and all are local vendors.

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4. Vet the vendors.

With all its virtues, local sourcing still raises concerns among some business owners. Can a small, nearby provider really deliver the quality and service of a big national brand? At Little Town restaurant in New York City, owner and managing partner Michael Sinensky has developed a series of tests to ensure quality. “We only use merchants who have all necessary certifications to ensure that our customers are only served food of the highest quality and safety. We also will take actual trips to the vendors, tour their facilities, learn what makes them special, and sample their fare.” In other words, local sourcing may demand an extra ounce of due diligence, including personal references and a hands-on inspection, to ensure the nearby partner can play on the same field with national providers.

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5. Balance the benefits.

Despite all best intentions, at the end of the day, the local marketplace may not have what you’re looking for. The big national brands got that way for a reason. Many have extensive supply chains of their own, along with cost-effective, efficient distribution methods. Business owners can still reap the benefits of local sourcing, though, by taking what they can from their immediate marketplace and promoting those elements to consumers eager to see that they are supporting the local economy, while at the same time buying what is best or necessary from further afield. It’s usually possible to strike an appropriate balance.

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