How do you find new suppliers after Brexit?
- by Ross McCarthy
- Oct 20, 2020
- Updated Feb 3, 2021
- 5 min read
We have worked on a wide range of projects arising from various forms of disruption over the past several years, including Brexit. These projects cover situations including but aren't limited to:
- Helping companies change suppliers from UK-based suppliers to suppliers based elsewhere, typically, though not always, in the EU;
- Finding ways of bypassing agents or distributors by going direct to factories and manufacturers, which is a particular issue for peripheral markets; and
- Assisting companies to cope with trade disruption and identifying new growth opportunities.
One thing that we have found to be common in many of these cases, is a sense of helplessness in finding new ways of meeting the company’s requirements. This does not need to be the case.
The risks associated with Brexit are well documented at this stage as shown in the diagram below. Regulatory divergence, tariff barriers and other changes to sourcing patterns will impact on cost and profitability. Sourcing better and driving your own market is key to remaining competitive and in control of your product options.
Sluamor Resources for Sourcing Suppliers
There are several ways to try and find / source new suppliers, which include using our services at Sluamor. These include:
- Trade bodies and employer networks.
A list of trade bodies and employer networks across the EEA and in some selected third states that companies can contact.
- Links to trade ambassadors.
Details of trade bodies representing key import and/or manufacturing markets in the resources section of the site.
- Using Big Data.
We offer a service that identifies producers and manufacturers from around the world, for companies that are looking to identify new suppliers. Drop us a note via our Contact page if you'd like to discuss.
- Group Purchasing Schemes and Expenditure pooling.
Our platform can assist companies that are looking to setup group purchasing networks to maximise value for money. Start by adding a Marketplace pitch.
Key Tips for Sourcing Suppliers
Some key tips for successfully sourcing suppliers include:
- Clear Specifications.
Invest time in developing a good specification of what you want from suppliers so that they can clearly determine what you need. In our experience, in the private sector, not enough time is typically put into this. It is possible that this will need to be translated into the language of the market you are targeting but this is not always the case.
- Smart Sourcing.
Try to maximise your potential negotiation capacity. Countries like Ireland or other peripheral markets are often forced to deal with agents and distributors based in countries like the UK or the Netherlands. This is because many companies in North America or Asia appoint distributors to manage their presence / market access in the EU. If a company knows what it wants to meet a customer requirement, precise specifications can help identify non-OEM (original equipment manufacturer) suppliers that allow them to bypass restrictive, costly product access through official distributors. Sourcing strategies like this can have a dramatic impact on the competitiveness of the price a company can bring to the market by going direct to a plant.
- Source Privately or Openly.
Use the sourcing mode that best suits your requirements. There are two modes on Sluamor that companies can consider when sourcing new suppliers.
- Source Suppliers Privately.
The Private mode is useful for commercially sensitive specifications, and operates on an invite only basis. It is useful in various cases, e.g., if a company wishes to make contact with alternative suppliers without potentially alerting existing suppliers, or if you want to restrict the number of proposals you receive.
- Source Suppliers Publicly.
The public mode is useful for maximising interest in an offer. It works well for purchasing networks as well as private businesses seeking quotes for specific projects.
With the transition period for Brexit officially ending on 31 December this year, there are still many UK, Irish and other EU companies that haven't fully thought through how they will be impacted after the UK's departure from the EU. The government is so worried about this that the Company Registrations Office in Ireland is writing to all companies regularly at the time of publication urging them to prepare for Brexit. Media formats like radio are carrying constant public information campaigns.
In the absence of a Brexit deal or even clarity on whether a "no deal" scenario is likely, we still do not know what EU-UK trade will look like in 2021. We still do not know if there will be tariffs, and whether the associated costs will apply. InterTradeIreland, an Ireland/UK funded trade promotion body has a very useful tariff checker that can be used to calculate the tariffs that may apply. Non-tariff costs will still apply in many cases, even if there is a deal. Non-tariff costs include increased paperwork, the need for customs declarations and delays in supply chains.
The expected changes arising from even the most benign version of Brexit may make contracts between EU and UK companies more expensive than they currently are worth. As such, many affected buyers will be forced to find alternative suppliers, with EU companies increasingly seeking suppliers from elsewhere (e.g., in the EU) while ensuring that their supplies will not be delivered via the UK. Since 2017, the Chartered Institute of Procurement and Supply (CIPS) has published a series of reports, and the most recent CIPS report contains relevant information and insights from procurement and supply chain managers across the UK and the EU.
In all cases, you can use Sluamor's services to assist you in finding alternative supplier options. Just send us a message via our Contact page if you'd like to discuss, or you can forge ahead and subscribe to share your requirements.
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