THE CHALLENGES OF SOURCING ABROAD
Trading with foreign businesses differs from trading within Canada. New challenges are raised by the distances involved, by variations between countries, and by rules that govern international trading.
Legal considerations
It's not safe to assume that the same rules will apply abroad as in Canada. Factors to consider include:
whether there are import or export restrictions at either end of the transaction
whether technical standards in your supplier's country meet Canadian requirements
who is liable if a product causes harm or loss
whether your imported goods infringe any intellectual property rights
who bears insurance costs at each stage of transit
A well-drafted written contract will help to avoid disagreements or disputes. See the page in this guide on drawing up contracts with foreign suppliers.
Other considerations
There is a range of other factors you should bear in mind:
Language differences matter. It's not just a question of communication - make sure any labelling or other printed materials are error-free.
Payment methods for international transactions are a bit more complicated. See the page in this guide on methods of paying foreign suppliers.
Shipping procedures are also more complex, given the increased distances and the need to cross borders.
Understanding the business and social practices of your supplier's country can help build trust and develop relationships. However, remember that Canadian consumers may judge you on the business practices of your suppliers.
Think about how many suppliers you need. If you have too few you risk suffering supply-chain disruption if they have problems. If you have too many your managerial burden will increase.
The origin of your goods can affect the level of duty you pay. Some goods attract a preferential rate of duty, so you need to check where your supplier's raw materials have come from. Visiting suppliers is the best way of doing this.