How to Find Overseas Suppliers in 5 Steps | Practical Advice

Global supply chain management is expected to reach nearly 31 billion US dollars by 2026. With this fact in mind, overseas suppliers will continue to offer opportunities for US businesses abroad for years to come.¹

This article will guide you through the process of finding the right suppliers for your business. We’ll also touch on how, with Wise Business, you can make payments to your suppliers easier and faster with their instant cross-border payments.

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Table of Contents
Domestic vs. overseas suppliers Steps to finding overseas suppliers Step 1: Consider your business niche Step 2: Research Suppliers Step 3: Choose an overseas supplier Step 4: Manage overseas suppliers Step 5: Paying overseas suppliers and saving money

Domestic vs. overseas suppliers

When it comes to sourcing products for your business, you have the option of choosing between domestic or overseas suppliers. Domestic suppliers are located within your country or region, while overseas suppliers are based in other countries.

One of the main reasons why businesses choose domestic suppliers is that they offer easier communication. Since they are located in the same country, there aren’t any language barriers or time zone differences to deal with. You can also expect faster shipping times and lower shipping costs, which can be a big deal if you're selling perishable or time-sensitive products.

If you go for an overseas supplier, you can often take advantage of lower production costs, allowing you to sell your products at a more competitive price. They may also have access to specialized materials or technologies that are not available domestically.

But of course, dealing with overseas suppliers can come with its own set of challenges. Language barriers, time zone differences, and cultural differences can make communication and collaboration difficult. Shipping times can also be longer, and there may be additional costs, such as customs, duties, and tariffs, to consider.

Steps to finding overseas suppliers

Expanding your business by sourcing products from overseas suppliers can be a great way to access new markets and find cost-effective products. But as we’ve explored above, finding reliable overseas suppliers can be challenging.

To help you tackle the process, here’s a list of steps to finding overseas suppliers that you can trust.

Step 1: Consider your business niche

Before you even think about choosing an overseas supplier and drawing up ideas, ask yourself what kind of goods you want to sell. The process of finding low-cost, fast-moving consumer goods, like household essentials or groceries, is going to be much different than unique, specialty items that aren’t as widespread.

Figuring out what kind of goods you want to sell is the first step to narrowing down your search for the right supplier. For instance, if you're looking for cheap wholesale products for resell, you may want to explore suppliers in countries with low labor costs, like Mexico or Vietnam.³ On the other hand, if you're looking for unique items, you might need to find boutique suppliers in countries that specialize in a particular craft or skill (and be willing to pay a premium for them).

You’ll also want to find out whether you can get the goods you want directly from the manufacturer rather than going through a middleman. Cutting out the middleman often means you’ll be able to negotiate a better price and save money in the long run. Lastly, You also might be able to customize your products to meet your specific needs.

Step 2: Research Suppliers

Once you’ve established exactly what kind of goods you’ll be selling, you can dive into research. There are many ways you can do this, and we’ll go over some of these here:

Individual websites

You can go ahead and visit individual supplier websites to get a clear sense of a supplier’s products and services, as well as their prices and shipping policies. But if you aren’t familiar with the market as much, it can be a time-consuming process.

B2B marketplaces

B2B marketplaces like Alibaba are a great resource as they let you search for suppliers by product category or location and often offer features like Request For Quote (RFQ) tools that make it easy to compare prices from multiple suppliers. Tundra and Faire are popular digital wholesale marketplaces for picking up large volumes of products from independent brands, which is ideal if you’re looking to source from small businesses around the world.

Purchasing goods from strangers might seem a bit unsafe, but these websites have plenty of safety measures in place to protect buyers and verify sellers.

Trade associations

Trade associations can offer valuable information about suppliers in specific industries or regions and often have “matchmaking” services that connect you with the right supplier. For example, in countries like Japan, you will find that regions are known for making specific products. In these Japanese regions, specific trade associations may be the best to contact, as they often handle the communication between you and the manufacturer.

With their extensive network of contacts, they have the ability to recommend reliable suppliers. And if you’re just starting out, their training and educational resources can definitely help you through the process entirely.

Sourcing agents

Sourcing agents are sort of like travel agents – they work as an intermediary between you and the other party and have extensive knowledge and experience in the field. A sourcing agent can handle tasks such as negotiating prices, arranging shipping and logistics, and overall navigating the complexities of international trade.

For example, for businesses looking to source products from Japan, a sourcing agent is especially valuable. Because of the country’s unique business culture and practices, it can be difficult for outsiders to deal with and bridge the cultural divide.

Trade shows

Trade shows are a fantastic face-to-face method for meeting potential suppliers in person and getting a feel for the kind of products they can provide. They can also be used as a networking opportunity, and you might even get exclusive deals or discounts as an attendee.

Visiting factories

For those that are more established or are serious about overseas sourcing, visiting factories in person is the best way to ensure product quality. This approach is very different as it requires you to travel to the supplier’s location and spend time touring their facilities. However, it’ll allow you to gain a deep understanding of what the supplier has to offer.

Your personal network

Don’t underestimate the value of your personal network when it comes to finding overseas suppliers. Reach out to contacts in your industry or personal network to see if they have any recommendations or insight into the sourcing process.

Step 3: Choose an overseas supplier

At this point, you would’ve done your due diligence and narrowed down a list of suppliers that you’d like to work with. Now it’s time to make contact and find the best final supplier for your business.

When you’re exploring your working relationship with a supplier, the first thing you want to do is get samples. Although it might take some time to do so, it's an important part of the process that determines whether their products meet your quality standards. You can order samples from multiple suppliers to compare and contrast them.

Customer reviews are also something that will help you make an informed decision. Check out feedback from businesses that have worked with the supplier, so you can get better insights on whether they’re reliable, communicative, and have a good track record.

If you’re a smaller business, keep in mind that some suppliers might require a high minimum order quantity (MOQ), which is the minimum number of units or payment total that they require. MOQs could be a barrier if you aren’t looking to order large quantities now, or if you’re a startup. But if you do plan to order larger quantities in the future, it’s possible to negotiate a lower price or order quantity upfront.

Delivery and shelf life are also key considerations, especially if you’re dealing with perishable goods (food, medication, drinks) or something similar. Make sure you ask about the supplier’s lead times (time after you order the goods for them to get to your warehouse) and shipping methods, and figure out if they align with your expectations.

For those who are brand new to sourcing overseas, you might want to consider working with a wholesale dropshipping supplier. Dropshipping is essentially like having a virtual warehouse - you sell products without actually holding any inventory, and the supplier takes care of the storage, packaging, shipping, and fulfillment for you. Finding a reliable supplier, in this case, is arguably even more crucial.

Dropshipping has its drawbacks. After all, your brand is what keep customers coming back to you. If you’re reliant on the packaging and fulfillment (whether on time or late), then you may miss out on long-term customer lifetime value (CLV for short).

Step 4: Manage overseas suppliers

Once you’ve made your decision, it doesn’t mean you can forget about your suppliers. Stay in touch with them and keep tabs on their performance, as this will have a direct impact on the success of your business. You’ll need to check in with the supplier regularly to see that their work is meeting the standards you agreed upon upfront.

Especially because sourcing abroad can be challenging, working closely with your supplier will keep everyone on the same page. Language and cultural barriers can make communication difficult, and differences in business practices and regulations can create confusion and delays. That’s why building strong relationships with suppliers is so important.

Fostering an open dialogue will make it easier to address any issues that arise and develop trust and mutual understanding. While you’ll want to make sure they deliver on their promises, you should also be open to feedback and advice from the supplier.

When it’s time to pay your foreign suppliers, you have a wide range of options to choose from. One option is to use a service like Wise Business- they offer instant payments in various currencies and can help you save money on pesky foreign exchange fees. Other options include wire transfers, PayPal, credit card payments, and more, which we’ll discuss in the next section.

If you want to make things official, you should draw up a contract with your foreign supplier, so there are no misunderstandings or surprises down the line. Contracts should clearly outline the terms of the partnership, including pricing, lead times, shipping methods, and any other relevant details. It's also a good idea to have contracts reviewed by a legal professional with experience in international business law – it’s better to be safe than sorry.

Small businesses might want to wait on formalizing a contract. After all, if you’re just getting started and want to start with a MOQ, then you might want to consider how the products sell once you have them before committing to a string of orders.

Step 5: Paying overseas suppliers and saving money

One of the most bothersome aspects of finding overseas suppliers is paying them. Sending money abroad can be expensive, with fees and unfavorable exchange rates adding up.

You may receive an invoice with a date that you need to pay hastily, and you also might need to pay across currencies, which will add on additional fees.

Luckily, there are some convenient options for global payments that can streamline the payment process. Let’s take a look at a few below.

Wise Business: Save While Making Overseas Payments

Wise Business is a great option for paying overseas suppliers and saving money. With Wise, you can send and receive payments in multiple currencies, making international payments quick and easy.

One of the best things about Wise is that they offer a transparent and low-cost pricing structure, so you'll always know exactly what you're paying and won't be hit with hidden fees or unfavorable exchange rates.

How does Wise Business help you save?

Using the mid-market rate, Wise Business can help you save money on international payouts compared to other payment methods. So, whether you're paying for a small order or a large shipment of goods (Wise offers high payment limits), using Wise Business can help you keep costs down and make sure your money gets to your overseas supplier quickly and securely.

• International: Hold a balance in 50+ currencies and make payments in 70+

• Batch Payments: Send up to 1000 invoices in one click (free with account)

• Wise Business API: Set up recurring and automated payments (free with account)

• Low fees: 19x cheaper on average than sending through PayPal

• Integrates with popular account software: QuickBooks, Xero, Wave, Sage

The best part: the Business API and Batch Payments come with no additional payment for US-based businesses.

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No monthly fees, no monthly balance requirements
No account opening fee for US-based businesses

Western Union

Western Union is a popular way to send money abroad, as they move money from the US to over 200 countries and territories. But while Western Union is known for its convenience and speed, it can be expensive, especially for larger transactions. You might also have to deal with unfavorable exchange rates.

The service does offer some advantages, though, such as the My WU program, which gives you points for each money transfer and lets you redeem them for discounts.⁴ You can also send money in person from more than 57,000 locations, which many money transfer services don’t offer.⁵

PayPal

PayPal is a well-known player in payment processing, especially internationally. They offer a variety of ways to send money internationally, such as PayPal transfers and international bank deposits. The biggest issue with the platform is its fees - there’s an additional 1.5% commercial transaction fee, a currency conversion spread of 4% for paying for goods and services in another currency, and other potential fees.⁶ ⁷

That being said, PayPal is widely accepted around the world, which means your supplier may already have a PayPal account. The platform also offers buyer protection, which can provide peace of mind if there are any issues with the transaction. So while PayPal may not be the cheapest option for paying overseas suppliers, it can still be a good choice in certain circumstances.

Xoom

Xoom is a digital money transfer service by PayPal you can use to send money to more than 160 countries, making it a versatile option for businesses with suppliers all over the world.⁸ Xoom specializes in international money transfers, offering faster transfer times and lower fees. You can also track your payment every step of the journey and have it delivered in a variety of ways.

Payment can be sent directly to a bank account, directly to a Visa card in some areas, for pickup at a partner location, or directly to your supplier’s door. For larger businesses that make big orders, the sending level limits could be an issue, as even the highest level has a 100,000 USD 180-day limit.⁹

Learn more:

How to find wholesale suppliers, distributors, and manufacturers

How to Find a Manufacturer in 11 Steps | Small Business Advice

3PL Warehousing Guide: What is it? Do you need It?

How to Find Overseas Suppliers in 5 Steps | Practical Advice

11 Tips for Supplier Payments: What you need to know

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Sources:

1. https://www.statista.com/statistics/1181996/supply-chain-management-market-size-worldwide/
2. https://www.trustpilot.com/review/wise.com
3. https://www.statista.com/statistics/744071/manufacturing-labor-costs-per-hour-china-vietnam-mexico/
4. https://www.westernunion.com/us/en/mywu/home.html
5. https://www.westernunion.com/us/en/home.html
6. https://www.paypal.com/us/webapps/mpp/paypal-fees
7. https://www.paypal.com/us/webapps/mpp/merchant-fees
8. https://www.xoom.com/about
9. https://help.xoom.com/s/article/what-is-required-to-send-higher-amounts-of-money?language=en_US