Local businesses face growing opportunities in 2020. Before the turn of the century, large corporations had a decisive advantage in many industries. Consumers and businesses wanted to work with big name brands, because they trusted the quality of their products and expected lower costs due to economies of scale.
A lot has changed in recent years. The Great Recession appears to have played an important factor. Many people became distrustful or even resentful of large businesses. A growing disdain for large businesses has created new opportunities for local businesses. Some companies like Frank Doolittle go out of their way to brand themselves as American based companies, because they know a growing number of Americans are supportive of the idea. They advertise the benefits of their union made products. A lot of other companies define their locality even more narrowly.
Businesses can benefit from working with local suppliers. In fact, the number of businesses that prefer locally sourced goods and services has risen substantially in recent years. A study by Thomas Net found that 72% of companies always or usually prefer locally sourced products. Less than 11% of companies generally or always prefer global suppliers.
What are the benefits and opportunities of using local suppliers? Here are some to consider.
Local suppliers have holistic, long-term goals that align with the interest of their partners
Large corporations often succumb to the whims of investors. Investors often insist on decisions that prioritize short-term profits over long-term goals. This is a risk that small businesses can’t afford to take, which makes using national or global suppliers a bad idea.
Helena Hudson, the managing director for the Real Eating Company, told The Telegraph that one of the biggest benefits of working with local companies is that they share the same visions and philosophies.
“I prefer working with local companies,” she stated. “They’re not beholden to the short-term interests of investors, or the stock market – and make longer-term decisions that are right for customers and staff. It’s an attractive proposition when recruiting and an enjoyable way to conduct business, too.”
More flexibility with contractual agreements
Every business is going to have contracts with different stakeholders in its supply chain. Contracts are essential for ensuring the stability of all parties and allowing them to operate efficiently.
However, some companies discover that certain aspects of their contracts are not ideal. They want to be able to work with partners that are reasonable about altering the contract as needed.
Large corporations tend to be very bureaucratic. They rarely make exceptions for businesses that they work with. Local suppliers tend to be a lot more open minded. They prioritize close relationships with other companies in their supply chain, so they will be willing to make necessary changes.
Build goodwill with your own customers
Customers across the country are becoming much more supportive of the idea of supporting local businesses. Go Local and a number of other organizations are pushing this trend.
You will have an easier time running customers if you show that you are truly committed to supporting the local economy. Being a local business by yourself isn’t enough. You also need to show that you work primarily with other local businesses.
Help the environment
Companies that work with local suppliers will also be more environmentally friendly. How does using locally sourced products benefit the environment?
The answer is that you don’t need to transport goods nearly as far. A lot of research has shown that transporting products long distances leaves a very large carbon footprint. You can reduce this significantly by working with local suppliers instead.Sustainable business expert Kayla Mathews points out that this is one of the most important features of a sustainable company.
Reducing logistical costs
Logistics are very expensive for businesses of all sizes. Recent data shows that businesses spend a stunning $1.64 trillion a year on simple supply chain management and logistics.
Companies are looking for more inventive ways to trim these costs. They have turned to highly complicated artificial intelligence tools to help plot travel paths to minimize transportation expenditures.
They could save a lot more money with a much simpler solution. They could simply switch to using local suppliers and they would be able to slash supply chain management costs dramatically.
Using locally sourced products is the way to go
Companies can save a considerable amount of money and increase revenue by using local suppliers. The benefits of using local partners are endless. Companies simply need to find the right partners and make sure that their strategies align.
Michael Zhou is a Senior VP of Business Intelligence Development and has assisted the Fortune 1000 company with expertise in the web as a whole, including ground-zero marketing efforts that benefit both consumer and vendor. He is also contributor on Esprittoday.