If you have customers with global sourcing operations, you’re likely facing requests based on their own global sourcing experience.

Here’s what usually happens: A buyer compares your offering to what is happening at other locations worldwide. Most frequently, the comparison boils down to price. This focus on price can create tension in your customer relationship. 

In countries where a distributor’s cost of doing business is a fraction of what it is in the United States, product comes to the global marketplace at prices that may appear to be extremely low. Pressure on North American distributors to match these prices can be intense.

But your local business can often trump the lowest-cost option. And thorough preparation can go a long way towards helping your company manage these pricing demands.

Identify to whom and what you are being compared. Know how to justify your pricing structure. Be prepared to explain the reasons your customer should embrace you as a preferred supplier.

How can offshore distributors bring products to market at prices that may undercut yours by 25 percent or more? Reasons vary regionally, but foremost are differences in compensation as well as legal, environmental and infrastructure costs.

Ask your customer if those low offshore prices cover expenses such as duties, tariffs, freight and insurance. Chances are these costs of doing business with offshore distributors are not included in your customer’s comparison. 

Provide reasons to purchase your higher-priced products. Look at benefits that can come only from businesses located close to the customer’s needs—businesses like yours.

Call this your “home-field advantage.” It can consist of supply chain benefits, in-person access to your customer’s business operations, locally available technical support provided by your own trained staff and quick-response customer service.

Consider the overseas supply chain. Buyers purchasing from offshore sources will have to carry sufficient inventory to cover immediate replacement needs—or else deal with the prospect of extended equipment downtime. Product shipments from Finland, for example, typically take eight or more weeks, and that’s assuming the product is in stock.

In comparison, your response time can likely be measured in hours, especially with backing from supplier partners who maintain North American stocking centers.

Your local presence virtually assures quicker delivery and eliminates the need for customers to maintain heavy inventory. It also facilitates in-person customer contact. Periodic visits to a customer’s plant can yield a host of distributor benefits.

In addition, you are positioned to swoop in with technical assistance on short notice, accompanied, if needed, by a technician from a supplier partner.

Evaluate your offering against that of an offshore distributor whose customer contact is a continent away and whose engineering and customer support is limited to phone, fax and e-mail.

These comparisons make strong points in your favor. So make sure you are including the total cost of ownership in comparison to global market pricing. Chances are good that the business advantages of your overall product offering will overshadow most low-cost offshore options.