Manage overseas suppliers

The challenges of sourcing overseas

Trading with overseas businesses differs from trading within the UK. 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 overseas as in the UK, particularly when dealing with a country outside the European Union (EU). 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 UK requirements
  • who is liable if a product causes harm or loss - see our guide on product liability
  • whether your imported goods infringe any intellectual property rights
  • who bears insurance costs at each stage of transit - see our guide on insurance for international trade

A well-drafted written contract will help to avoid disagreements or disputes. See the page in this guide on drawing up contracts with overseas 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 overseas suppliers.
  • Shipping procedures are also more complex, given the increased distances and the need to cross borders. See our guide on international transport and distribution.
  • Understanding the business and social practices of your supplier's country can help build trust and develop relationships. However, remember that UK consumers may judge you on the business practices of your suppliers. See our guide on researching and entering overseas markets.
  • 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 the source of your supplier's raw materials. The best way to do this is to visit your suppliers - see our guide on rules of origin.

The EU Authorised Economic Operator certification scheme is aimed at reducing risks. For more information, see our guide on Authorised Economic Operators.